Long term rates decline and credit spreads tighten amid an eventful start of the year

Flash note

Q3 productivity jumped 4.9% while unit labor costs fell, delivering strong growth without inflation and helping propel Q4 GDP expectations above 5%. Each week, the Syz investment team takes you through the last seven days in seven charts.

US equities advanced in the first full trading week of the year as investors largely looked past mounting geopolitical tensions, pushing most major indexes to all-time highs. Small-cap and value shares outpaced the large-cap growth stocks that have led returns in recent years, while an equal-weighted version of the S&P 500 Index outperformed its market cap-weighted counterpart. Of the major indexes, the Russell 2000 Index performed best, adding 4.62%, while the S&P 500 performed worst but still gained 1.57%. Stocks of aerospace & defense companies and homebuilders were volatile after several announcements by the Trump administration.

Flash note

Higher global yields and curve steepening weighed on bond returns while credit and EM spreads were stable last week.

Gold shines as 2025’s top performer, Bitcoin falters, US stocks lag global peers — and while silver steals the spotlight, copper quietly makes its case. Each week, the Syz investment team takes you through the last seven days in seven charts.

Global equity markets were dominated by year-end positioning, amid lower holiday liquidity and mounting geopolitical tensions.

U.S. stocks declined during the holiday-shortened week. The Nasdaq Composite performed worst for the week, followed by the Russell 2000 and S&P 500 indexes. The Dow Jones Industrial Average and S&P MidCap 400 Index held up best but still shed 0.67% and 0.71%, respectively. Within the S&P 500 Index, the energy sector outperformed as heightened geopolitical tensions drove oil prices higher. On the US macro side, lower mortgage rates and wage growth fuel homebuyer momentum, as pending home sales Index rose 3.3% in November, marking the largest month-over-month jump since February 2023.

Rangebound interest rates and credit spreads will require bond investors to focus on the yield carry and to be selective in sectors and companies’ exposure