Latest / HPK Provident Advisors: The Weekly Bull / Year-End Markets At A Glance

Transcript

Year-End Markets At A Glance · HPK Provident Advisors: The Weekly Bull

• 0:08
  SPEAKER_00: Welcome to Friday Live.
• 0:09
  SPEAKER_00: Every Friday, or usually on Friday, today is obviously Wednesday.
• 0:13
  SPEAKER_00: Some of the partners of HBK Provident get together and discuss what we're seeing going on in the markets, the economy, and tying in some financial planning topics.
• 0:21
  SPEAKER_00: So you just got me again today.
• 0:24
  SPEAKER_00: But I wanted to get the video out so you guys have something to look at over the potentially long weekend.
• 0:30
  SPEAKER_00: So today is the last trading day of the year and another remarkable year for the SP 500.
• 0:37
  SPEAKER_00: The major market cap weight at SP was up about 18%.
• 0:41
  SPEAKER_00: This year it was a lot broader than we saw last year.
• 0:44
  SPEAKER_00: So equal weight is lagging, the equal eight SP 500, but it's still double digits for the year.
• 0:50
  SPEAKER_00: It's just closer to 10, maybe 10.5%.
• 0:54
  SPEAKER_00: International did very well.
• 0:56
  SPEAKER_00: Actually outperformed the SP 500, both international developed and emerging markets.
• 1:01
  SPEAKER_00: So we haven't seen that in a while.
• 1:04
  SPEAKER_00: Small caps did all right.
• 1:09
  SPEAKER_00: Well, taxable fixed income did well.
• 1:11
  SPEAKER_00: Tax-free, not as much.
• 1:12
  SPEAKER_00: The Muni space was a little a little tough this year, especially the high-yield Muni space.
• 1:17
  SPEAKER_00: So we still have a couple days left of the Santa Claus rally.
• 1:32
  SPEAKER_00: So we got some ground to make up, but I think investors have really um grown to this seasonal trend.
• 1:39
  SPEAKER_00: So maybe we experienced it a little earlier in December.
• 1:43
  SPEAKER_00: If we do uh finish negative for that period, it's gonna mark the third straight year.
• 1:48
  SPEAKER_00: And obviously last year was a great year.
• 1:50
  SPEAKER_00: Um 24-25, great year.
• 1:54
  SPEAKER_00: So it takes it with a grain of salt.
• 1:56
  SPEAKER_00: Um, January, it tends to be a little choppy in the beginning.
• 2:00
  SPEAKER_00: Um taxable accounts who were pushing off gains at the end of 2025 may realize some of those gains in winter.
• 2:09
  SPEAKER_00: So you tend to see a little more volatility.
• 2:11
  SPEAKER_00: As a full year perspective, um, okay, well, first let's let's do a little recap of the economic data for the year.
• 2:18
  SPEAKER_00: Um, we saw a steady uptick in the unemployment rate.
• 2:22
  SPEAKER_00: We went from about 4% to 4.6%.
• 2:26
  SPEAKER_00: Uh payrolls have really decelerated.
• 2:28
  SPEAKER_00: We're now in the potentially zero to 50,000 um new jobs range.
• 2:35
  SPEAKER_00: In the beginning of the year, we were closer to 200,000.
• 2:37
  SPEAKER_00: So definitely a deceleration there.
• 2:40
  SPEAKER_00: Inflation, um, I'm gonna say it's approximately the same level.
• 2:45
  SPEAKER_00: Now you may say, well, didn't we get a good 2.7% reading year over year uh for November?
• 2:53
  SPEAKER_00: Yes, we did, but I'm taking that as a grain of salt with the government shutdown.
• 2:57
  SPEAKER_00: So essentially through September, we went from about 3% to 3% inflation.
• 3:03
  SPEAKER_00: So way above the Fed's target.
• 3:05
  SPEAKER_00: Um, we did see a dip in the middle of the year.
• 3:08
  SPEAKER_00: We had a couple of months that we got low, but then it was a steady, steady increase higher.
• 3:13
  SPEAKER_00: So big picture um going into next year.
• 3:16
  SPEAKER_00: I expect the labor market to continue to weaken.
• 3:19
  SPEAKER_00: Um, I don't see a reason why unemployment rate would suddenly turn, like the Fed is indicating.
• 3:25
  SPEAKER_00: Um, non-farm payrolls likely to be closer to the flat line.
• 3:29
  SPEAKER_00: Um, earnings are expected to be good.
• 3:31
  SPEAKER_00: Um, they're expected to come in at 14.8 percent on the SP 500.
• 3:36
  SPEAKER_00: So if that did transpire, um that would be a very strong year, but uh we're trading at 22 and a half times forward earnings, so elevated valuations, elevated expectations on earnings.
• 3:48
  SPEAKER_00: It sets up for a pretty challenging year.
• 3:51
  SPEAKER_00: Um, typically the second year of the presidential cycle is the weakest historically.
• 3:56
  SPEAKER_00: So we're expecting more volatility.
• 3:59
  SPEAKER_00: Um I have the chart pulled up of the SP 500 for this year.
• 4:03
  SPEAKER_00: As you can see, um, it was pretty steady higher.
• 4:06
  SPEAKER_00: We had that deep sea scare um in February or end of February and March, uh, which was a near bear market drawdown.
