The Christmas-shortened week produced gains across all major US indices, with the S&P 500 and Dow Jones hitting record highs. Mega-cap Tech assumed its leadership role with the semiconductor sector having relative strength. Nvidia announced a $20 billion deal with AI startup Gronk, while Micron Technologies shares continued to move higher on the back of their prior week’s blowout earnings report. Materials and mining stocks also had a solid week, as gold, copper, and silver prices went to all-time highs.

The S&P 500 gained 1.4%, the Dow and NASDAQ rose by 1.2%, and the Russell 2000 inched higher by 0.2%. The U.S. Treasury market ended the week little changed despite some better-than-anticipated economic data and a weak 2-year auction. The 2-year yield fell by one basis point to 3.48%, while the 10-year yield fell by one basis point to 4.14%. As I mentioned, the commodity complex was on fire, with several precious metals reaching all-time highs. Gold prices traded 3.7% higher to close the week at $4,551.30 per ounce. Silver prices increased by 17.6%, adding $11.89 to close at $79.27 per ounce. Copper prices surged 6.3% to close the week at $5.85 per Lb. Oil prices enjoyed a nice bounce early in the week after news that the US was pursuing a third Oil tanker off the coast of Venezuela. However, the move was largely erased on Friday, when WTI fell 3%. WTI closed the week up fifteen cents to $56.68 a barrel. Bitcoin’s price dropped $400 on the week to close at $87,800. The US Dollar index fell by 0.7% to 98.05.

A surprisingly strong first estimate of third-quarter GDP lowered expectations for rate cuts, as the economy appeared to accelerate. The estimate was 4.3%, compared with the consensus estimate of 3.3%, and the GDP Deflator was 3.8%, compared with the consensus estimate of 2.7%. Early in the week, Federal Reserve Governor Stephen Miran suggested that additional rate cuts were needed to prevent the economy from entering a recession. At the same time, Cleveland Fed President Beth Hammack indicated that the Fed could wait several months before another rate cut would be appropriate. Currently, markets have a 17.7% chance of a 25-basis-point cut in January priced in. Consumer Confidence in December declined to 89.1 from 92.9 in November, driven by labor market concerns. Initial claims fell by 10k to 214k for the week ending 12/20. Continuing claims for the week ending 12/13 increased by 38k to 1923K.