From the desks of Stanley Katz & Lauren Madera
WELCOME TO THE DECEMBER SOLSTICE, THE SHORTEST DAY AND LONGEST NIGHT OF THE YEAR!
THE WEEKLY HIGHLIGHTS & COMMENTARY WILL BE ON VACATION THE NEXT COUPLE SUNDAYS. HAPPY HOLIDAYS AND A HAPPY, HEALTHY NEW YEAR! SEE YOU IN 2026!
This week’s muted results (i.e., DJIA: -0.67%, S&P 500: +0.11%, Nasdaq: +0.48%) arrive alongside a welcome inflation surprise that may be easing pressure on the Federal Reserve. Consumer prices rose just 2.7% in November year-over-year, marking the lowest reading since July and coming in below expectations after months of accelerating price growth. The data defies concerns about renewed inflation and suggests that the clearer trade landscape may finally be helping. After 2025’s whiplash, from April’s “Liberation Day” tariff shock to greater trade policy clarity, the market has become considerably less reactive to headline risk as actual tariff rates settled around 11% rather than the initially announced 18%. According to Schwab strategists, the decline in policy uncertainty that peaked in April has allowed both the economy and investors to regain footing, with corporate confidence potentially building as business leaders gain clearer sight lines into the regulatory and trade environment ahead. The challenge now is whether this gradual steadying can persist given labor market softness that continues to complicate Fed decisions in ways that go beyond simple rate cuts.
Capital Group’s 2026 outlook reinforces themes emerging from their analysis last week, which anticipated that easier monetary conditions and a more measured Fed pace could reward investors moving beyond concentrated mega-cap exposure. That broadening across geographies, industries, and market capitalizations appears to be taking shape, with international indices already meaningfully outpacing the Magnificent Seven year-to-date. Capital Group’s annual outlook points to earnings growth spreading across markets, with emerging markets expected to grow earnings 17.1%, Europe at 11.1%, and the U.S. just over 14%. The firm emphasizes that reduced policy uncertainty plus government stimulus efforts internationally may create a favorable backdrop for diversified investing. Alongside the broadening opportunity, however, Capital Group cautions that elevated global valuations and mounting government debt also bring legitimate risks that could test investor patience as 2026 unfolds.
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:
Nuveen:
Northern Trust:
James Investment Research:
Stanley Katz & Lauren Madera, Financial Advisors
ClientFirst Financial Strategies, Inc.
937-293-5500
Source for weekly stock market returns: Barron’s.
Source for inflation reading: “Inflation drops to lowest level in months, defying expectations of uptick,” abcNEWS, December 18, 2025.
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