November 2025 Monthly Review

A Look Back

The well-known Christmas song staple was recorded and released in 1963 by Andy Williams as part of his first Christmas album, “The Andy Williams Christmas Album.” (maybe they were not trying to be so clever 60 years ago) As judged by radio airtime over the last 25 years, it consistently ranks in the top ten. The song celebrates the Christmas season and all the activities associated with it, primarily focusing on those with friends and family. Personally, it’s my favorite time too. People are just a little bit nicer, a little more patient…and maybe a little more hopeful and grateful. It coincides with the end of another calendar year and allows us all to take stock of where we are and what we have to be grateful for. From a market perspective, there has been plenty. After a tech-driven, six percent sell-off in the middle of the month, the Large-Cap S&P 500 rallied in the last days to show a small gain of .25% in November. That puts the index up nearly 18% for the year and bolsters an incredible three-year annualized return of 20.57%! Wonderful indeed! Developed International stocks continued their powerful performance with a monthly return of 1.22%, bringing the YTD number to 27.4%. Emerging international stocks show the best return of the year, at nearly 30%. Bonds also continue to reward with the Bloomberg Aggregate delivering .62% for the month. The more boring asset class is now up 7.46% over the first 11 months of 2025. On November 12th, President Trump signed a bill ending the longest government shutdown in U.S. history of 43 days. Since, economic indicators, which were silent during the shutdown, started to roll in. The picture remains clouded: the September inflation gauge remained elevated, but other data suggests inflation might be easing. Signs point to a weakening jobs market, with cuts occurring and younger workers most significantly affected. Some estimates for the most recent college graduates show a 10% unemployment rate. Consumer confidence has fallen to lows not seen since early 2024. Retail spending is interesting as well. Higher-income shoppers are still buying, while those on tighter budgets are pulling back a bit. This is seen in several stores like Macy’s, Costco, Walmart and others. With this backdrop, the financial markets continue to shine and stuff the stockings of investors.

A Look Ahead

As we move into this wonderful time of the year, we are mindful of the cycles of the economy and markets. The Fed has been trying to dance between the raindrops for a couple of years. It has slowly moved short-term interest rates down as the economy here in the U.S. has slowed. They were more hesitant than some would have liked, as they were paying attention to stubborn inflation. They are scheduled to meet and release their statement on December 10th, and the overwhelming expectation is for another .25% rate cut. This would bring that important rate down to the 3.50-3.75% range, very different from the 5.50% level seen in August of last year. The theoretical “neutral rate” the interest rate, at which monetary policy is neither accommodative nor restrictive, is estimated to be around 3% currently. There is certainly a balance there as well…getting rates low enough to spur borrowing and investment, yet high enough for savers to earn a reasonable interest return. Longer-term valuations remain stretched, but the “AI” trade may very well have legs as large companies race to gain an edge. We believe select companies and sectors stand to benefit as power and infrastructure needs dominate. For now, we remain cautiously optimistic, while weary of valuations…and most importantly…enjoying this wonderful time of the year!