Closing Recap

U.S. equities finished the Christmas week strong, reaching a new all-time high but on a  resilient note. While Friday saw some “Grinchy” price action with the sell button hit around 10 am, the major indices managed to preserve their weekly gains. The S&P 500 closed virtually flat (+0.03%) but remains just 1% shy of the psychological 7,000 level. The narrative has shifted aggressively toward Commodities, with Silver staging a historic breakout and Oil collapsing under the weight of a new OPEC+ market share war. The “Mag 7” stocks are closing out their 3rd consecutive year of gains (+27% YTD), cementing their dominance, while Bitcoin remains the notable laggard, on track for its first red year since 2022. 

Key Takeaways

• Santa Rally Secures a Winning Year: Despite a quiet and slightly red session on Friday, U.S. markets secured a winning week. The S&P 500 is closing in on the 7,000 milestone, on track for its eighth straight month of gains—the longest streak since 2018. 
• Silver Supernova: In a historic move, Silver skyrocketed +10% on Friday to $79/oz, an all-time high. It is now a $4.4 Trillion asset, closing in on Nvidia’s market cap.
•  Gold Rush, Gold Posts Historic Returns: Gold settled at $4,552, marking its second-best annual performance since 1971. The metal is being fueled by a weak dollar and massive central bank accumulation, specifically from Russia and China.
• Oil Collapse: WTI Crude fell to $56.74 (-2.76%) as OPEC+ abandoned price support in favor of a 2014-style market share war. 
• Mag 7 Dynasty: The group is up +27% YTD, accounting for 45% of the S&P 500’s total return this year. 
• Euro Strength: EUR/USD is the best-performing major pair of 2025 (+13.74%), trading near 1.1778. 
• Bitcoin Ends 2025 in the Red: Decoupling from the “risk-on” rally, Bitcoin is on track to finish the year down roughly 6.4%, trading near $88,000. It has lost one-third of its value in the last three months, struggling with liquidity headwinds.
• 2026 Targets: Wall Street is bullish for next year, with a median S&P 500 target of 7,700 (Oppenheimer high of 8,100). 
• Santa Rally Stats: History is on the bulls’ side—markets have not seen three consecutive negative “Santa Rally” windows in 56 years.
• Week Ahead Focus – Closing the Books: A holiday-shortened week will focus on Year-End Window Dressing, FOMC Minutes (Tue), and Chinese PMIs (Wed). Note: The US Jobs Report is delayed until January 9.

Looking Ahead 

The “vibe” for next week is “Window Dressing & Resolution.” We are in the heart of the “Santa Claus Rally” window (last 5 trading days of the year + first 2 of Jan). With the S&P 500 up double digits this year, fund managers will likely pin the indices high to show clients they own the winners. However, 2026 is starting with a new macro regime: Deflation in Energy vs. Inflation in Metals. The divergence between collapsing Oil prices (peace hopes/OPEC supply) and parabolic Silver prices (monetary debasement fears) suggests a volatile start to the year. Goldman Sachs sees 13-15% returns next year. The consensus is for a “Soft Landing” turning into a “Productivity Boom,” though risks remain regarding the Fed’s pace of easing in a Trump presidency.

Weekly Market Narrative: The Bulls Run Out the Clock on a Historic Year 

The “Santa Claus Rally” has officially taken hold. Although the major indices drifted slightly lower in a low-volume Friday session, the S&P 500 managed to secure a weekly gain, sitting just 1% away from the psychological 7,000 level. Institutional “window dressing” is in full force as fund managers rush to show ownership of the year’s winners – primarily the Magnificent 7 and precious metals—before closing their books for 2025. 

Index	Last Closing Level	Daily Change	Daily Change %	Weekly Trend
DJ Industrials	48711	-20.19	-0.0004	Flat
S&P 500	6930	-2.1	-0.0003	Bullish
Nasdaq	23593	-20.21	-0.0009	Bullish
Russell 2000	2535	-12.97	-0.0051	Weak

Sentiment has shifted firmly back to “Greed” (56/100), supported by a statistical anomaly: the S&P 500 has never posted three consecutive negative returns during the Santa window in 56 years. With 2023 and 2024 being red during this period, 2025 is statistically primed to finish green. Looking ahead to 2026, Wall Street is bullish, with Citi raising its S&P target to 7,700, though history warns that “Year 2” of a presidential cycle is often the weakest.

Economic Data Calendar (Week of Dec 29)

The final days of 2025 will be characterized by thin liquidity and abbreviated trading hours. Traders should be wary of volatility spikes, but the primary focus will be on positioning for the new year.

MON (Dec 29): 

• BoJ Summary of Opinions: Insight into the recent decision to hike rates; key for Yen traders watching for further tightening signals. 

