GDP

• The U.S. economy expanded at a 4.3% annual rate in the third quarter, the largest increase in two years
• Consumer spending, the primary economic driver, grew at a 3.5% rate in the third quarter, with significant purchases of recreational goods and vehicles
• Inflation increased to a 2.8% annual rate in the third quarter, up from 2.1% in the prior period, partly due to higher U.S. tariffs

Durable Goods Orders

• New orders for durable goods fell 2.2% in October to $307.4B, reversing two consecutive monthly increases and driven primarily by a 6.5% drop in transportation equipment orders
• Excluding transportation, new orders rose 0.2%, suggesting underlying demand outside autos and aircraft remained modestly positive
• Shipments increased 0.6%, while unfilled orders rose 0.2%, indicating continued production momentum despite softer headline demand

Industrial Production

• Industrial production rose 0.2% in November after a 0.1% decline in October, leaving output 2.5% higher year over year
• Manufacturing output was flat in November and stood 1.9% above year-earlier levels, with declines in motor vehicles offset by gains in aerospace and computer and electronic products
• Capacity utilization for manufacturing held at 75.4%, remaining 2.8 percentage points below its long-run average, while mining utilization rose to 86.3%, above its historical norm

U.S. Tariff & Trade

• USTR concluded that China’s semiconductor industrial policies unfairly burden U.S. commerce under Section 301, clearing the way for additional tariffs on Chinese-origin semiconductors; the new duty will be set at 0% effective Dec. 23, 2025, before ramping up on June 23, 2027 to a rate to be announced at least 30 days in advance
• US Customs and Border has collected more than $1B in duties from over 246 million low-value e-commerce shipments since ending the de minimis exemption that began in May for China and Hong Kong and expanded globally in August

Jobless Claims

• Initial jobless claims, a measure of how many workers were laid off across the U.S., decreased to 214,000 in the week ended December 19, down 10,000 from the prior week.
• The four-week moving average was 216,750, down 750 from the prior week.
• Continuing claims - those filed by workers unemployed for longer than a week - increased at 1.923 million in the week ended December 12. This figure is reported with a one-week lag.

Fed’s Balance Sheet

• The Federal Reserve's assets totaled $6.557 trillion in the week ended December 26, flat $0.0 billion from the prior week.
• Treasury holdings totaled $4.195 trillion, flat $0.0 billion from the prior week.
• Holdings of mortgage-backed securities (MBS) were $2.05 trillion in the week, down $0.1 billion from the prior week.

Total Public Debt

• Total public debt outstanding was $38.35 trillion as of December 26, an increase of 6.1% from the previous year.
• Debt held by the public was $30.77 trillion, and intragovernmental holdings were $7.62 trillion.

GDP

• The latest annualized U.S GDP stands at $30.49 trillion as of June 30, 2025, an increase of 1.48% from the previous quarter , & an increase of 4.59% from the previous year
• The total public debt-to-GDP ratio is at 118.78% as of June 30, a decrease of -0.72% from the previous year

Inflation Factors

CPI:

• The consumer-price index rose 3.0% in September year over year.
• On a monthly basis, the CPI increased 0.3% in September on a seasonally adjusted basis, after increasing 0.4% in August.
• The index for all items less food and energy (core CPI) rose 0.2% in September, after rising 0.3% in August.
• Core CPI increased 3.0% for the 12 months ending September.

Food & Beverages:

• The food at home index increased 2.7% in September from the same month a year earlier, and increased 0.3% in September month over month.
• The food away from home index increased 3.7% in September from the same month a year earlier, and increased 0.1% in September month over month.

Commodities:

• The energy commodities index increased 3.8% in September after increasing 1.7% in August
• The energy commodities index fell (0.4%) over the last 12 months
• The energy services index fell (0.8%) in September after decreasing (0.3%) in August
• The energy services index rose 6.4% over the last 12 months
• The gasoline index fell (0.5%) over the last 12 months
• The fuel oil index rose 4.1% over the last 12 months.
• The index for electricity rose 5.1% over the last 12 months.
• The index for natural gas rose 11.7% over the last 12 months.

Supply Chain:

• Drewry’s composite World Container Index increased to $2181.93 per 40ft container for the week of December 19
• Drewry’s composite World Container Index has decreased by (42.6%) over the last 12 months.

Housing Market:

• The shelter index increased 0.2% in September after increasing 0.4% in August
• The rent index increased 0.2% in September after increasing 0.4% in August
• The index for lodging away from home decreased (1.4%) in September after increasing 0.3% in August.

Federal Funds Rate

• The effective Federal Funds Rate is at 3.64% , down (0.69%) year to date.

