Wall Street enters what is expected to be a quiet week, including the last three trading days of 2025 and the first trading day of 2026. The market will be closed on Thursday for New Year’s Day. Although there are no big earnings scheduled for this week, there are three macroeconomic trends to keep an eye on. 1. Housing: November pending home sales data will be released Monday morning. The downturn in the real estate market is a major concern in 2025 and will continue to be so in 2026. Stubbornly high housing costs, which account for about a third of measured inflation, will continue to be a thorn in the side of consumers. Part of the affordability issue has to do with rising mortgage rates, but it’s not as simple as just lowering rates. First, when interest rates are low, list prices tend to be high. You should also be aware that it is becoming increasingly difficult to come up with a down payment based on a percentage of the list price. With inflation still above the central bank’s 2% target, shelter-in-place costs are high, hampering the Federal Reserve’s incentive to cut rates further. What we really want is new construction that increases the total number of homes in America. 2. Fed Minutes: The Federal Open Market Committee, the central bank’s policy-making committee, will release the minutes of its December meeting on Wednesday afternoon. We already know that the Fed cut interest rates for the third time this year earlier this month, but the minutes provide a clearer picture of what will happen next. The market sees a more than 50% chance of the first rate cut in 2026 at the March meeting, according to the CME FedWatch tool. Federal Reserve Chairman Jerome Powell’s term at the helm of the central bank ends in May. President Donald Trump has made no secret that he wants even lower interest rates, and he can’t wait to see his choices come to fruition. 3. Job market: The government’s weekly survey of initial unemployment claims will be conducted one day earlier on Wednesday morning instead of Thursday due to the New Year’s Day holiday. Employment is the driving force behind the consumption-based US economy, so any signs of resilience would be welcome. High inflation associated with a weak labor market has put the Fed in a difficult position as it tries to balance its dual mandate of stabilizing prices and reducing unemployment. A weak labor market dictates lower interest rates, while inflation remains above target, which dictates higher interest rates, or at least lower interest rate increases. In other words, the Fed needs to have the resilience to cover it in order to keep interest rates stable in early 2026. One Week Ahead Monday, December 29th 10am ET: Home Sales Pending (November) Tuesday, December 30th 9am ET: S&P/Case-Shiller Home Price Report (October) Wednesday, December 31st 8:30am ET: Initial Unemployment Claims 2pm ET: FOMC Minutes U.S. stock trading on January 1st closes for New Year’s Day Friday, January 2, 10am ET: U.S. Services Purchasing Managers Index (December) (See here for a complete list of Jim Cramer Charitable Trust stocks.) As a subscriber to Jim Cramer’s CNBC Investment Club, you will receive trade alerts before Jim makes a trade. After Jim sends a trade alert, he waits 45 minutes before buying or selling stocks in his charitable trust’s portfolio. If Jim talks about a stock on CNBC TV, he will issue a trade alert and then wait 72 hours before executing the trade. The above investment club information is subject to our Terms of Use and Privacy Policy, along with our disclaimer. No fiduciary duties or obligations exist or arise from your receipt of information provided in connection with the Investment Club. No specific results or benefits are guaranteed.
