Weekly Newsletter 12/06/24

Good afternoon,

Wishing you and yours all the best this holiday season. As my ten-year-old son could tell you without much prompting we have 19 days until Christmas…it is somewhat hard to believe Thanksgiving was just last week.

Markets can have a seasonal feel as well with December considered to be a good month typically for stocks. Commonly referred to as a “Santa Claus rally.” Goldman Sachs pointed out that since 1928, the S&P 500 median monthly return for December is +2.04%. BofA also looked back to 1928 and noted that the S&P has traded higher 74% of the time…we shall see if the trend is our friend this year.

Payroll numbers increased 227K in November, ahead of expectations, while prior months saw a net upward revision of 56K. The excuse de jour being an end to a nasty hurricane season and the conclusion to several high profile and impactful labor strikes. Consumer sentiment also topped expectations, money flowed into U.S. equities for the ninth straight week and upbeat retail reports have many feeling the before mentioned “animal spirits.” We tend to get more cautious as the masses get more excited. I believe the expectations on lower inflation are way too optimistic. Selfishly I want markets to continue the upward trend of course, however, my pragmatic side (some say curmudgeon) knows we will encounter challenges and certain periods of negative returns to come.

Help Wanted. The Labor department household survey showed a ~355,000 decline during November in the number of employed people. This fits with the demographic issue we have discussed in the past about the number of baby boomers who reach age 65 each day in the U.S. (~12,000 per day). A trend which will continue for another decade…in the not-too-distant future you will probably be talking to (some yelling at) Robby the Robot at your local Home Depot.

Fed Chair Powell broke little new ground in today's NY Times moderated discussion. He said the U.S. economy is in a very good place, inflation has come down a great deal and unemployment remains low. Observed "we're not quite there on inflation" but economy is in good shape and there's no reason why that can't continue. However, also noted this means Fed can afford to be a little more cautious as it tries to make policy less restrictive over time. Also stressed Fed is not prepared to make policy incorporating tariffs given uncertainties about their size, timeline, and how they will transmit to prices. Following the report, odds of December 25 bp cut rose to nearly 90%, up from ~70% prior to the print.

The link below contains additional financial articles and information.
https://www.raymondjames.com/evangelista/resources

“It is dangerous to be right in matters where established men are wrong.”
Voltaire

Thank you,

Kyle

KYLE CHRISTIANSON, CFP®
Financial Advisor
Raymond James & Associates, Inc.
1421 Pine Ridge Rd, Ste 300
Naples, FL 34109
Toll Free (800) 843-2025 | Direct (239) 513-6525 | Main (239) 513-6500 | Fax (239) 596-5474
Kyle.Christianson@RaymondJames.com

Any opinions are those of Kyle Christianson and not necessarily those of RJA or Raymond James. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. There is no assurance any of the trends mentioned will continue or forecasts will occur. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy selected. This is not a recommendation to purchase or sell the stocks of the companies mentioned. Leading Economic Indicators are selected economic statistics that have proven valuable as a group in estimating the direction and magnitude of economic change. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. The Dow Jones Industrial Average (DJIA), commonly known as “The Dow” is an index representing 30 stocks of companies maintained and reviewed by the editors of the Wall Street Journal. The NASDAQ composite is an unmanaged index of securities traded on the NASDAQ system. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor's results will vary. Sector investments are companies engaged in business related to a specific sector. They are subject to fierce competition and their products and services may be subject to rapid obsolescence. There are additional risks associated with investing in an individual sector, including limited diversification. Investing in oil involves special risks, including the potential adverse effects of state and federal regulation and may not be suitable for all investors. Bond prices and yields are subject to change based upon market conditions and availability. Gold is subject to the special risks associated with investing in precious metals, including but not limited to: price may be subject to wide fluctuation; the market is relatively limited; the sources are concentrated in countries that have the potential for instability; and the market is unregulated.