I hope everyone had a wonderful Thanksgiving! In our house, the transition from turkey leftovers to holiday chaos happened in record time. My 10-year-old is already negotiating her “wish list” with the intensity of a hedge fund manager, while my 3-year-old is mostly just excited to help “decorate” (which mostly means putting ornaments on the bottom branch of the tree and then immediately taking them off).
For investors, December can feel a lot like that chaotic holiday prep. There’s a rush to get things done before the year ends, a lot of noise about what to buy (or sell), and the pressure to make sure everything is perfect before the calendar flips.
I start with our regular market update and then look at the “Year-End Checklist”, the financial equivalent of making sure you actually bought the gifts before you sit down to wrap them.
What happened in November:
- Indexes were mixed in November as markets digested recent earnings and economic data:
- S&P 500 was up 0.3%, 17.8% Year to Date
- Nasdaq Composite was down 1.5%, 21.7% Year to Date
- MSCI ACWI Ex USA was flat, 29.2% Year to Date
- Bloomberg US Aggregate Bond was up 0.6%, 7.5% Year to Date
(source: ycharts.com).
- The Fed: All eyes are now on the upcoming December Fed meeting. Markets are pricing in anticipation of an 89% chance of a cut as of the beginning of December. This is up from 67% a month ago. The probability dropped below 50% at one point during November. This rattled investors given the unpredictability around policy.
- Economic Resilience: Despite headlines about a slowdown, consumer spending over the Thanksgiving weekend broke records once again. It seems that, much like my kids with holiday cookies, the American consumer still has an appetite.
Earnings and the “Santa Claus Rally”:
- With Q3 earnings largely behind us, we saw the fourth consecutive quarter of double-digit earnings growth (as of now, the earnings growth rate is estimated at 13.4% according to FactSet.
- The Magnificent 7 did it again in Q3; they were expected to grow earnings by 14.7% year over year, instead they crushed expectations with growth of 18.4% (FactSet).
- Historically, December is famous for the “Santa Claus Rally”—a tendency for stocks to rise in the last five trading days of the year and the first two of the new year. While it’s a fun phenomenon to root for, we never build a strategy around hope (or Santa).
I know that was a lot to digest, so here is a quick rundown: The market had a volatile November, the economy is still chugging along, and while everyone is hoping for a year-end rally, we are staying focused on the fundamentals.
Which brings us to the main point: THE YEAR-END SCRAMBLE
The most common question I get this time of year isn’t “what stock should I buy?” but rather, “did I miss anything?”.
Just like you don’t want to realize you forgot a gift on December 24th, you don’t want to wake up on January 1st realizing you missed a tax deadline. The “AI Bubble” talk from last month remains, but right now, the priority is control. You can’t control the market’s December returns, but you can control your tax bill and your plan.
Here are a few “stocking stuffer” ideas to consider before the ball drops:
- Tax Loss Harvesting: If you have positions that are down (and even in a good year, something usually is), now is the time to realize those losses to offset any gains you’ve taken elsewhere. It’s the financial equivalent of re-gifting—turning something you don’t want into something useful.
- Required Minimum Distributions (RMDs): If you are of age, ensure your RMD is satisfied. The penalty for missing this is one of the steepest in the tax code (25%!).
- Review Your “Buckets”: If you are retired or approaching retirement, December is a great time to check your cash reserves. Do you have enough liquidity for 2026 spending? If the market does get spooky in the New Year, knowing your near-term bills are covered prevents panic.
If you have questions about your year-end checklist or want to make sure you haven’t “forgotten a gift” in your portfolio, give us a call! As we have said in past commentaries, WE LOVE THIS STUFF!
Happy Holidays and a Happy New Year to all!