• 4:16
  SPEAKER_00: And then since then it's really been steadily higher.
• 4:19
  SPEAKER_00: Um, we had a minor pullback in the fall, but um, like I said, it was minor.
• 4:24
  SPEAKER_00: So looking ahead at next year, I think um I think it's gonna be a tough one.
• 4:30
  SPEAKER_00: Um, I'm not necessarily saying it's gonna be a negative year, but I think it's gonna be a little more challenging with those high expectations.
• 4:37
  SPEAKER_00: Um, so we also, besides talking about markets, um, oh, and and to mention, next week we'll get a lot of data.
• 4:45
  SPEAKER_00: So hopefully we start to get more reflective of what's actually going on in the economy as as a government's been open now for some time.
• 4:53
  SPEAKER_00: Um, we'll get the job openings, um, ISM services, non-farm payrolls on Friday.
• 5:00
  SPEAKER_00: So, all things to really pay attention to and see what the actual health of the labor market is at this point.
• 5:08
  SPEAKER_00: Turning to the blog post for the week, let me uh pull that up now.
• 5:13
  SPEAKER_00: Hold on, just bear with me.
• 5:15
  SPEAKER_00: I gotta remove this one because it only lets me do one at a time.
• 5:20
  SPEAKER_00: Okay, so all of our blog posts go out to the website.
• 5:24
  SPEAKER_00: If you want to see um blog posts and social posts, you really have to check out our Facebook page or LinkedIn page.
• 5:31
  SPEAKER_00: Um, so we try to put those out every day.
• 5:35
  SPEAKER_00: Mondays, Market Monday, as you can see here.
• 5:38
  SPEAKER_00: I talk about kind of similar to this format.
• 5:41
  SPEAKER_00: I talk about what I'm seeing in the economy and the markets and then what I'm looking for in the week ahead.
• 5:46
  SPEAKER_00: So, pretty similar format.
• 5:48
  SPEAKER_00: Brian's been doing a campaign tax Tuesday.
• 5:51
  SPEAKER_00: Um, so this is just some tips.
• 5:53
  SPEAKER_00: Um, as we turn the new year, maximize your retirement contributions, keep an eye on your tax brackets, take advantage of HSAs, charitable giving, defer income if you can, and it's always good to tax logs to harvest if you can.
• 6:08
  SPEAKER_00: And then kind of in a similar theme, um, just some things to look at for the new year, check your life insurance needs, make sure you have enough coverage.
• 6:17
  SPEAKER_00: Um let's see what else we got here.
• 6:20
  SPEAKER_00: Um, review budgets and your income, make sure you're saving, investing.
• 6:25
  SPEAKER_00: If you need help formulating a financial plan, please reach out to our office and and make short-term goals for the year.
• 6:33
  SPEAKER_00: Um, it's really tough to say, you know, I want to make this amount of money in five years from now.
• 6:38
  SPEAKER_00: You really have to have those short-term goals, just like in in uh in in the investing world.
• 6:44
  SPEAKER_00: Like you have your long-term goals, but you need milestone steps.
• 6:47
  SPEAKER_00: What do you want to do to get you toward those goals?
• 6:50
  SPEAKER_00: So make sure you're moving in the right direction.
• 6:52
  SPEAKER_00: Um, I we're gonna keep it short this week.
• 6:55
  SPEAKER_00: Um, hopefully next week we'll have Brian or David alongside me.
• 6:59
  SPEAKER_00: Um, but I hope everyone has a happy and safe new year.
• 7:03
  SPEAKER_00: And we will see you next Friday.
• 7:07
  SPEAKER_00: Before I go, I'm just gonna flip on the disclosures and uh we'll see you next year.
• 7:21
  SPEAKER_01: Security is offered through LPL Financial LLC, member FINRA and SIPC.org.
• 7:27
  SPEAKER_01: Advisory services offered through LPL Financial LLC, a registered investment advisor.
• 7:32
  SPEAKER_01: Brian Peluso, Michael Kutch, and David Harper are registered representatives of LPL Financial LLC.
• 7:39
  SPEAKER_01: Content discussed is for informational purposes only and not intended as an offer or solicitation to buy or sell any security or investment strategy.
• 7:47
  SPEAKER_01: Any opinions expressed are those of the authors and do not necessarily reflect the views of LPL Financial or its affiliates.
• 7:54
  SPEAKER_01: All investments involve risk, including the possible loss of principal.
• 7:58
  SPEAKER_01: This communication may include links or references to third-party websites.
• 8:02
  SPEAKER_01: These links are provided as a convenience only.
• 8:04
  SPEAKER_01: LPL Financial and its representatives are not responsible for the accuracy or content of such sites.
• 8:10
  SPEAKER_01: Brian, Mike, and David, and HBK Provident Advisors may only transact business in states where they are properly registered or exempt from registration.
• 8:19
  SPEAKER_01: Please contact directly for information regarding licensing and registration status.