Hope you are all doing well. All three major indexes finished up more than 3 percent for the week. The Nasdaq led the way, rising 4.9 percent. For the month, the S&P 500 and the Dow posted marginal gains. The Nasdaq, however, posted a 1.5% decline in November. It was a down month for the Nasdaq but it is still up over twenty percent this year. Markets have navigated several head winds like global trade uncertainty, two wars and the recent valuation concerns about AI stocks. Some of these concerns will likely linger into the coming year. However, things seem pretty good for stocks as the calendar turns to December and we head into the homestretch of 2025. The Miss Universe is back in the headlines with more controversy this week. I have broken down this week’s update using previous Miss Universe controversies.
Donald Trump criticized Miss Universe Alicia Machado (Miss Venezuela) after she won the pageant in 1996.
As it turns out it would not be the President’s last attack on Venezuela. For much of this year the shoe has been on the other foot for the President. Many economic experts have questioned and insulted his policies as having “no basis in economic reality”. The President and Nobel Prize-winning economist Paul Krugman even got into a public war of words over the tariff policy. Economists believe the administration’s economic agenda will cause an economic slowdown and rising inflation. So far these experts have been wrong. The economy is continuing to grow and that provides a runway for corporate earnings growth. U.S. large-cap companies are doing even better than the economy as a whole. The S&P 500 profits are on track to rise about 11% year-over-year. Profit margins are at near record highs. Earnings growth will remain the primary driver of stock prices next year. The pessimistic expectations of March and April have shifted. Largely because companies have been exceeding expectations all year. As of right now the consensus expectation for S&P 500 companies is 14% earnings growth in 2026.
Bob Barker resigned as host after 21 years over the pageant returning to the use of real fur in 1987.
To paraphrase Barker’s famous post game show phrase, the government shutdown helped control excess market volatility by having the release of economic data spayed or neutered. With the government back at work we are now once again getting real economic data and numbers. While it was a light week of economic data, we did get a report on durable goods. This month’s durable goods orders show that the manufacturing sector is showing signs of strength. It could be a sign of future economic optimism. A rise in durable goods orders suggests companies are investing in long-term assets like machinery and equipment, which is a positive sign for the economy and future production. This report should be taken with a grain of salt as it was driven by a significant increase in transportation, particularly military aircraft. Overall orders rose by 2.92% compared to last month which is amazing. However, the key “core capital goods” orders, which is a good indicator of business investment, increased by 0.9%. Still very good but the numbers look much better with the military purchases in it.
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