From the desks of Stanley Katz & Lauren Madera
“PUT ON YOUR YARMULKE, HERE COMES CHANUKAH.
SO MUCH FUN-UKAH, TO CELEBRATE CHANUKAH!”
— ADAM SANDLER, THE CHANUKAH SONG.
The market sent mixed signals this week. While the Dow climbed, the S&P 500 slipped and the Nasdaq stumbled (i.e., DJIA: +1.05%, S&P 500: -0.63%, Nasdaq: -1.62%). The Federal Reserve reduced rates to a three-year low, bringing its short-term target to 3.5%-3.75%, even as an unusual 9-3 vote revealed internal debate about the pace of easing. Fed Chair Powell acknowledged the discourse, noting the Fed’s “two goals are a bit in tension”—a candid admission that captures the dynamic Schwab identifies as “instability.” The economy isn’t simply unclear; it’s structurally uneven. The Fed sees the labor market as the greater risk, yet inflation remains sticky and tariff-driven. Small businesses are struggling while mega-cap firms invest aggressively in AI. According to Schwab, this disparity may create sustained rotation and volatility throughout 2026 where gains and losses accumulate unevenly across the market rather than lifting all participants together.
Capital Group sees opportunity emerging from that fracture. With easier monetary conditions taking shape and the Fed signaling a more measured pace ahead—likely only one additional cut in 2026—the firm argues a more resilient economic backdrop could reward investors who move beyond concentrated mega-cap exposure. The broadening Capital Group anticipates across geographies, industries, and market capitalizations may have driven this week’s price action. The contrast between the two frameworks is worth noting. Schwab expects ongoing instability and heightened caution, while Capital Group suggests stabilization may create space for broader participation. Both interpretations could coexist in 2026, with the Fed’s divided vote and upcoming leadership transition adding further uncertainty to how monetary policy ultimately supports growth.
Below are links to a number of third-party research reports that we have read and analyzed over the past week. We hope you will find the information interesting, useful, and worthwhile.
Schwab:
Capital Group:
American Century:
Northern Trust:
Argus:
Stanley Katz & Lauren Madera, Financial Advisors
ClientFirst Financial Strategies, Inc.
937-293-5500
Source for weekly stock market returns: Barron’s.
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