The US market is facing potential headwinds with rising yields and mixed signals from economic indicators. Despite a late rally, market breadth remained weak, and upcoming data, including ISM and housing figures, will provide insights into the strength of the labor market and overall economic activity. Meanwhile, bond yields have surged to their highest levels since November 2023, raising concerns about a potential impact on equities.
on Friday, January 3. Early in the week, we’ll get some housing data, while continuing jobless claims on January 2 will likely draw attention. Last week’s claims spiked to 1.91 million, though these figures are often revised downward. If claims unexpectedly increase, it could signal a potential slowdown in the labor market , but the broader data suggests continued strength.from the BLS won’t arrive until January 10, making this week’s ISM data—expected at 48.2, slightly down from 48.
4—one of the few key indicators for now.saw a notable late-day rally, gaining about 30-40 basis points in the final 15 minutes, driven by a $2 billion buy imbalance. Despite this, market breadth was weak: only 48 stocks advanced, while 452 declined, and three were unchanged.S&P 500 Futures and Financing Trends for March 2025. These contracts, which are used to measure equity financing costs, have fallen from a high of 179.5 to just 71 as of Friday’s close. Historically, such contracts trade within tighter ranges, suggesting that this year’s movement is more extreme. This could indicate end-of-year deleveraging or reduced demand for margin and leverage. If this trend persists, it may reflect broader market dynamics, such as tightening liquidity or adjustments in dealer balance sheets. We’ll have more clarity whenyield hit its highest level since November 2023, closing at 4.82%. Unlike late 2023, when yields were falling, they are now rising, potentially heading back above 5%. A steepening yield curve, especially in the 30-year minus—where longer-term yields rise faster than short-term ones—can weigh on equities. Historically, equities struggle during periods of steepening, especially when rates at the back end of the curve lead the way higher., suggest rates could rise by about 20 basis points over the next 18 months. Similarly, 12-month forward contracts imply a 50% chance of a rate hike within the next yea
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