Mid-Morning Look

Monday, December 15, 2025

U.S. stocks were trading higher overnight, looking to rebound from Friday’s declines (and weekly losses for the S&P and Nasdaq), but major averages quickly turned lower, led by last week’s decliners, namely the tech space, semis, and anything AI related including data centers, power stocks as stocks down the first 60 minutes at lows. Those names have been the leaders most of 2025, sending the S&P 500, Dow, Russell 2000 to record highs just last week, but after mixed commentary recently from AVGO and ORCL, markets have seen broad profit taking in those sectors. Oracle (ORCL) shares are hitting 6-month lows today. Crypto assets also remain weak, staying in downtrend with Bitcoin more than 30% off October all-time highs. All this comes despite a more dovish Fed last week where they cut rates as expected by 25bps for their 3dr straight cut. Meanwhile the Bank of Japan is expected to raise rates in coming days. Outside of weakness in tech, eight other S&P sectors are trading higher this morning in a further rotation. Treasury yields and the dollar ease to kick off the week while precious metal prices opened higher. Note the S&P 500 and Dow are on track for their 8^th consecutive monthly gain thus far. Rough start to the trading week early for major averages.

• U.S. December NAHB Housing market index 39 (consensus 39) versus 38 in November (previous 38), index of current single-family home sales 42 versus 41 in November (previous 41); index of home sales over next six months 52 versus 51 in November (previous 51), index of prospective buyers 26 versus 26 in November (previous 26).

• In Consumer Staples: Deutsche Bank downgraded shares of KDP, FRPT, BRBR to Hold from Buy in Consumer Staples 20206 outlook, upgraded MKC to Buy and maintain Buy ratings on KO, MNST, EL, PG, CHD and PEP noting the Consumer Staples sector faces a challenging setup over the year ahead. Such a backdrop naturally places traditionally defensive sectors like Staples out of favor, yet even more so given that historically consistent/stable fundamental trends across CPG have remained highly elusive over the past ~18 months of net downward revisions. Remains more cautious on names amid complex/large-scale M&A (E.G., KMB). HSY was upgraded to Overweight at Morgan Stanley as it believes the company is in the early stages of a positive fundamental inflection, with clear and underappreciated visibility into accelerating EPS growth above consensus.
• Goldman Sachs adjusted ratings in the semiconductor group as part of its 2026 outlook as they double upgraded TER to Buy from Sell, double downgrade TXN to Sell from Buy, downgraded ARM, ENTG to Neutral from Buy; initiate Buy on SITM Buy and $420 PT and CAMT Neutral. Goldman said they look for AI spending by hyperscalers in 2026 to continue to move higher, boosting Digital, Memory, Storage, and SPE stocks, alongside an industrial and automotive recovery benefiting Analog. AI infra will drive higher capex for Semiconductors and EDA, favoring a “barbell” approach with AVGO and NVDA as key beneficiaries. They see WFE growth to continue through 2027, with AMAT and LRCX looking strong. HDD, NAND, and HBM DRAM also show upside. In other research, KLAC was upgraded to Buy at Jefferies in semi outlook, says Ai remains favorite group with AVGO as top pick given highest level of estimate revisions expected in group and upside to $600 (it sees a path to $20+ in EPS in C27).
• Gaming and Lodging Outlook for 2026 at Goldman Sachs as they upgraded MAR, HLT and LVS to Buy, while downgrading WH, CHH, CZR to Neutral. The firm said lean into high-end Hotel franchises in 2026 as these brands continue to add rooms and we look for an acceleration in RevPAR growth (raise MAR, HLT and cut WH, CHH), while in gaming, they believe it is too early to call an inflection and still see downside to estimates. Upgrade LVS to Buy to capture its exposure to Macau where expect gross gaming revenue to exhibit sustained momentum and downgrade CZR to Neutral while its favorite gaming stock is WYNN.

• HSY +2%; was upgraded to Overweight at Morgan Stanley as it believes the company is in the early stages of a positive fundamental inflection, with clear and underappreciated visibility into accelerating EPS growth above consensus.
• IMNM +25%; after announces positive topline results from Phase 3 RINGSIDE trial of Varegacestat in patients with desmoid tumors; registrational trial met primary endpoint, with Varegacestat significantly improving progression-free survival vs. placebo (hazard ratio = 0.16, p<0.0001); trial also met all key secondary endpoints.
• KYTX +27%; after saying its patient-specific CAR-T therapy improved walking ability in patients with stiff person syndrome, an autoimmune disease. The results achieved the primary goal of the pivotal clinical trial and will support a marketing submission to the FDA next year.
• MIST +22%; after the FDA approved the first commercial product, Cardamyst, a nasal spray for adults with a heart condition, designed to rapidly resolve episodes of paroxysmal supraventricular tachycardia; the spray is expected to be available in retail pharmacies in Q1 2026.
• NEM +2%; along with precious metal miners HL, AEM, B as gold/silver prices rise.
• TER +2%; double upgraded to Buy from Sell at Goldman Sachs with a price target of $230, up from $148 as the firm adjusted ratings in the semiconductor group as part of its 2026 outlook.
• TSLA +3%; remains a standout near 52-week highs in overall weak stock market today.

• CLSK -11%; Data Center/AI sector/stocks extend last week declines with CRWV, NBIS, ETN, others as well as Bitcoin miners that last few months have pivoted toward Ai infrastructure and high-performance Computing (HPC) such as CIFR,  IREN, WULF, HUT and other are seeing further pullbacks after last week ORCL concerns on delayed data center build as well as guidance/results in space from OCRL/AVGO.
• IRBT -70%; shares tumbled after filing for Chapter 11 protection in Delaware bankruptcy court on Sunday after raising concerns about staying in business in March. According to the bankruptcy plan, co will be taken private by its primary manufacturer Picea, which will also cancel two loans IRBT owes.
• WLK -2%; following guidance at virtual investor conference call.
• ZG -12%; under pressure early on reports GOOGL is testing a new real estate advertising format, says post on website of real estate tech strategist Mike DelPrete. Real estate listings now appear in Mobile search results in US (limited markets – KS, NM and SC), linking to full details, tours & agents.