The rear-view mirror paints a rosy picture. All the primary sectors of the US bond market are posting solid year-to-date gains, based on a set of ETFs through Monday’s close (Dec. 8). Expectations for another rate cut at tomorrow’s policy meeting could extend the rally. But beneath the surface are hints that 2026 could be a more challenging environment for fixed income amid swirling cross currents for policy and macro factors.
Macro Briefing: 9 December 2025
The NFIB Small Business Optimism Index rose 0.8 points in November to 99.0 and remained above its 52-year average of 98. “Although optimism increased, small business owners are still frustrated by the lack of qualified workers,” said NFIB Chief Economist Bill Dunkelberg. “Despite this, more firms still plan to create new jobs in the near future.”
The Everything Rally Endures As The Year’s End-Game Unfolds
With three-and-a-half weeks of trading left for 2025, all the major asset classes are holding on to gains, based on a set of ETFs through Friday’s close (Dec. 5). The top-down view of the bullish trend, however, masks weakness in some corners that could accelerate in 2026.
Macro Briefing: 8 December 2025
US consumer spending in real (inflation-adjusted) terms was flat in September, according to Bureau of Economic Analysis data. The unchanged monthly reading marks the weakest month for real consumer spending since in four months. “Many consumers, especially middle- and lower-income households, face widespread affordability issues that force them to be more cautious and value-based shoppers,” said Kathy Bostjancic, chief economist at Nationwide.
Book Bits: 6 December 2025
● The Great Heist: China’s Epic Campaign to Steal America’s Secrets
David R. Shedd and Andrew Badger
Summary via publisher (HarperCollins)
Through a coordinated “whole-of-society” strategy, the Chinese Communist Party has dramatically expanded its covert operations to acquire America’s most valuable innovations—stealing defense secrets and proprietary technology from companies like Boeing, Lockheed Martin, Google, T-Mobile, and Tesla. By exploiting both human and cyber vulnerabilities, China has quietly looted the crown jewels of Western technology, saving itself trillions in R&D costs since the 1990s—with an ongoing brazenness fueled by decades of Western inaction. Drawing on exclusive investigations and interviews with intelligence officers, corporate security teams, senior policymakers, and espionage victims, David R. Shedd and Andrew Badger reveal how industrial theft has fueled China’s meteoric rise from Third World backwater to global superpower—and present a bold strategic playbook to turn the tide in the greatest economic contest of our time.
Revisiting “Safe” Portfolio Withdrawal Rates For Retirement
Bill Bengen, a financial planner, forged an industry standard in 1994 for thinking about “safe” withdrawal rates for investment portfolios during retirement. His so-called 4% rule provided a quantitative framework for what had been mostly ad-hoc analysis up to that point. In a recent book, the father of the 4% rule has updated his research and now estimates that a safe withdrawal rate is higher than he originally reported.
Macro Briefing: 5 December 2025
US weekly jobless claims fell to the lowest level in over three years last week. The Thanksgiving holiday is probably a factor that’s distorting the data, but recent updates suggest that layoffs remain muted. “The labor market is kind of frozen,” said Kathy Bostjancic, chief economist at Nationwide. “Companies are in wait-and-see mode.”
Weak Labor Market Supports Outlook For Another Rate Cut
Markets were already expecting that the Federal Reserve would cut interest rates again at next week’s policy meeting ahead of yesterday’s of ADP’s estimate of private non-farm payrolls for November. Following the release of jobs data, the news strengthened the dovish outlook.
Macro Briefing: 4 December 2025
US nonfarm private sector payrolls declined 32,000 in November, according to the ADP Employment Report. “While November’s slowdown was broad-based, it was led by a pullback among small businesses,” said ADP’s chief economist. Some economists, however, downplayed the report: “It is too loosely correlated with the official data to be troubling,” advised Samuel Tombs, chief US economist at Pantheon Macroeconomics. “Our model points to a first estimate of a 75,000 to 100,000 increase in private payrolls in November, which after revisions and benchmarking we think would be consistent with growth of about 25,000.”
High-Beta Risk Remains Top-Performing Equity Factor In 2025
As the trading year heads into its final weeks, so-called high-beta shares remain firmly in the lead for US equity risk factors in 2025, based on a set of ETFs through Tuesday’s close (Dec. 2).