The Dow Jones Industrial Average, S&P 500 and US Total Market Index all closed at record highs Thursday before selling off Friday. However, that was the second biggest story of the week as the one that gained the most attention was the fact that the tech-heavy NASDAQ Composite did not participate in the rally as data within the earnings of both Oracle (ORCL) and Broadcom (AVGO) weighed. We’ve seen this type of action before as concerns over the durability of the AI trade have come to the fore. At this time, we think this theme has some legs, which given its weighting in the S&P 500 may result in the index churning around a bit. We also believe that although we wouldn’t write them off, calendar year 2026 will be one during which more than just three sectors (Information Technology, Communication Services & Consumer Discretionary) participate in this bull market.
· The Fed cut interest rates by 0.25% at the conclusion of their regularly scheduled two-day meeting this past Wednesday. This marked the third consecutive meeting that the committee agreed upon such a reduction. However, among the twelve voting members, three dissented with two voting to stand pat while one voted for a more aggressive 0.50% reduction. Within the statement that followed was, “in considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks.” President Trump, ever the diplomat, stated that the cut in rates should have been at least double the 0.25%. With Fed Chair Jerome Powell’s tenure ending in May 2026, President Trump will have the opportunity to appoint someone who he thinks will be more dovish.
· Australia has decided to enforce a nationwide social media ban for those under the age 16. The move is intended to protect the youth of Australia against cyber-bullying, online predators, pornography and the perceived mental health issues that is associated with the social media. We say hooray! And good luck.
It’s The Economy…”
· Initial Claims for Unemployment Benefits for the week ended December 6th rose 44,000 to 236,000 from 192,000, which was revised 1,000 higher. Meanwhile, the four-week moving average rose 2,000 to 216,750 from 214,250, which was unrevised. Continuing claims for the week-ended November 29th fell 99,000 to 1,838,000 from 1,939,000 the prior week. The continuing claims four-week average fell 27,000 to 1,918,000 from 1,945,000. (Source, U.S. Department of Labor)
· According to the Department of Labor, the Employment Cost Index, a “measure of quarterly changes in compensation costs, which include wages, salaries, and employer costs for employee benefits for civilian workers (non-farm private and state and local government)” rose by 0.8% during the third quarter, after rising 0.9% during Q2-2025. The ECI has risen by 3.5% y/y. The wages & salaries component (70% of ECI) rose by 0.8% during Q3 vs. 1.0% during Q2-2025 and as compared to 3.5% y/y. The cost of benefits rose by 0.8% during the previous quarter, after rising 0.7% during Q2-2025 and by 3.5% y/y. (Source, U.S. Bureau of Labor Statistics)
· The Bureau of Labor Statistics reported that the Job Openings and Labor Turnover Summary (JOLTS) on the last business day of October totaled 7.670 million (0.7% y/y), up 12,000 from 7.658 million one month prior. Job Openings have fallen from a high of 12.182 million in March 2022. This compares with total hires, which fell 218,000 to 5.149 million, leaving a gap of approximately 2.521 million between job openings and those available to work, down 230,000 from the prior month. The total number of Job Separations, which includes quits, layoffs, discharges and other separations fell 214,000 to 5.050 million in October from 5.264 million in September. Quits (Table 4) fell 187,000 to 2.941 million in October from 3.128 million in September. (Source, U.S. Bureau of Labor Statistics)
Economic Reports scheduled to be released this week, include the following – on Tuesday, November Nonfarm Payroll Report, November Unemployment Rate, September Business Inventories, October Industrial Production and Capacity Utilization; on Wednesday, November Retail Sales; on Thursday, Initial Claims for Unemployment Benefits, November Index of Leading Economic Indicators and November Retail Inflation as measured by the Consumer Price Index (CPI).
Several potentially market moving companies are scheduled to report earnings, to include Lennar (LEN), Micron Technology (MU), General Mills (GIS), CarMax (KMX), Darden Restaurants (DRI), Accenture (ACN), Nike (NKE), Cintas (CTAS), FedEx (FDX), Carnival (CCX), Paychex (PAYX), and Conagra (CAG).