What Happened

  • Mega-cap equities saw late buying tied to window-dressing activity.
  • A solid Treasury auction briefly lifted yields before they settled back.
  • Credit spreads stayed tight and volatility remained muted.
  • The dollar stabilized after recent softness.

What It Means

  • Window dressing can mask underlying rotation, so the signal is weak.
  • Rate moves are shallow because liquidity is still thin.
  • Tight credit spreads show risk appetite remains intact into year-end.

What I Think

  • I am cautious about chasing late-year equity strength driven by optics.
  • If yields drift higher in early January, high-duration trades will reprice fast.
  • Staying balanced feels right until the first real data hits.

Market Terms

  • Window dressing - Buying to make portfolios look better at reporting dates.
  • Auction tail - A bond auction clearing at a higher yield than expected.
  • Credit spread - The yield premium for credit risk over Treasuries.