Closing Recap

Tuesday, December 16, 2025

U.S. stocks slipped early following a flurry of economic data, adding to recent weakness after major averages hit all-time highs last week post the FOMC rate cut, but have been sliding since. The delayed November nonfarm payrolls data caused by the 43-day government shutdown showed a rebound in payrolls (topping consensus), although the unemployment rate ticked up to 4.6% from 4.4% (now 4-year highs). In addition, the October reading for retail sales was unchanged for the month, slightly below the estimate calling for a 0.1% rise. U.S. Treasury yields were lower for a second day as investors assessed the latest U.S. jobs data, while oil prices sagged on hopes for a Russia-Ukraine peace deal. While markets were lower most of the day, stocks perked up late to finish mixed as the Nasdaq 100 (QQQ) snapped its 3-day losing streak (avoiding its longest losing streak in 4 months), helped by Tesla as shares hit all-time highs (comes two days before the one-year anniversary of its prior all-time high on 12/18/24), though the S&P 500 (SPX) still posted its 3^rd straight day of declines ending near 6,800. Energy (XLE) was the weakest S&P 500 sector as WTI crude oil prices extend losses, falling below $55 per barrel for the first time since 2021 and healthcare also tumbled while Tech, Communications and Consumer Discretionary all finished higher. The dollar was lower, gold and silver erased early gains and Treasury yields slipped slightly.

• U.S. November Nonfarm payrolls +64,000 above consensus of roughly +50K while November private sector jobs +69,000 above est. 45K; U.S. November factory jobs -5,000 and government jobs -5,000.
• U.S. November average hourly earnings all private workers +0.1% from prior month. Average hourly earnings rose +0.4% in Oct and +0.1% in Nov, bringing the 12-month change to a cycle low of 3.5% in Nov from 3.7% in Sept.
• ADP reported that U.S. private employers added an average of 16,250 jobs per week over the four weeks ended November 29. The firm noted that continued strengthening in the second half of November points to a potential rebound in hiring momentum heading into year-end.
• Oct retail sales were unchanged below consensus +0.1% and vs Sept +0.1% (prev +0.2%); Oct gasoline sales -0.8% vs Sept +1.9% and Oct cars/parts sales -1.6% vs Sept -0.1%
• US Oct Retail Sales Ex-autos/gasoline +0.5% vs Sept unchanged (prev +0.1%); Oct Retail Sales Ex-autos/gas/building Materials/food services +0.8% (cons +0.4%) vs Sept -0.1% (prev -0.1%).
• U.S. S&P Global December flash composite PMI at 53.0 (vs 54.2 in November), U.S. S&P Global December flash services PMI at 52.9 (forecast 54.0) and S&P Global December flash manufacturing PMI at 51.8 (forecast 52.0).
• September Business Inventories +0.2% above consensus +0.1%.

• U.S. WTI crude oil futures tumbled, falling -$1.55 or 2.73% to settle at $55.27 per barrel after having falling below $55 per barrel earlier, their lowest level since February 2021 while Brent dumped below $60 per barrel as President Trump continues to call for gas prices to fall to below $2/gallon. Front Month Nymex Natural Gas fell 3.14% to settle at $3.8860 below, tumbling since hitting 3-year highs over a week ago of $5.2890 per million British thermal unit.
• The British pound neared 7 week highs against the US dollar (1.3435) before paring gains following strong UK PMI beats as December services PMI 52.1 vs 51.6 forecast; and manufacturing PMI 51.2 vs 50.4 estimate. The Dollar index (DXY) dropped -0.25% at 98.05 after hitting lows of 97.86 (taking out the October 17 lows). According to Reuters, the Bank of England is expected to cut 25bp on Dec 18, futures price 90% odds for cut: vote seen 5-4 to cut.

