Market View: Week of Dec. 19, 2025

ECONOMIC REVIEW¹

The much-anticipated November employment report showed nonfarm payrolls rising by 64,000, modestly above consensus expectations following an unusually weak October report.

• Prior months were revised lower, with October showing a sharp decline that reflected shutdown-related disruptions rather than a sudden deterioration in labor demand.

• Unemployment (U-3) rose to 4.6%, while U-6, a broader measure of underemployment, edged lower.

  • Higher labor force participation contributed to the rise in U-3, while easing underemployment suggested job quality has not materially deteriorated.

• Average hourly earnings rose just 0.1% month-over-month, below expectations, reflecting softer labor demand and fewer hours worked, easing pressure on services inflation.

Retail sales were flat in October versus expectations for modest growth, missing consensus estimates.

• The report was released with a significant delay and reflected pre-holiday spending.

• Weakness in autos and gasoline offset strengths across most discretionary categories.

• Control-group retail sales, which feed directly to GDP, rose 0.8% versus expectations near 0.4%.

November’s Consumer Price Index (CPI) report showed headline inflation slowing to 2.7% year-over-year, well below expectations, and marking its slowest pace in several months.

• Shelter, transportation, and services inflation eased meaningfully, helping drive the downside surprise.

• Some concerns remain that shutdown-related assumptions, including a 0% owners' equivalent rent increase, made November’s CPI report appear cooler than actual underlying inflation.

Core CPI rose 2.6% year-over-year, below all major forecasts and the slowest pace since early 2021.

• Disinflation was broad-based across goods and services.

• Super Core CPI was in line with the headline at 2.7%.

How does the most recent economic data impact you?

Shutdown-related noise and prior month revisions have led investors to focus on the broader trend of cooling employment and wage moderation, reinforcing the view that the labor market is softening gradually rather than deteriorating abruptly.

Release delays and category distortions have shifted market attention toward underlying demand trends, with strong control group sales supporting confidence in steady growth without signaling overheating.

Data gaps and methodological assumptions have tempered enthusiasm around the CPI downside surprise, keeping the focus on direction rather than a single print.

Taken together, the noisy but cooling data strengthens the case for a patient data-dependent Fed, supporting expectations for gradual rate cuts rather than prompting an accelerated easing cycle.

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A LOOK FORWARD¹

In this holiday-shortened week, economic data will be light, with the final Q3 GDP reading being the key data release.

How does this week’s slate of economic data impact you?

With limited major releases and holiday-related distortions, this week’s data offer thin insight, keeping attention focused on broader trends.

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MARKET UPDATE²

Market Index Returns as of 12/19/2025	WTD	QTD	YTD	1 YR	3 YR	5 YR
S&P 500	0.13%	2.46%	17.66%	16.72%	23.13%	14.68%
NASDAQ	0.49%	3.00%	21.46%	19.87%	31.21%	13.65%
Dow Jones Industrial Average	-0.64%	4.18%	15.09%	14.30%	15.76%	11.93%
Russell Mid-Cap	-0.34%	0.96%	11.49%	10.41%	14.99%	8.91%
Russell 2000 (Small Cap)	-0.83%	4.08%	14.89%	14.34%	14.74%	6.55%
MSCI EAFE (International)	0.20%	3.67%	29.73%	31.28%	16.86%	8.85%
MSCI Emerging Markets	-1.52%	2.00%	30.09%	30.55%	15.64%	4.05%
Bloomberg Barclays US Agg Bond	0.34%	0.90%	7.09%	7.07%	4.27%	-0.33%
Bloomberg Barclays High Yield Corp.	0.22%	0.95%	8.24%	8.44%	9.65%	4.55%
Bloomberg Barclays Global Agg	0.00%	-0.23%	7.66%	7.40%	3.54%	-2.17%

OBSERVATIONS

• Major U.S. large-cap indices ended the week mixed with modest gains for the S&P 500 (+0.13%) and Nasdaq (+0.49%) offset by Dow weakness (-0.64%), as market breadth narrowed and mega-cap tech names led performance.

• Mid-cap (-0.34%) and small-cap (-0.83%) lost ground, reflecting renewed caution toward economically sensitive areas amid uneven macro data.

• International markets moved in opposite directions, with developed markets rising +0.20% while emerging markets fell -1.52%.

• Domestic fixed income indices were positive for the week; the U.S. Aggregate Bond Index rose +0.34% while high yield corporate bonds rose +0.22%.

  • International bond performance trailed behind for the week and finished unchanged.

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BY THE NUMBERS

Feel the Rhythm Feel the Rhyme, Feel the Gold
The defining moment from the North American Cup opener in Whistler, British Columbia, was Jamaica winning its first-ever international bobsled gold medal, a breakthrough nearly four decades in the making. Jamaica has been competing in international bobsledding since 1988, when the team debuted in Calgary, Alberta. That unlikely start was later immortalized in the 1993 film Cool Runnings³, which captured how audacious it was for a tropical nation with no ice, snow, or winter sports infrastructure to compete in a sport dominated by cold-weather countries. Nearly 37 years later, Jamaica topped the podium on a former Olympic track against competitors from 11 nations.⁴

Sleighing the Speed Limit
Santa would need to travel nearly 3 million miles per hour on Christmas Eve to deliver gifts to children around the world in a single night. With roughly 2 billion children globally and an estimated 900 million households to visit, the total journey adds up to about 100 million miles, farther than the distance from the Earth to the Sun. Even with the advantage of time zones stretching the night to roughly 34 hours, the sheer scale of the journey remains staggering. That challenge for Jolly Old Saint Nick grows further when factoring in payload, as gifts could weigh up to 5.3 million pounds if each child receives a modest present. In short, Santa’s annual commute makes the fastest jets and rockets look like they’re stuck in holiday traffic.⁵