Stocks Near Record High as Inflation Ticks Higher
Weekly Investment Update | By Brian Schreiner
U.S. stocks posted modest gains last week. Commodities were also higher while bonds, gold and bitcoin were lower. The S&P 500 closed the week within 1% of its record high.
Historically, December has been a good month for stocks. Traditionally, the last five trading days of the year plus the first two trading days of January are known as the "Santa Claus rally" period. Since 1980, this period has been positive 73% of the time, with an average S&P 500 gain of 1.1%.
Speaking of year-end, I’d love the opportunity to connect and ensure you feel confident about your portfolio positioning, review your progress and discuss our outlook for the year ahead. Contact me anytime or click here to schedule a call or virtual meeting.
BYD Assembly Line Robots
Payroll processor ADP said private employers shed 32,000 jobs in November, in contrast with the 47,000 positions added in October. Private payrolls posted their biggest drop since March of 2023. Small business payrolls declined by 120,000, which economists attributed to tariffs, which have increased costs.
The last piece of official inflation data to land before the Federal Reserve’s policymaking meeting next week was a shutdown-delayed report that showed inflation remained elevated in September and consumer spending slowed.
The Personal Consumption Expenditures price index (PCE) — the inflation gauge the Federal Reserve uses for its 2% target rate — rose 0.3% on a monthly basis, which lifted annual inflation from 2.7% to 2.8% in September, a rate last hit in April 2024, according to CNN and data released Friday by the Commerce Department.
The Federal Reserve will announce its final interest rate decision of 2025 on Wednesday as new concerns about the labor market headwinds, tariff effects and sticky inflation are taking their toll on consumers. The central bank will have to make its decision without some key government data. Hiring data for November and the latest inflation number have been delayed until mid-December due to the recent government shutdown.
The Fed’s dual mandate, which is to keep both inflation and unemployment low, have proved difficult to reconcile this year amid a slowdown in hiring, a spike in layoffs and inflation running well above the 2% target rate.
As of this afternoon, Polymarket has the odds of a 25 basis point rate cut at 94%. Another Fed rate cut comes with significant risk. Lowering borrowing costs can spur consumers and businesses to spend more and potentially lead to higher inflation.
“Investing in cryptocurrencies is risky. Not investing in cryptocurrencies is also risky.”
Changpeng “CZ” Zhao, Founder, Binance
Wall Street’s 2026 Outlook for Stocks (TKer)
40% of Russell 2000 companies have no earnings (Apollo)
Gold vs. Bitcoin Debate: Peter Schiff vs. Changpeng Zhao (Binance)
The $2 Billion Vodka Scam: How Grey Goose Fooled the World (The Philosophy Of Marketing)
Download our Quarterly Investment Outlook
Alpha Rock offers a compelling alternative to traditional buy-and-hold investing by offering active, risk-managed portfolio management services focused on liquid alternative investments and risk management.
To learn more about how we are investing for clients and for our current views on the global investment landscape, download our Quarterly Investment Outlook.
We’d love to hear from you!
Your thoughts are important to us, so don’t hesitate to share them. They give us great motivation and encouragement.
IMPORTANT DISCLOSURE INFORMATION
This commentary reflects the personal opinions, viewpoints and analyses of the Alpha Rock Investments, LLC employees providing such comments, and should not be regarded as a description of advisory services provided by Alpha Rock Investments, LLC or performance returns of any Alpha Rock Investments, LLC client. The views reflected in the commentary are subject to change at any time without notice. Nothing in this commentary constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Alpha Rock Investments, LLC manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.
The S&P 500 Index or the Standard & Poor's 500 Index is a market-capitalization-weighted index of the 500 largest U.S. publicly traded companies. The S&P 500 is a float-weighted index, meaning company market capitalizations are adjusted by the number of shares available for public trading. Note: Investors cannot invest directly in an index. These unmanaged indices do not reflect management fees and transaction costs that are associated with most investments.
Alpha Rock Investments, LLC provides links for your convenience to websites produced by other providers of industry related material. Accessing websites through links directs you away from our website. Alpha Rock Investments, LLC is not responsible for errors or omissions in the material on third party websites, and does not necessarily approve of or endorse the information provided. Users who gain access to third party websites may be subject to the copyright and other restrictions on use imposed by those providers and assume responsibility and risk from use of those websites.