• In Food Retail/Distribution/Processing: VITL shares tumbled after the egg producer cut its annual net revenue forecast to $755M-$765M from at least $775M prior to reflect a temporary disruption in returning to regular order patterns following the company’s ERP system transition at the beginning of the fourth quarter/ issues long-term financial targets ahead of investor day. In research, BG was upgraded to Overweight at Morgan Stanley (tgt to $120 from $95) and downgraded ADM to Underweight (tgt from $57 to $50) saying BG $165/$60 bull/bear skew (+75%/-35% vs prior close) screens attractive vs ADM at $75/30 (+25%/-50% vs prior close) and for ADM, sees risk that the RVO has raised expectations into 2026 and overshadowed further downside in Carb Solutions due to weaker S&S margins.
• In Food & beverages: KHC said that Steve Cahillane, a veteran industry executive and former Kellanova CEO, will take over the top role at Kraft Heinz, on Jan. 1. Carlos Abrams-Rivera, Kraft Heinz’s CEO since the start of 2024, will step down and serve as an adviser to the company until March 6, the WSJ reported.

• In Utilities: ATO was downgraded to Equal Weight from Overweight, IDA upgraded to Overweight, SO downgraded to Underweight and SR upgraded to Overweight in Utilities and IPPs 2026 outlook at Morgan Stanley. The firm said they are bullish but careful as Utility performance will be heavily driven by data Centers and growth upside in 2026 with no slowing of activity or relief to Grid tightness. But investors will need to Dodge emerging political/regulatory risk from affordability concerns, especially in an active election year.
• In Solar: SEDG was upgraded to Equal Weight from Underweight and SHLS downgraded to Equal Weight from Overweight at Morgan Stanley in clean tech 2026 outlook saying with improved policy clarity the firm expects demand fundamentals to reemerge as the driving force for the sector in 2026. The firm is bullish on demand with data center growth spurring constructive outlooks on gas, solar, storage, and fuel cells and preferred names GEV, FSLR, and BE.

• In Banks: Fourteen of the largest U.S. retail banks posted jumps in the income they generated from overdraft and bounced-check fees during the first nine months of the year, while two big banks reported sharp declines, according to a Reuters analysis. Overdraft and NSF fee income for the group ticked up 2% overall to $2.99 billion. UBS was upgraded to buy at Bank America, and it adds it to its Europe 1 list of top ideas with 40% upside potential. TFC announces new $10B common stock repurchase program.

• In Crypto: Cathie Wood’s ARK funds loaded up on almost $50 million worth of shares in crypto-exposed companies, including crypto exchange COIN, Ethereum treasury company BMNR, stablecoin issuer CRCL, and CoinDesk owner BLSH, according to a trade notification Monday. It isn’t clear exactly when the trades were made- Barron’s.
• In Financial Services: in payroll, ADP was downgraded to Underperform at Jefferies and lower tgt to $230 as believe the Payroll market has become increasingly saturated with the number of $1B+ Payroll providers growing from 2 to 6 over the last decade. The firm thinks it will be difficult for ADP to grow beyond the currently 5-6% growth rate and see the 6-7% mid-term rev growth target as challenging.
• In Insurance: LMND was upgraded to Equal Weight from Underweight at Morgan Stanley as they see a clear path to adjusted EBITDA profitability by YE2026. The firm believes the company can continue executing on their path to profitability by capitalizing on cross-selling opportunities with their existing customer base for ~30% overall gross written premium growth for the next few years and improved expenses. ALL was downgraded to Equal Weight at Morgan Stanley saying given the increasingly competitive environment, believes the prior thesis of attractive valuation, improved growth, and better than consensus margins are now generally played out.
• In REITs: ESS downgraded to Hold from Buy at Jefferies in Residential Reit Outlook: Prefer SUI Top Idea given Superior manufactured housing (MH) Rent growth & favorable supply/affordability. Post-marina sale, SUI’s reinvestment in MH & elevated pace of stock buybacks are better ways to win in ’26. Downgrade ESS to Hold saying despite continued recovery in San Francisco, headwinds in La (still weak Entertainment industry, lagging port demand, elongated wildfire recovery) and headline risk in Seattle give US pause in Light of ESS’s higher multiple.

