The Christmas week brought an unexpected gift to investors: despite reduced volumes and the holidays that kept several financial centers closed, global markets closed mostly in positive territory. While Europe faced shortened trading sessions and early closings, Wall Street continued its march toward new all-time highs, and China posted a streak of gains not seen in months. Let's take a closer look at what happened.

?? Europe: Records Nearly Broken Between Holidays and Low Volumes

The European week featured a decidedly unusual trading schedule. Monday, December 22, was the last full session before the holidays, and investors took advantage of the opportunity to consolidate positions after the STOXX 600 hit an intraday high of 588.07 points in the previous session. The pan-European index closed the week with a modest gain of 0.20%, while the German DAX rose 0.21% and the French CAC 40 fell 0.59%, penalized by the weakness of some cyclical stocks.

The news that captured traders' attention came from the pharmaceutical sector: Denmark's Novo Nordisk received FDA approval for the pill version of Wegovy, the first oral GLP-1 weight loss drug. The stock jumped 9.2% in Tuesday's session alone, dragging the entire healthcare sector higher and injecting some pep into otherwise sluggish markets. For Novo Nordisk, this represents a "redemption" after a challenging 2025, marked by guidance cuts and the company overtaking Eli Lilly in US prescriptions.

On the macroeconomic front, the Bundesbank has revised its German GDP forecast upwards for 2025, bringing it to +0.2% from the previous stagnation, with an expected acceleration to +0.6% in 2026 and +1.3% in 2027. President Joachim Nagel indicated that the recovery will initially be limited but will then strengthen starting in the second quarter of 2026, driven by public spending and the revival of exports.

On Wednesday, December 24, European markets opened with reduced trading hours, closing at 12:30 PM in London and at 2:05 PM on Euronext. The STOXX 600 ended essentially unchanged, while most European stock exchanges were closed on Thursday and Friday for Christmas and Boxing Day. In this context, news from the United States and Asia still influenced expectations for the reopening on Monday, December 29.

?? USA: S&P 500 at All-Time Highs, Santa Rally Doesn't Disappoint

If I had to sum up the US week in one word, I'd choose "record." The S&P 500 closed Friday at 6,929.94 points, slightly below the intraday high of 6,945.77 reached in the same session, but still up 1.4% for the week. The Dow Jones Industrial Average reached 48,710.97 points, a 1% gain for the week, while the Nasdaq Composite closed at 23,593.10, up 1.3%. This is the fourth positive week in five for the US benchmark.

The macroeconomic data of the week came on Tuesday, December 23, when the Bureau of Economic Analysis finally released its initial estimate of third-quarter GDP, delayed by nearly two months due to the government shutdown. The US economy grew at an annualized rate of 4.3%, the best in the last two years, well above analysts' expectations of 3.2%. Growth was driven by household consumption (+3.5%), exports (+8.8%), and government spending, while fixed investment showed some signs of slowing.

The technology sector continued to dominate. Nvidia announced a $20 billion deal to acquire the technology and take over the leadership of Groq, a startup specializing in LPU chips for AI inference. While technically a "non-exclusive licensing agreement"—a structure likely designed to avoid antitrust complications—approximately 90% of Groq's employees will join Nvidia, including CEO Jonathan Ross, one of the creators of Google's TPUs. Bernstein analyst Stacy Rasgon commented that this structure "keeps the pretense of competition alive," but it remains the largest deal in Nvidia's 30-year history.

ServiceNow also made headlines by announcing its acquisition of cybersecurity startup Armis for $7.75 billion, a move that will triple its addressable market in the security sector. On the precious metals front, gold hit a new all-time intraday high of $4,579.60 an ounce, while silver reached $76.15—a rally fueled by geopolitical tensions and concerns about global sovereign debt.

?? China: Eight-Second Rate Increase, Beijing Loosens Real Estate Constraints

The real surprise of the week came from the Far East. The Shanghai Composite closed Friday at 3,964 points, marking its eighth consecutive session of gains—the longest streak since April—and gaining 1.9% for the week. The Shenzhen Component performed even better, gaining 3.5% for the week to reach a two-month high of 13,604 points.

The main catalyst came on Wednesday, December 24, when Beijing municipal authorities announced a further easing of restrictions on property purchases. Non-local residents—those without a Beijing hukou—can now purchase homes in the capital after paying income tax for at least one consecutive year, up from the previously required two years. Additionally, families with more than one child will be able to purchase an additional home in the city center. According to Liu Jing, professor of real estate finance at the Cheung Kong Graduate School of Business, these measures are a "precursor" to the national support policies expected in 2026 under the 15th Five-Year Plan.

On the monetary policy front, the People's Bank of China held its quarterly Monetary Policy Committee meeting, reiterating a "prudent but supportive" approach. As Goldman Sachs highlighted, the central bank used the term "cross-cyclical policies," suggesting its intention to look beyond short-term volatility and avoid excessive stimulus that could create structural imbalances. This meant no fiscal bazooka on the horizon, but gradual and measured support. Markets interpreted this message positively, seeing it as a signal that Beijing is ready to intervene if necessary, without fueling speculative bubbles.

Among the standout stocks, BYD gained 5.6% weekly, confirming its leadership in the Chinese EV sector, while Ping An Insurance and China Life Insurance benefited from positive sentiment regarding support measures. Interestingly, global interest in Chinese AI companies is growing, with investors searching for the "next DeepSeek" following concerns about the stretched valuations of American tech companies.

What to Expect in the Coming Week

Next week will be the last of 2025 and will see only three full trading sessions before January 1st. With the S&P 500 less than 1% from the psychological 7,000 threshold and the "Santa Claus Rally" technically underway, the likelihood of a year-end high remains high. In Europe, the reopening on Monday, December 29th, could see some adjustments following the movements seen on US markets during the holiday break.

For China, all eyes are on the conclusion of the session of the Standing Committee of the National People's Congress, which could announce further economic support measures. Analyst consensus sees 2026 as the year in which the stimulus measures introduced in 2024-2025 will finally begin to show their effects on economic data and corporate earnings.

As always, the week between Christmas and New Year's requires special attention: low volumes can amplify movements in either direction, and even a small amount of unexpected news can significantly shift prices. Happy New Year to all investors!