• The S&P 500 is on track for a third consecutive year of double-digit returns, up about 15%, despite a near bear-market correction in April, rewarding investors who stayed the course through volatility. International equities have fared even better, with the MSCI All Country World Index (ex-U.S.) up 23%, driven by a weaker U.S. dollar and an improving global growth outlook.
  
  

  

• Economic resilience continued in 2025, with growth holding firm and recession calls fading. The U.S. economy contracted in the first quarter as companies front-loaded imports ahead of tariffs, but activity rebounded strongly in the second and third quarters, supported by solid consumer spending and AI investments. Consumer confidence remains subdued, exacerbated by the recent government shutdown, but spending has held up, highlighting a disconnect between sentiment and behavior. Much of this spending strength is concentrated among wealthier households that have benefited from significant stock-market gains, contributing to the gap between how consumers feel and how they spend, as lower-income cohorts face pressure from slower wage growth and rising essential costs. Nonetheless, forecasts point to a robust holiday season, with the National Retail Federation projecting retail sales to rise about 4% from last year, surpassing $1 trillion for the first time.
  
  

  

• Ongoing economic growth provided a solid backdrop for corporate earnings not only to grow but also to consistently surpass expectations throughout the year. U.S. large-cap companies significantly outperformed GDP growth, with S&P 500 profits on track to rise about 11% year-over-year and profit margins holding near record highs. While tariffs posed a challenge — as an estimated 70% of the added costs were absorbed by businesses — companies offset the impact through cost-cutting, productivity gains, supply-chain adjustments, and selective price increases. With limited room for further valuation expansion, earnings growth will remain the primary driver of stock prices next year. Consensus currently calls for 14% earnings growth in 2026.
  
  

  

• The launch of ChatGPT in late 2022 sparked billions of dollars in AI investment and fueled a powerful rally in the tech-heavy Nasdaq that has persisted through this year. This wave of innovation has the potential to reshape the economy, unlocking new growth opportunities and boosting productivity. However, it also carries risks, such as overconcentration, stretched valuations, and potential disappointment if AI adoption falls short of expectations. AI trends remain durable, and technological adoption will continue to serve as a positive market catalyst. That said, we emphasize the importance of portfolio diversification, valuation discipline, and risk management. The AI trade remains intact, even as market leadership broadens beneath the surface.
  
  

  

• After considerable debate and several shifts in interest-rate expectations, the Fed resumed its easing cycle this year following a prolonged pause. This pivot toward a less restrictive stance has eased financial conditions and helped bring the average 30-year mortgage rate down from 7.1% to 6.4%. While questions remain about the future path of rates, we expect the Fed to ease cautiously, with the overall trend pointing lower through 2026, supporting economic growth and financial markets.
  
  On the inflation front, WTI oil prices have averaged $65 per barrel this year, down from $76 last year, helping to ease inflation. Tariffs have led to some upward pressure on goods prices, though less than anticipated, while services inflation continues its gradual decline. Overall, headline CPI is decelerating modestly, from 3% in 2024 to 2.7% so far in 2025.
  
  

  

• With one month remaining, 10-year Treasury yields are poised to finish the year near the lower end of their two-year range, around 4.0%, down from this year’s peak of 4.8%. Despite the recent pullback, yields remain historically attractive, near their highest levels in 15 years, offering bond investors income that exceeds inflation. Looking ahead to 2026, we anticipate solid bond returns, likely driven primarily by income rather than price appreciation.
  
  

  

• After a brief wobble in early November, equity markets regained momentum, with the S&P 500 finishing the month with a slight gain. Seasonal trends point to a strong year-end finish: historically, the post-Thanksgiving period has delivered solid returns. Over the past 30 years, December has averaged a gain of about 1%, with markets rising roughly 70% of the time.
  
  

  

• As we wrap up 2025, markets have navigated a complex landscape — policy shifts, global uncertainty, and valuation concerns — yet have delivered meaningful progress for investors. The six drivers highlighted underscore a powerful theme: resilience. From substantial equity gains and fading recession fears to innovation and income opportunities, these forces remind us that staying invested and disciplined over time is key.
  
  We think 2026 offers a constructive backdrop, even as risks persist. Elevated valuations will require vigilance, but steady growth, lower rates, and rising profits provide reasons for optimism. In this season of gratitude, let’s appreciate the opportunities that markets continue to offer and help ensure portfolios are positioned for resilience and growth in the year ahead.
  
  
• Final Words: Market indicates extreme fear. Buy VOO, VGT, and GLD (Gold).
  
  

  

  Below is last week sector performance report.
  
  Weekly Sector Performance for Nov 24-28, 2025:
  
  $XLE Energy: 1.79%, RSI: 55.63
  $XLK Technology: 5.17%, RSI: 50.88
  $XLC Communication: 4.93%, RSI: 58.23
  $XLY Consumer Discretionary: 6.92%, RSI: 54.67
  $XLP Consumer Staples: 3.00%, RSI: 61.82
  $XLF Financial: 4.34%, RSI: 58.10
  $XLV Health Care: 4.11%, RSI: 76.07
  $XLI Industrials: 3.96%, RSI: 55.35
  $XLB Materials: 5.85%, RSI: 60.83
  $XLRE Real Estate: 3.22%, RSI: 56.53
  $XLU Utilities: 2.97%, RSI: 59.39
  
  

  

If you are looking for investment opportunities, you can take a look at our Hidden Gems section, and if you want to see our past performance, visit our Past Performance section. If you are looking for safe and low cost Exchange Traded funds(ETFs), check out our ETF recommendations.

Currrent Shiller PE (see below) is showing overbought conditions as index is far above mean/media and our AryaFin engine is indicating caution. Have a good weekend.

The Buffett Indicator (aka, Buffett Index, or Buffett Ratio) is the ratio of the total United States stock market to GDP.