• ALDX shares jump after saying the FDA has extended the review of its drug reproxalap for treating symptoms of dry eye disease and will now give its decision on March 16, 2026, instead of its previous action date of December 16. The FDA has made no other requests and did not identify any other specific issues with the marketing application.
• GLUE announced positive interim data from an ongoing Phase 1/2 clinical study evaluating MRT-2359 in combination with enzalutamide in heavily pretreated patients with metastatic castration-resistant prostate cancer (mCRPC). MRT-2359 is an investigational, orally bioavailable, GSPT1-directed MGD discovered and developed by Monte Rosa.
• NKTR reported results from a mid-stage study of its drug rezpeg in alopecia areata; said rezpegaldesleukin, narrowly missed the main goal of achieving statistically significant reduction in severity in a mid-stage study; says both treatment arms met statistical significance on the main goal when excluding four patients with major study eligibility violations.
• ORGO said it plans to begin submitting ReNu, a product to treat knee osteoarthritis pain, to US regulators by the end of 2025.
• PFE shares fell as guides FY26 revs to $59B-$62.5B vs $61.6B est, FY26 EPS guide $2.80-$3.00 vs $3.05 est. and reaffirms FY25 EPS guide, sees FY25 rev guide $62B vs $61B-$64B – came at investor/analyst day.
• PVLA shares rose after saying it was granted FDA fast track designation for QTORIN 3.9% rapamycin anhydrous gel for the treatment of angiokeratomas.
• RPRX is paying up to $315M for low single digit royalties on NUVL’s ALK and ROS1 NSCLC drugs neladalkib and zidesamtinib, with analyst models calling for around $3.5B and $1.9B in sales by 2035 and a royalty tail running into the early 2040s.
• Several stocks announced stock offerings last night: IMNM announces proposed $400M public offering of common stock, KOD announces 6M share offering of common stock, KYTX announces proposed public offering of $100M of common stock.

• In Managed Care: HUM shares slipped after saying Insurance segment President George Renaudin will retire by Q3 2026 after a 29-year tenure; Aaron Martin, former VP of Healthcare at Amazon, to join in Jan 2026; company also reaffirms FY 2025 GAAP EPS guidance at about $12.26 and adjusted EPS at about $17.00. Also, Key tax credits that reduce the cost of Affordable Care Act health insurance coverage looked likely to expire by the end of the year. House Speaker Mike Johnson said his chamber will not vote on extending those Obamacare subsidies this week.
• In Medical Equipment: INSP shares dropped on Monday with markets unclear of weakness – today Oppenheimer noted a third-party INSP note garnered significant attention Monday with the insinuation that Medicare administrative contractors (MACs) are undergoing a multi-jurisdictional review on the coding discrepancy in HGNS current facility rates, and the new APC rates as outlined in CMS HOPPS final ruling.
• In Healthcare Tech: RDNT shares fell following a Hunterbrook Capital short report. Hunterbrook disclosed that it’s short RadNet (RDNT) in its report on Tuesday.

• In E&P and Specialty Infrastruture Services sector: Stifel provided a 2026 outlook for the space saying they expect data center trends to be the primary driver of stock returns across most of its Specialty E&C coverage in 2026. Stifel believes there is healthy line of sight to upward data center demand as the project pipeline is up >150% from a year ago and projects under construction are in the relatively early innings. Stifel continues to prefer its aggregate names (MLM, VMC and says best ideas for 2026 are FIX and MTZ
• In Multi industry: ITW was downgraded from Neutral to Sell at Goldman Sachs with $230 tgt as they believe the company’s organic/EPS growth will continue to underpace Large Cap Cyclical peers. Going forward, while they are sanguine on industrial activity inflecting, across large cap cyclicals, ITW has significant consumer leverage. The firm also upgraded ROK from Sell to Neutral and raise tgt to $448 from $329 as believes the company is in the early stages of structurally improving pricing across the organization, which could provide significant operating leverage going forward. Goldman double upgraded CGNX to Buy from Sell and PH remains their preferred name within short-cycle industrials.