TUE (Dec 30): 

• FOMC Minutes (Dec Meeting): The Federal Reserve will release minutes from its December meeting. Investors will scrutinize the text for clues on the timing of the next rate cut and the depth of concern regarding inflation vs. labor market weakness. 
• US Consumer Confidence (Dec): A final read on the mood of the American consumer heading into 2026. 

WED (Dec 31): 

• New Year’s Eve: Bond Markets: Close early (2:00 PM ET). 
• Stock Markets: Normal trading hours (NYSE/Nasdaq). 
• China NBS PMIs (Dec): Critical data on Chinese manufacturing and services activity. A strong print could boost risk sentiment for the first trading day of 2026. 

THU (Jan 1): 

• New Year’s Day: ALL MARKETS CLOSED. 

FRI (Jan 2): 

• Japan Market Holiday: Liquidity in JPY pairs will be extremely thin. 
• Normal Trading Resumes: US and European markets reopen. 
• Typically a day of low liquidity but establishing the “January Effect” trend.
• Note: The US Non-Farm Payrolls (NFP) report will not be released this Friday. It is scheduled for January 9.

Asset Class Spotlight:Commodities, Currencies, Crypto & Treasuries

Commodities stole the show this week. Silver staged a legendary breakout, rising 10% in a single session to $79/oz. It is now a $4.4 trillion asset class. Gold followed suit, rising to $4,552 (+1.11%), driven by the “currency debasement trade.” Conversely, WTI Crude was battered, falling to $56.74 (-2.76%) as geopolitical risk premiums evaporated on news of potential Ukraine peace talks and OPEC’s abandonment of price support.

Asset	Last Level	Friday’s Change	Unit / % Change
WTI Crude	56.74	-1.61	USD/bbl (-2.76%)
Brent Crude	60.64	-1.6	USD/bbl (-2.57%)
Gold (Feb)	4552.7	49.9	USD/oz (+1.11%)
Silver	79.00+	0.1	Record High
EUR/USD	1.1778	Flat	Rate (+13.7% YTD)
USD/JPY	156.49	0.69	Rate (-0.49% YTD)
10-Year Note	0.04136	Unch	Yield (%)
Bitcoin	<90,000	Weak	Down -6.4% YTD

The currency market is closing 2025 with a dominant theme: Dollar Weakness. 

• EUR/USD: The pair is hovering near 1.1778, solidifying its status as the best-performing major currency pair of the year (+13.74% YTD). The Euro is benefiting from the Fed’s aggressive easing path compared to the ECB, with markets pricing in a widening rate gap in 2026. 
• GBP/USD: Sterling held the 1.3500 zone, capping a robust recovery year (+7.86% YTD), recovering from the post-Brexit doldrums. The pair has posted five consecutive weekly gains, shrugging off UK fiscal concerns as the dollar fades. Analysts eye 1.39 by March 2026 if the Dollar weakness persists.
• USD/JPY: The pair finished the week around 156.50. Despite the Bank of Japan’s rate hike to 0.75%, the Yen has struggled to gain traction due to thin liquidity and the persistent yield gap. However, analysts at Commerzbank predict the Yen could strengthen in 2026 as the Fed cuts and the BoJ hikes further.

Bitcoin remains the outlier. While stocks and gold surged, crypto ended the week in “repair mode” around $88,000. It is on track to close the year down 6.4% and down 30% from its all-time highs, marking its first negative year since 2022, as the asset class digests the massive Q4 liquidation shock.

What to Watch Next Week 

• The “Silver Squeeze” Sustainability: Silver at $79 is historic. It is now a $4.4 Trillion asset class. Next week, watch for a potential “blow-off top” or profit-taking as the year closes. However, if it holds these gains, it signals a massive shift in capital toward hard assets for 2026. 
• The “Green January” Indicator: Since 2008, the S&P 500 has alternated between three-year blocks of “Red” and “Green” Januarys. We have had three Green Januarys (2023, 2024, 2025). If the pattern holds, January 2026 could be Red. Watch the first few trading days of January closely for signs of institutional distribution. 
• The Oil/Equity Disconnect: Stocks are at record highs while Oil is crashing ($56). Historically, plunging oil is good for consumers (lower gas prices) but bad for S&P 500 earnings (Energy sector) and High Yield credit. If Oil breaks $55, watch for credit spreads to widen, which could finally drag the indices down.
• Geopolitical Wildcards in Thin Liquidity: With desks understaffed, headline risk is elevated. The US-Venezuela tensions (tanker blockade) and Ukraine-Russia peace talk rumors are binary drivers for oil prices. Any surprise developments could cause jagged moves in crude and gold.
• 2026 Rotation: Watch for early signs of sector rotation on Friday, Jan 2. Will the “Mag 7” dominance continue, or will investors rotate into beaten-down sectors like Energy or small caps to start the year?