Middle East

• Saudi Arabia carried out airstrikes against a Yemeni militia backed by the United Arab Emirates after demanding the group withdraw from Hadramout, escalating tensions between the two Gulf powers amid rival proxy positions in Yemen and Sudan
• The strikes underscore growing strains between two key U.S. allies, complicating Washington’s regional strategy as Saudi Arabia and the U.A.E. back opposing factions across multiple conflicts
• Israeli leaders warned they could strike Iran again if Tehran rebuilds its ballistic-missile program, signaling a possible expansion of Israel’s red lines beyond Iran’s nuclear activities six months after their 12-day war
• Any renewed Israeli action would likely require at least tacit U.S. support and could complicate Washington’s efforts to stabilize the region, as the Trump administration presses Israel to prioritize broader diplomatic goals

Europe

• The EU is intensifying scrutiny of Turkey’s oil-storage terminals and weighing sanctions on entire ports, as Russian oil products continue to flow into Europe indirectly through Turkey despite EU bans
• Since the sanctions took effect, Turkey has imported about $50B of Russian refined fuels, while exports of oil products from Turkey to the EU have more than doubled, complicating enforcement and straining relations with a key NATO ally
• Ukrainian President Zelensky plans to meet Trump to close remaining gaps in a U.S.-backed 20-point draft peace deal, which Zelensky said is about 90% complete after weeks of negotiations
• Key unresolved issues include territorial control in Donetsk, the status of the Russian-occupied Zaporizhzhia nuclear plant, and U.S. security guarantees, with uncertainty over whether Russia will accept the proposed framework

China

• China sanctioned 20 U.S. defense companies and 10 executives, including Boeing’s defense unit, Northrop Grumman, and Anduril founder Palmer Luckey, in response to a $11.1 billion U.S. arms package approved for Taiwan
• Beijing framed the move as a defense of its sovereignty over Taiwan, imposing asset freezes, transaction bans, and travel restrictions on the targeted firms and executives
• The U.S. accused China of unfair semiconductor trade practices but delayed new chip tariffs until June 2027, keeping rates at zero for the next 18 months
• The delay signals an effort by the Trump administration to steady U.S.-China relations following a recent trade truce, despite ongoing concerns over China’s dominance in legacy chips

Nigeria

• The U.S. carried out missile strikes on Christmas Day against two alleged Islamic State camps in Nigeria, firing more than a dozen missiles from a Navy warship and killing multiple militants, according to U.S. officials

Venezuela

• The U.S. Coast Guard is pursuing the sanctioned oil tanker Bella 1 in the Atlantic, assembling elite boarding teams and military support after the vessel refused inspection and fled; U.S. officials say the ship is linked to Iranian and Venezuelan oil networks and is under a judicial seizure order

Canada

• British Columbia’s Supreme Court ruled that a group of indigenous tribes held the right to about 730 acres of privately held land. The ruling may open the doors for other indigenous groups to press their claims, causing uncertainty in the real estate market

Australia

• At least 11 people were killed when two gunmen opened fire during a Hanukkah event at Sydney’s Bondi Beach in what authorities called a terrorist attack targeting the Jewish community; one suspect was killed and another is in critical condition

UK

• The U.K. economy shrank for a second straight month in October, contracting 0.1% as weakness in the services sector, including retail, dragged on growth

Thailand

• Fighting continued along the Thai-Cambodian border, with both governments reporting new attacks despite President Trump’s claim that the two sides had agreed to a cease-fire

India 

• Russian President Vladimir Putin is visiting India to bolster ties by offering discounted Russian oil and military hardware, even as India faces U.S. tariffs over its Russian oil imports and seeks to maintain leverage with Washington while securing energy and defense needs

Oil Prices

• WTI: $56.74 per barrel
• +0.14% WoW; (20.89%) YTD; (19.06%) YoY
• Brent: $60.64 per barrel
• +0.28% WoW; (18.76%) YTD; (17.23%) YoY

US Production

• U.S. oil production amounted to 13.8 million bpd for the week ended December 19, down 0.0 million bpd from the prior week.

Rig Count

• The total number of oil rigs amounted to 545, up 3 from last week.

Inventories

Crude Oil

• Total U.S. crude oil inventories now amount to 424.4 million barrels, up 2.1% YoY.
• Refiners operated at a capacity utilization rate of 94.8% for the week, down from 94.8% in the prior week.
• U.S. crude oil imports now amount to 6.525 million barrels per day, down (5.8%) YoY.

Gasoline

• Retail average regular gasoline prices were $2.84 per gallon in the week of December 26, down (6.3%) YoY.
• Gasoline prices on the East Coast were $2.94, down (3.9%) YoY.
• Gasoline prices in the Midwest were $2.69, down (10.8%) YoY.
• Gasoline prices on the Gulf Coast were $2.54, down (7.4%) YoY.
• Gasoline prices in the Rocky Mountain region were $2.62, down (13.1%) YoY.
• Gasoline prices on the West Coast were $3.90, down (0.2%) YoY.
• Motor gasoline inventories were down by 0.0 million barrels from the prior week.
• Motor gasoline inventories totaled 225.6 million barrels, down (2.5%) YoY.
• Production of motor gasoline averaged 9.61 million bpd, up 7.2% YoY.
• Demand for motor gasoline was 9.078 million bpd, up 11.1% YoY.

