All Quiet Outside of the Firmness in the Yuan and Copper
The MSCI All Country World ex. U.S. equity index enjoys its best outperformance since 2009.
Key Takeaways
A Worn-Out Santa Rally into the Year-End: Another overnight session that seems benign, but we thought so yesterday at this time as well, and the major averages still closed the session with a loss (on rising volume to boot, and with decliners beating advances by a 3-to-1 margin on the NYSE). Remember, the surprise is not if we get a Santa rally, but rather if we do not.
Ex. U.S. Stocks Outperform by a Wide Margin in 2025: I mentioned yesterday that most of the gains in the S&P 500 this year were illusory in the sense that, for a global investor, much of the advance was wiped out by the faltering greenback. But even with that, the near-30% increase in the MSCI All Country World ex. U.S. index outperformed the S&P 500 by a huge +13 percentage points, in what has been the widest margin since 2009.
Housing Upbeat, Manufacturing Downbeat: The homebuilders received some nice news to end the year, with pending home sales rising +3.3% (far above the consensus +0.9%). This level for the index is the highest since February 2023. But manufacturing activity headed in the opposite direction, sad to report, with the Dallas Fed manufacturing index moving deeper into contraction terrain in December — to -10.9 from -10.4 in November and sharply undercutting what was already a downbeat consensus estimate of -6.0.
