Markets cooled by a winter chill

This year, the Christmas rally came a month earlier, and Santa Claus has moved from the North Pole to Florida. During December, some of the “Trump trade” winners gave back part of the previous month gains. Economic fundamentals remain resilient but, a stickier than expected inflation print accompanied by a hawkish Federal Reserve stance triggered a market selloff close to the Christmas holidays. Although the American exceptionalism narrative is still in play, many investors were concerned by the impact of interest rates remaining higher for longer.