US Q3 GDP Released, Will US Stocks See a "Santa Claus Rally"?【The week ahead】

TradingKey - Last week, concerns about an Oracle data center project weighed on technology stocks, but rising expectations of interest rate cuts boosted the broader market. The S&P 500 index rose slightly by 0.1% for the week, the Nasdaq gained 0.5%, while the Dow Jones Industrial Average fell 0.7%. This week, global financial markets will shift into “Christmas mode.” Investors should focus on U.S. GDP data, and Bank of Japan Governor Kazuo Ueda will deliver a speech, potentially offering clues on the direction of interest rates in 2026.

Key Event Preview

Latest U.S. GDP Data May Offer More Clues on Interest Rate Trajectory

This week sees a heavy schedule of U.S. economic data releases, with the primary focus on the third-quarter real GDP, due on December 23rd. The market expects it to show an annualized quarterly growth rate of 2.5%.

The U.S. released eagerly anticipated employment data last week, which showed stronger-than-expected job growth in November, but the unemployment rate rose to 4.6%, its highest in over four years. Investors are keen to see if these figures provide a rationale for further Federal Reserve (Fed) rate cuts as the calendar turns to 2026. The Fed cut rates for the third consecutive time this month, but indicated that borrowing costs are unlikely to fall further in the short term.

What Signals Will Kazuo Ueda's Speech Bring?

The Bank of Japan will release the minutes from its October meeting this week. The BOJ had held steady shortly after new Prime Minister Sanae Takaichi took office, until last Friday's policy meeting, where it decided to raise interest rates by 25 basis points (1 quarter point) to 0.75%, the highest level in 30 years.

Bank of Japan Governor Kazuo Ueda is scheduled to speak this Thursday at the Japan Business Federation (Keidanren), potentially offering clues on the direction of interest rates in 2026.

This Week Enters Christmas Holiday Period

On December 24th, Christmas Eve, the New York Stock Exchange will close early at 02:00 Beijing time on the 25th. European stock exchanges in Germany, France, Italy, and others will be closed for the entire day or a half-day. Australia, Singapore, and New Zealand will observe partial trading days, while the Philippines will be closed.

On December 25th, Christmas Day, U.S. stock markets will be closed. Stock markets in South Korea, Germany, France, Italy, the United Kingdom, Australia, New Zealand, Singapore, India, Indonesia, Malaysia, the Philippines, Taiwan, and others will also be closed.

Selected Economic Data

Tuesday: U.S. Q3 Real GDP Annualized Quarter-on-Quarter (Preliminary)

Tuesday: U.S. October Durable Goods Orders Month-on-Month

Key Events This Week

Wednesday: Bank of Japan Releases October Monetary Policy Meeting Minutes.

Thursday: Bank of Japan Governor Kazuo Ueda Delivers Speech.

Holidays

Wednesday: Christmas Holiday

Thursday: Christmas Holiday