I’ll admit that I played a little hooky over the holidays. Thanks for your patience with my missing Comments. But I’m back at work now and ready to spread some pithy wisdom. If I can find any.
A brief review of the past couple of weeks in markets: up. In fact, the Standard & Poor’s 500 finished 2024 up 16.65%, making it higher for three years in a row. The Dow Jones Industrials rose 13.38% during last year, while the Nasdaq Composite Index rose 20.54%. During the single trading session of 2026 so far (on Friday), stocks were mixed but still trading near record highs.
So, we’re all wondering what the new year will bring. I can confidently predict cold weather, then warm (unless you’re in the Southern hemisphere, in which case, warm then cold). What I can’t do is predict market movements, even though the long-term historical chart moves up and to the right. The short-term vicissitudes of stock prices, I believe, are unpredictable.
Data points in the past, however, are easy to read. The Consumer Price Index in November rose 2.7% annualized, while the CPI less food and energy rose 2.6% for the trailing twelve months. These inflation readings are still higher than the Federal Reserve would like (its target is 2%) but overall, not bad. The September CPI was 3%. There is no October reading because of the government shutdown. The belated October jobs report showed 105,000 jobs lost (largely from government layoffs), while November reflected a gain of 64,000 jobs. October unemployment came in at 4.5%, while November’s reading was 4.6%.
Speaking of which, the federal government faces a new shutdown at the end of this month (January 2026) when funding runs out again. Look for Congressional activity to forestall the shutdown.
And meanwhile, the GDP for the third quarter of the year (July through September) grew at a 4.3% annualized rate.
The elephant in the room? Venezuela. The government’s rationale for attacking Venezuela has morphed from drug smuggling (bad) to oil reserves (good). It seems clear that the U.S. government covets Venezuela’s oil, but it is much less clear that the oil can be made profitable, with oil prices currently at a five-year low. Chevron is the only American oil company with a current contract in Venezuela, and it is Venezuela’s largest foreign investor. Will other oil companies, given access to Venezuelan oil, believe that the U.S. can make the country safe and stable for large capital investments?
It is common for auto buyers to take a loan against a new car in order to afford it. It’s less common for auto owners to take out loans against a car they already own. Still, in Europe, JPMorgan is allowing rich clients to borrow against their collections of classic and luxury cars. Coming next: loans on watches, groceries, and trophy wives.
The U.S. fertility rate has hit a record low of about 1.6 births per woman – well below the replacement rate necessary to keep funding our safety nets like Medicare and social security. Immigration is one solution to the problem but is not currently popular with the Trump Administration. Ditto raising tax rates for the wealthy. Watch this space for other ideas.
For the week ending on January 2nd, the S&P 500 finished at 6,858, the Dow at 48,382, and the Nasdaq at 23,235. The yield on the ten-year Treasury Note closed at 4.187%. U.S. crude oil cost $57.33 per barrel, N.Y. gold cost $4,336.00 per ounce, and one Euro was worth $1.17.
Elizabeth E. Cook
Partner, Diastole Wealth Management
News and information presented here was gathered from sources believed, but not guaranteed, to be reliable, including (but not limited to) Morning Brew, Barron’s, The Wall Street Journal, Yahoo Finance, CNBC, Business Insider, Bloomberg, CNN, Reuters, Axios, The AP, Sevens, The Bureau of Labor Statistics, and The BBC. If you have questions, please call Diastole at 203.458.5220, or email me, Liz Cook, at ecook@dwinvest.com.
A massive bluefin tuna sold for a record 510 million yen ($3.2 million) at a fish auction in Tokyo. That’s almost $6,000 per pound. The winner of the bidding was Kiyomura Corp, which runs the popular Sushi Zanmai chain. Owner Kiyoshi Kimura said, “I haven’t sampled it yet, but it’s got to be delicious.” Yes, it’s GOT to be delicious or he’s in trouble!