• In Metals & Mining: VALE was upgraded to Overweight, SCCO downgraded to Underweight, and IVPAF Ivanhoe Mines downgrade to Equal Weight in metals and mining 2026 outlook at Morgan Stanley saying they see more value in Aluminum than copper, and with less crowded positioning, it prefers AA to most copper equities though it remains Overweight on FCX. The firm also likes Vale as it becomes a cleaner, still undervalued story with solid FCF.

• In Vertical Software: Keybanc upgraded TRMB to Overweight from Sector Weight on renewed confidence in ARR & EPS growth framework, downgraded GTLB to Sector Weight on incremental execution risk, and have highest conviction ideas TTAN, ADSK, APPF in Vertical Software 2026 outlook. The firm said looking back, 2025 will be remembered as the year of “AI (trying) to eat software,” as investor sentiment soured on software broadly. That said, the firm enters 2026 expecting a continuation of many similar Ai themes and a similar macro.
• In Internet Security: OKTA was upgraded to Buy from Hold at Jefferies (tgt to $125 from $90) saying the value dislocation (4x EV/CY27 revenue) has become too significant, coupled with several fundamental FY27 catalysts (improved execution, secular agentic); ZS was upgraded to Outperform from Neutral at Mizuho saying they are confident that ZS is well-positioned in Secure Access Service Edge and Zero Trust markets.
• In Quantum Computing: QBTS initiated Buy and $45 tgt at Jefferies, IONQ with Buy and $100 tgt and RGTI at Hold and $30 PT as initiate in Quantum Computing. Initiate QBTS Buy on ecosystem tailwinds, 2-pronged roadmap, full‑stack platform, and sticky enterprise workloads, IONQ on ecosystem tailwinds, trapped‑ion advantages, fault‑tolerant roadmap, expanding into networking & sensing, and strong gov/enterprise partnerships and RGTI Hold on a balance B/w industry tailwinds/chiplet scalability and execution headwinds/competitive pressure/ gov‑heavy revenue mix.
• In Software: NAVN reported a strong F3Q beat on higher GBV growth (+40% vs. Street’s +30% est.) reflecting 110% NRR on AI/Direct-Connections increasing user engagement with continuing enterprise momentum (Visa/Freightos/Axel-Springer). Management accelerated its positive FCF timing by one year on greater Opex/WC efficiency. NOW was upgraded to Neutral from Sell at Guggenheim as the stock has fallen below their price target
• IT Services & Consulting: ACN was upgraded to Overweight at Morgan Stanley and raised tgt to $320 from $271 noting shares have declined -21% YTD largely due to 1) market fears around potential Gen Ai disruption and 2) DOGE impact. The firm thinks these factors are now largely baked into the stock’s current valuation at 18x FY27 EPS; further, it thinks M&A and ecosystem partnerships are growth levers.
• In Data and Ai: Databricks said that it is raising more than $4B in its Series L investment round, valuing the company at $134B. This would mark an increase of 34% from the company’s last funding round over the summer. The company also said that it has crossed a $4.8B revenue run rate during its Q3, growing more than 55% year over year. This includes an over $1 billion revenue run-rate from its Data Warehousing business and more than $1 billion revenue run-rate from its AI products. There were reports earlier that Databricks is in discussions to raise about $5B at a $134B valuation.

• KLAC and MCHP were both upgraded to Overweight from Neutral at Cantor as they look for the SOX to outperform once again in CY26, led by excellent demand from Ai Compute and sustained supply constraints across DRAM, NAND, and HDDs, all of which are expected to support a capacity-driven upcycle and meaningful upside to Semi Cap estimates. Cantor’s Top Picks are NVDA and AVGO in Ai Compute, MU in DRAM, WDC and STX in Storage, ASML, AMAT, LRCX, KLAC, and MKSI in Semi Cap, and TER and FORM in back-end.