EMEA Morning Briefing : Futures Higher in Final Trading Days of 2025

MARKET WRAPS

Watch For:

No major economic or corporate trading updates expected

Opening Call:

European stock futures were higher after Asia stocks were mixed. The dollar and U.S. Treasurys were flat. Gold fell and oil rose.

Equities:

European futures edged higher as analysts across Wall Street expect another year of solid, if slightly less robust, returns in 2026.

According to forecasts from analysts collected by FactSet, the average bottom-up S&P 500 price target for year-end 2026 is just shy of 8,000, penciling in a yearly gain of 15.9%, excluding dividends.

Wall Street analysts often overestimate stock-market returns for the following year, according to FactSet's John Butters. But after three strong years of gains, some believe the bull market might be due for a breather.

"We're looking at three years of returns right around 20%, and that's way above average," said Jose Torres, senior market economist at Interactive Brokers. "We could be due for a flat year in 2026."

Forex:

The U.S. dollar was flat. Investors are expected to be less unnerved by a Fed chair who can make a reasonable economic case for much lower rates than one who just echoes Trump's arguments, even if the target is the same.

If a new Fed chair is "thoughtful in the way they communicate, that would not only help their chances of moving the consensus toward their view, but also create stability in not doing anything to damage the impact that the Fed may have on the economy," said Michael Lorizio, head of U.S. rates trading at Manulife Investment Management.

Bonds:

The yield on U.S. Treasurys were flat. A continued rise in Treasury yields could cause issues, noted Piper Sandler Chief Investment Strategist Michael Kantrowitz.

Since 2023, a rise above 4.25% in the 10-year Treasury yield has coincided with weaker equity returns and a doubling in realized equity volatility, he said.

If the labor market continues to slow, the Fed might still decide to cut interest rates, providing a boost to stocks, though too much weakening in the jobs market wouldn't be a welcome sign.

Energy:

Oil was higher as tensions between the U.S. and Venezuela escalate, according to Nanhua Futures analysts in a research note.

S&P data showed a drop in tanker traffic to Venezuela, the analysts said, adding that geopolitical risks could support oil prices in the near term, and investors will closely watch the trajectory of U.S.-Venezuela relations for the next catalyst.

Metals:

Gold fell while remaining above $4,500/oz. Prices are likely to continue being elevated by safe-haven demand as intensifying geopolitical tensions continue, and expectations of a more accommodative U.S. monetary policy, said Daniel Takieddine of Sky Links Capital Group.

The possibility of a more dovish Fed leadership after Jerome Powell's term ends could serve as a tailwind for gold, Takieddine added.

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Copper was higher, as prices have risen beyond what many expected, said Nanhua Futures analysts in a research note.

Market participants now anticipate greater price volatility in 1Q, after the metal's price surging to record highs on the back of supply risks and policy catalysts, they note.

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Iron ore prices were higher on expectations for stronger demand. Improved profitability at Chinese steel mills is driving hopes for a recovery in iron ore production, Hanhua Futures says in a research note.

Although iron ore stocks continue to build up at ports, inventories at steel mills are still at low levels, leaving room for further restocking, it adds. Nanhua expects iron ore prices to continue to be rangebound as its valuation recovers.

TODAY'S TOP HEADLINES

Home Sales, Fed Meeting Minutes, and Manufacturing Data to Usher in the New Year

Wall Street heads into the final trading days of 2025 sitting on double-digit annual gains for the major indexes.

U.S. stock and bond markets will wrap up the year on Wednesday, then close on Thursday in observance of New Year's Day.

In a Wild Year for Markets, Investors Who Did Nothing Did Just Fine

Markets were assailed by a trio of disruptive forces this year. Yet investors were rewarded for doing nothing.

If you owned U.S. stocks at the start of the year, you made good money. If you owned foreign stocks, even better. If you held Treasurys, you did well. And if you parked up in cash, the yield stayed high.

Trump's Broadside at Europe Also Swipes at a U.S. Legacy

BRUSSELS-President Trump and his team have spent much of the year railing at Europe, complaining about what they see as a cluster of countries too soft on immigration, weak on preserving democratic freedoms and unwilling to pay for the full cost of their defense.

Their biggest target, though, is the European Union. The U.S. helped create the institution from the wreckage of World War II, but Washington now regards it as an over-regulated bureaucracy incapable of responding swiftly to events and fulfilling its role as a U.S. ally

Europe Tried to Slam the Door on Russian Energy. It Didn't Account for Turkey.

Several times a month, tankers unload tens of thousands of barrels of oil products at a Turkish storage terminal in the port city of Mersin. The vast majority of the ships come directly from Russia.

And several times a month, tankers leave that facility carrying similar quantities bound for the European Union.

Companies Are Outlining Plans for 2026. Hiring Isn't One of Them.

The corporate playbook for next year? Don't hire.

Companies are looking to stay lean into 2026 while relying on technology to take on more tasks. Forecasters at jobs site Indeed expect relatively minimal hiring growth in 2026 and e-commerce platform Shopify and Chime Financial are already vowing to keep the size of their employee bases roughly flat. At a gathering of CEOs in Midtown Manhattan this month organized by the Yale School of Management, 66% of leaders surveyed said they planned to either fire workers or maintain the size of their existing teams next year. Only a third indicated they planned to hire.

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Expected Major Events for Monday

07:00/NOR: Nov Retail Sales

07:00/SWE: Nov Foreign trade

09:00/AUT: Dec Austria Manufacturing PMI

09:30/UK: Nov Capital issuance statistics

15:59/UKR: Nov Industrial Production

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This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

12-29-25 0015ET