The Standard and Poors 500 index (SPX) closed today at 6930, down two points for a loss of 0.03%. SPX opened the week at 6865, gaining 0.9% for the week. Trading volume collapsed this week; everyone on Wall Street took a holiday.

VIX, the volatility index for the S&P 500 options, closed today at 13.6% after opening the week at 15.2%. Lower levels of VIX suggest more complacency on the part of the large institutional traders.

I monitor the movement of high beta stocks by tracking the ETF containing the top 100 S&P 500 stocks ranked by beta, SPHB. SPHB closed at 119.6 today, down less than a point or -0.2%. SPHB opened the week at 119.8, setting up a weekly decline of 0.2%. 

The NASDAQ Composite index closed today at 23,593, down 20 points or -0.09%. NASDAQ opened the week at 23,450, setting up a weekly gain of 0.6%. Similar to all of the broad market indices this holiday week, NASDAQ’s trading volume was extremely low. 

The overall market has bounced back strongly since the lows on 12/17, with the S&P 500, NASDAQ Composite and the high beta stocks of the S&P 500 (SPHB) gaining 3.1%, 4.0% and 3.8%, respectively.

Looking farther back, the market took large drops on 10/10, 11/20 and then 12/17. Each time, those would have been aggressive, but profitable times to buy the market. The large institutional players are nervous, and they sell first to preserve profits and then jump back in the market to avoid missing the next surge upward. FactSet, an eminent market data analysis service, predicts corporate earnings will grow 15% in 2026. Another positive sign was the recovery of the volatility index (VIX) for the S&P 500, declining to 13.6% today.
The latest measure of GDP growth surprised analysts at 4.3% for the third quarter. Corporate capital expenditures, both domestic and foreign, are hitting new highs. The tax bill passed earlier this year will begin to show its effects next year.

All of this adds up to a continuation of the bull market in 2026. Now we watch the three key metrics for next year’s market: the Santa Claus rally (the last five trading days in December plus the first two trading days in January), the first week of trading in January and the January barometer (the entire month's trading results).

This is a wonderful season of the year, starting with Thanksgiving, with gratitude leading to generosity at Christmas, building our hope for a happy and prosperous New Year. Thank you for spending 2025 with me.