09 Dec 2025

U.S Market (10th Dec. 2025)

For global investors following U.S. equities, bonds, and FX

Global Macro — Stabilization Continues, but Strength Is Uneven

Global PMIs (Nov): Manufacturing holding around 50, Services in the 51–52 range → the global economy is maintaining a slow-expansion pace.
Inflation tone: Headline inflation across major economies continues to cool, but core inflation remains sticky, particularly in services.
Liquidity pulse: Global M2 growth has been positive for three consecutive months, providing structural support to risk assets heading into early 2026.
Commodities: Oil remains in the $78–82 range, easing energy inflation concerns but also reflecting modest global demand.

United States — Key Developments This Week

1) Labor Market: November Report Shows Controlled Cooling

The U.S. labor market continues to soften gradually:

Payroll growth has slowed but remains positive
Unemployment is trending toward the mid-4% range
Wage gains are moderating but still above pre-COVID norms

Interpretation:
This is the pattern consistent with a soft landing—cooling without recessionary damage.
Markets see this as supportive of early-2026 rate cuts, assuming inflation continues to ease.

2) Inflation & Fed Path — The ‘Last Mile’ Still Matters

Core inflation indicators remain around the 3% zone.
The Fed continues emphasizing “proceed carefully” and “data dependence.”
Current market pricing: 2–3 cuts in 2026, not a rapid easing cycle.

Narrative:
Disinflation is happening, but the pace remains too slow for aggressive policy easing.
Markets are aligning with a gradual normalization, not a pivot.

3) Bond Market & Yield Curve

Long-term yields remain in the 4.2–4.4% region.
The 2s/10s spread has moved into mildly positive territory after a long inversion.
This steepening signals lower recession probability and improved macro visibility.

Credit conditions remain benign:

IG spreads near historical averages
HY spreads stable and not pricing default stress

4) U.S. Equities — Broad Tone Remains Constructive

Equities continue to hold near cycle highs due to:

Softer yields
Improving liquidity trends
Stable earnings expectations
Lack of credit deterioration

Leadership remains concentrated in:
quality large caps, cash-flow-stable growth, defense, infrastructure, and select industrials.

5) Policy Watch — December Focus Points

Expected announcement of a tiered tariff framework affecting EV supply chains, solar components, and semiconductor inputs.
Fiscal expansion continues, raising medium-term questions about 2026 Treasury issuance and long-term yields.
Tightening immigration policy may constrain labor supply and keep wage inflation sticky.

6) FX & Cross-Market Sentiment

DXY remains in a softening trend, supporting EM currencies.
Risk appetite is constructive but selective, favoring large caps and liquid assets.
Crypto: Bitcoin dominance near 58% indicates targeted—not broad—risk-taking.

📈 Final Takeaway

The U.S. macro picture remains softening but resilient, consistent with a controlled slowdown rather than a contraction.
Declining yields, stable credit, and improving liquidity create a constructive setup into early 2026, but policy risk remains elevated.

Investment stance: Favor quality, cash-flow-strong U.S. equities, defense & infrastructure, and selective duration in bonds.

Disclaimer

This content is not investment advice. Investors are responsible for their own decisions.