The Capital Spectator is drifting into holiday mode as our editorial engines power down for the rest of the year. After the elves crunch the numbers and tally the market mischief, we’ll return on Friday, Jan. 2, with a recap of how the major asset classes fared in 2025.
Buon Natale e Felice Anno Nuovo!
Identifying the reasons why the stock market rises or falls is challenging, if not impossible, but the slide in interest rates has surely bees a non-trivial factor in lifting equities this year. A key question for 2026: Will the tailwind continue?
US is pursuing third oil tanker linked to Venezuela, highlighting escalating tensions between the two countries. The “active pursuit” pursuit of the tanker by the US Coast Guard is related to a “sanctioned dark fleet vessel that is part of Venezuela’s illegal sanctions evasion”, a US official said. “It is flying a false flag and under a judicial seizure order.” The news is a factor that’s lifting oil prices today. “The market is waking up to the fact that the Trump administration is taking a hardline approach to Venezuelan oil trade,” said June Goh, senior oil market analyst at Sparta Commodities.
Here’s part II of our year-end review of Book Bits columns published in 2025, the counterpart to last week’s prelude. Happy reading!
● Rethinking Investing: A Very Short Guide to Very Long-Term Investing
Charles D. Ellis
Summary via publisher (Wiley)
In just 10 short, accessible, and inviting chapters, Rethinking Investing: A Very Short Book on Very Long-Term Investing presents straightforward steps that ordinary people can take to better invest their money. This book dispels myths about the value of investment managers, highlights emotional tendencies that can cloud our financial judgment, explains why index funds are a savvy choice, and reveals secrets like why it’s better to wait until age 70 to receive Social Security benefits—along with the calculations that make this decision crystal-clear. Written by renowned investor and popular author Charley Ellis, this must-read resource shows you how to set yourself up for investment success.
The market premium for the 10-year Treasury yield continues to trade at a narrow gap over a “fair value” estimate, based on the average estimate for three models run by CapitalSpectator.com.
US consumer inflation’s annual pace slowed more than expected in November, the Labor Department’s Bureau of Labor Statistics said. Headline CPI dipped to a 2.7% increase vs. the year-ago level while core CPI fell to 2.6%, a four-year low. Some analysts raised doubts about the numbers, citing the disruption in data collection due to the government shutdown. “The report wasn’t just noisy and full of gaps, it provided a downwardly biased perspective of inflation,” said Gregory Daco, chief economist at EY-Parthenon. “The downward bias stemmed from the carry-forward methodology that assumed an unchanged price index in October for all surveyed data – imparting a downward bias to inflation dynamics.”
Echoing the strong run in foreign equities in 2025, bond markets ex-US are also having a good year. Using a set of ETFs to track the major international buckets of fixed-income securities shows across-the-board outperformance over a popular US benchmark through Wednesday’s close (Dec. 17).
Business inflation expectations in December remained steady at a 2.2% pace for the year-ahead outlook, according to the Atlanta Fed’s latest survey data. The current estimate is relatively middling for the range of results reported in 2025.
The delayed payrolls reports finally arrived, but the news is mixed, at best. The Labor Department said that sharp swings in hiring unfolded in October and November. Looking through the monthly volatility suggests that hiring is slowing, slipping to a pace that’s raises a warning flag for the economic outlook in early 2026.
US payrolls rebounded moderately in November after posting a sharp decline in October, the Labor Dept. reports. The October slide was largely due to federal government employees leave jobs after accepting buyouts from the Trump administration’s DOGE initiative. Meanwhile, the unemployment rose to 4.6%, a four-year high. “The US economy is in a hiring recession,” Heather Long, chief economist at the Navy Federal Credit Union, wrote on X.
