Morning Brew December 12 2025

Good morning,

Yesterday, US markets saw significant shifts with the Dow Jones Industrial Average rising 1.4% to reach a record high. The S&P 500 increased by 0.3%, while the Nasdaq cut its losses to finish 0.3% lower. Following the Federal Reserve's 25 basis points rate cut, investors shifted focus from technology stocks to cyclicals and value stocks. Visa shares surged 6.2% following an upgrade, with Mastercard rising 4.6% and American Express up 2.5%. Banks performed well, although tech stocks lagged behind.

In after-market trading, Broadcom shares fell 5% despite forecasting higher revenue, due to concerns about lower margins from increased AI sales. Lululemon shares jumped 11.5% after hours, following an increase in its fiscal year outlook to $11 billion. Trading volumes bounced back, with 17 billion shares exchanged on U.S. markets, aligning with the 20-day average.

The Dow closed at a record level, and the S&P 500 is within immediate reach of a new high. Any breakthrough could ignite optimism, although there's some concern about the slowing pace of AI advancements.

Rubens analyzed Oracle's earnings: Oracle’s AI bill arrives: what the selloff really tells investors

• Strong growth: Oracle's quarter highlighted robust cloud and artificial intelligence (AI) growth.
• Challenges: Softer guidance and significant spending adversely affected share prices.
• Implications: A new AI phase is evident, where data centers require heavy capital before profits and free cash flow follow suit.
• Investor insights: Oracle serves as a case study in analyzing backlogs, capital expenditures, and customer concentration instead of merely chasing AI headlines.

Meanwhile, the Swiss National Bank maintained its policy rate at 0%, upheld a 0.25-point penalty on excess sight deposits, and remains poised to intervene in forex markets. Inflation dropped to 0.0% in November. Future projections indicate inflation rates of 0.2% in 2025, 0.3% in 2026, and 0.6% in 2027 if the rate remains unchanged. Despite robust global Q3 growth, Swiss GDP fell due to a decline in pharmaceutical exports. The SNB forecasts GDP growth below 1.5% in 2025 and around 1% in 2026, with a modest increase in unemployment.

In the U.S., the trade deficit narrowed to $52.8 billion, the lowest since June 2020, down from $59.3 billion in August. Export growth was led by nonmonetary gold and pharmaceuticals, increasing by 3% to $289.3 billion. Imports rose by 0.6% to $342.1 billion, with pharmaceuticals and nonmonetary gold driving the increase. The largest trade deficits were recorded with Ireland ($18.2 billion), Mexico, and the EU ($17.8 billion each), while the deficit with China declined to $11.4 billion.

Interest rates showed stability with 10-year yields, although the 3-month yield fell by approximately 10 basis points after the U.S. rate decision, pushing the USD Index down to 98.34. The EUR/USD rate stands at 1.1740, GBP/USD at 1.34, and USD/JPY at 155.70.

Precious metals had a stellar day, with silver reaching 64 and currently at 63.70. Gold increased to 4280, and platinum stands at 1700. Bitcoin remains stable at 92k.

John examined the general foreign exchange market movements: The FX Trader: Dovish Fed drives USD weakness, but how far?

• A dovish Fed stance has led to USD weakening. How far will this trend go?
• The FOMC confirmed a pause in the rate-cutting cycle, leading to lower U.S. Treasury yields and a USD sell-off. What's next?

The day's economic agenda is relatively light, with Fed speakers Paulson, Hammack, and Goolsbee expected to offer insights. EU CPIs and the UK GDP reports might not provide much excitement, but traders are likely to digest developments to chart their paths forward.

Traders are re-evaluating their precious metal positions, deciding whether to hold or sell. Strategies such as covered calls, partial closes, and trailing stops can be useful tools. If you have any questions, please feel free to reach out to us.

Upcoming Data Releases on Friday, December 12:

• Germany Inflation
• UK GDP
• France CPI