Equity futures traded somewhat lower this morning after the December Santa Claus rally rolled on its merry way Tuesday. All the major indices once again finished the day higher, with the venerable Dow Jones industrials leading the course, closing up for the ninth straight day at 0,67% at 37,556.93. The big winner of the day was the small-cap Russell 2000, which stormed almost 2% higher to close at 2,020.95. After underperforming the other significant benchmarks in 2023, many feel small stocks could be ready to explode.

Bonds

Treasury yields were flat to lower as buyers returned to the government bonds after Monday saw some selling after a big December move higher. The ten-year note closed trading at 3.93%, while the 2-year short paper closed Tuesday at 4.44%. While the inversion has narrowed to 51 basis points after being well over 100 (or 1%) earlier this year, history still reminds bond traders that the difference often indicates a recession is possible.

Commodity prices

Brent and West Texas Intermediate crude rose again as more companies diverted shipping from the Red Sea. Houthi militants from Yemen have been carrying out the attacks, and so far, shippers have already diverted more than $30 billion in cargo from the region after 15 strikes have occurred.

Despite promises of protection by the U.S. Navy, 57 container vessels are going the long way around Africa to avoid being attacked. Brent closed trading at $79.53, up over 2%, while WTI finished Tuesday at $73.58, up 1.11%. Natural gas was the big winner, closing up 2.16% at $2.58 as some freezing weather has covered some big swaths of the U.S. this week.

Gold also continued to march higher as the February contract for the bullion closed up 0.64% at $2053.20. Ongoing dollar weakness and rising geopolitical concerns have kept a strong bid behind the commodity, which hit an all-time high in the first week of December. Bitcoin closed modestly lower, down 0.67% to $42,362.30.

Here are the top Wall Street upgrades and downgrades for Wednesday, December 20th, 2023.

Upgrades

Paramount Global (NASDAQ: PARA) raised from Underweight to Equal Weight at Wells Fargo; $15 price target raised to $18.

KeyCorp (NYSE: KEY) raised from Equal-Weight to Overweight at Stephens; no price target given.

Downgrades

Costco Wholesale Corp. (NASDAQ: COST) cut from Buy to Neutral at Northcoast; price target unchanged at $620.

DocuSign Inc. (NASDAQ: DOCU) cut from Equal Weight to Underweight at Wells Fargo; no price target given

Salesforce Inc. (NYSE: CRM) cut from Overweight to Equal Weight at Wells Fargo with a price target of $280.

Other

Alphabet Inc. (NASDAQ: GOOGL) resumed with an Outperform rating and a price target of $150 at Raymond James.

Amazon.com Inc. (NASDAQ: AMZN) resumed with a Strong Buy rating and a price target of $185 at Raymond James.

McDonald’s Corp. (NYSE: MCD) initiated at HSBC Securities with a Buy rating and a price target of $317.

Meta Platforms Inc. (NASDAQ: META) resumed with a Strong Buy rating at Raymond James, with a price target of $425.

Starbucks Corp. (NASDAQ: SBUX) initiated at HSBC Securities with a Hold rating and a $107 price target. (Here are five reasons to avoid Starbucks today.)

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