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Year-end positioning underway as markets close out strong 2025.

Oil

• Rebounded Monday
• WTI rose 0.91% to $57.67
• Brent climbed 1.04% to $61.27
• Both benchmarks posting modest gains after hitting multi-year lows
• Short-covering and technical buying supporting prices
• WTI ending year below $60 for first time since 2021
• Brent down 16% for the year, WTI down 18%
• Worst annual performance since 2020
• Oversupply narrative continues dominating sentiment
• OPEC+ production increases scheduled
• Chinese demand remains sluggish
• Geopolitical tensions providing limited support

Natural Gas

• Retreated sharply
• Fell 1.31% to $3.83/MMBtu
• Down from Thursday's $4.42
• Weather forecasts moderating
• Storage draws slowing despite strong LNG exports
• U.S. production holding near record at 107.74 bcf/day
• Quarter-end forecast at $4.38
• 12-month forecast at $5.43
• Winter volatility expected to continue

Equity Markets

• Closing year at records
• Global stocks on track to end 2025 at all-time highs
• MSCI World Equity Gauge up 21% year-to-date
• Fed rate cuts driving sentiment
• Technology and AI-focused stocks leading gains
• Santa Claus rally into year-end
• Low volume expected through New Year's
• S&P up approximately 23% for the year
• Nasdaq up 28%
• Energy weakest sector
• Small caps outperformed in fourth quarter

Real Estate

• Entering 2026 with momentum
• Cap rates stabilized after early 2025 peaks
• Industrial between 6.5-7.5% for single-tenant assets
• Multi-tenant around 6%
• E-commerce and nearshoring driving warehouse demand
• Multifamily vacancy declining
• Class A at 5% caps, Class B at 7%
• High homeownership costs supporting rental demand
• Office finding stability, flight to quality driving Class A demand
• Retail making strong comeback — grocery-anchored centers leading
• Data centers showing explosive growth from AI workloads

Credit Markets

• Ending year at record strength
• Private credit reached $3.5 trillion assets under management end of 2024, up 17% from 2023
• Market diversifying beyond direct lending into asset-backed finance
• Bank partnerships increasing
• Retail participation growing through evergreen funds
• Asset-based finance projected at $8 trillion in three years
• CLO spreads tightening
• Strong fundraising year with $209 billion in final closes
• Competition increasing from broadly syndicated loan market

Bottom Line

• Oil: Targeting sub-$50 breakevens, hedge floors above $75
• Gas: Selective exposure, winter contracts locked
• Industrial: Sub-6.5% caps near logistics hubs
• Senior secured credit: SOFR + 650, LTV under 65%

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