Distillates

• Distillate inventories decreased by 0.0 million in the week of December 26.
• Total distillate inventories were 118.5 million barrels, down (3.6%) YoY.
• Distillate production averaged 5.203 million bpd, down (3.1%) YoY.
• Demand for distillates averaged 3.786 million bpd in the week, up 17.1% YoY.

Natural Gas

• Natural gas inventories decreased by 0 billion cubic feet last week.
• Total natural gas inventories now amount to 3,579 billion cubic feet, up 4.9% YoY.

High-yield:

High yield bond yields decreased 12bps to 6.70% and spreads decreased 16bps to 307bps. Leveraged loan yields increased 4bps to 7.88%, while spreads remained unchanged at 455bps. WTD high yield bond returns were positive 42bps. WTD leveraged loan returns were positive 12bps. 10yr treasury yields decreased 3bps to 4.13%. High yield and leveraged loans gained this week on stronger-than-expected 3Q GDP data and resilient consumer spending, supporting risk appetite.

Week ended 12/26/2025

Yields & Spreads¹

Pricing & Returns¹

Fund Flows²

New Issue²

Distressed Level (trading in excess of 1,000 bps)²

Total HY Defaults

Leveraged loans:

Week ended 12/26/2025

Yields & Spreads¹

Pricing & Returns¹

Fund Flows²

New Issue²

Distressed Level (loan price below $80)¹

Total Leveraged Loan Defaults

Default activity: 

• Most recent defaults include: New Fortress Energy ($3.5bn, 11/15/2025), Packers Sanitation Services ($1.2bn, 11/5/2025), Office Properties Trust ($1.7bn, 10/31/25), GPS Hospitality ($400mn, 10/30/25), Jordan Health Services ($1.0bn, 10/15/25), Astra Acquisition ($1bn, 9/30/25), First Brands ($4.4bn, 9/29/25), Spirit Airlines ($852mn, 8/29/25), ModivCare ($1.1bn, 8/20/25), Anastasia Beverly Hills ($606mn, 8/11/25), Claire’s Stores ($506mn, 8/6/25).

CLOs: 

Week ended 12/26/2025

New U.S. CLO Issuance²

New U.S. CLO YTD Issuance²

Note: High-yield and leveraged loan yields and spreads are swap-adjusted

¹ Source: Credit Suisse High Yield and Leveraged Loan Index

² Source: JP Morgan

Ratings activity: 

• S&P and Moody’s High Yield Ratings

Appendix: 

Diagram A: Leveraged Loan Trading Levels

Diagram B: High Yield and Leveraged Loan LTM Price  

Diagram C: Leveraged Loan and High Yield Returns 

Diagram J: New Issue - Leveraged Loan and High Yield

Diagram K: Leveraged Loan + HY Defaults by Sector – LTM 

Diagram L: CLO Economics 

Diagram M: Developed Country Govt. Bond Yields (%)

Diagram N: S&P 500 Historical Multiples

Diagram O: U.S. Middle-Market M&A Valuations (EV/EBITDA)

Diagram P: U.S. Large Cap M&A Valuations (EV/EBITDA)

Diagram Q: Dry Powder for All Private Equity Buyouts ($B)

Diagram R: Dry Powder for All US Debt ($B)

Diagram S: Structured Credit Spreads

Diagram T: Structured Credit Yield

Diagram U: SOFR Curve

Diagram V: CMBS Spreads 

ZCGC Real Estate

• Mortgage-rate shock is freezing demand, not supply
  
• 30-year mortgage rates remain structurally high relative to incomes, pricing out marginal buyers even as sellers slowly re-enter the market due to life events
• Sellers are no longer “locked in,” buyers still are
  
• Job changes, divorce, inheritance, and relocation are forcing listings, while buyers remain constrained by monthly payment math, not home prices alone
• Affordability is the binding constraint, not inventory
  
• Even with more listings, payment-to-income ratios are near cycle highs, keeping first-time buyers sidelined
• Psychology flipped faster for sellers than buyers
  
• Sellers see peak pricing behind them and are acting before further softening; buyers expect better deals ahead and are waiting
• Investor demand has meaningfully pulled back
  
• Higher cap rates, tighter credit, and better risk-free yields (T-bills, money markets) have reduced investor bid support for housing
• This is not a supply glut, it’s an affordability stalemate where sellers are first to react and buyers are still waiting for the math to work

Freight Rates

Drewry World Container Index

China-Global & Shanghai Export Container Freight Index