On a short holiday week, economic data included gains in retail sales and durable goods orders, as well as higher producer price readings, decelerating home prices, and continued weak consumer confidence. However, the recent government reopening meant some data released was fairly stale at this point.
Equities rebounded into gains last week, led by the U.S. over international. Bonds also fared well as interest rates fell back amidst Fed member dovishness. Commodities also saw gains, mostly in metals.
U.S. stocks recovered back into positive territory last week, following negative performance the week prior, and wrapping up a more volatile November where the S&P 500 only gained 0.2%, but continued a string of seven straight positive months. Stocks gained sharply early in the week as odds of a December Fed rate cut were further absorbed by markets. These odds have been largely driven by dovish or hawkish comments from various FOMC members, with the voting odds now tilted again toward easing. The maxim of “Don’t Fight the Fed” can be powerful when markets are in the midst of rate cuts.
Economic data began to slowly flow again, following the record-long government shutdown, although scheduling remains delayed for a variety of releases. Last week’s highlights included the employment situation report for September coming in a bit stronger than expected, a rise in existing home sales, and improvement in several PMI surveys. However, consumer sentiment remained weak.
Equities fell back globally due to investor concerns about technology stock valuations, potential economic slowing, and an uncertain Fed rate path. Bonds fared well as interest rates fell back. Commodities fell across the board, especially in energy.
U.S. stocks fell back last week, with markets attempting to digest a variety of news. Earlier in the week, Home Depot provided some cautious comments about the health of the consumer, who appeared to be scaling back some home remodeling purchases in light of economic uncertainty, and reduced guidance. The Nvidia earnings report took over the focus by midweek, with Wed. results surpassing expectations, and management noting that AI chip sales were “off the charts,” although sentiment reversed downward along with some AI skepticism. Some of the early-week choppiness was reversed with a strong early gain on Thurs., with a better-than-expected (albeit old) September nonfarm payroll report, which eventually soured hopes downward when a no-cut December looked like more of a possible reality. Friday’s recovery was helped by New York Fed President Williams support of lower interest rates, which sharply raised market odds of a December cut after all back over 50%.
Economic data remained sparce last week, but as the federal government shutdown ended, coming weeks should see a more normal report flow.
Equities were mixed, with foreign stocks seeing gains, offset by declines in U.S. large cap growth and small cap. Bonds fell back as yields rose across the U.S. Treasury curve. Commodities gained, again led by precious metals, while oil was little-changed.
U.S. stocks were mixed on the week, with large cap indexes up slightly, while the Nasdaq and small cap groups fell back. Early Monday, stocks saw gains as hopes rose over the weekend for a short-term resolution to the government shutdown, which would offer a brief holiday respite. The bill was signed by late Wed., which funds the government through Jan. 30, and included controversial funding for SNAP food assistance programs. However, the longer-term issue of health care subsidies, which is the sticking point between the two parties, has yet to be addressed. Health insurance premiums are expected to soar again in 2026, continuing a pace that ramped up during the pandemic. By Thursday, the lack of available data and depth and length of the government shutdown weighed on investors, fearing additional weakness in the quarter. This was in addition to some diminished excitement for the buoyant 2025 theme of artificial intelligence, as valuations have continued to run on the higher side of consensus expectations for near-term revenues, albeit with still imperfect visibility on AI benefits flowing through to the economy, and impact on labor markets. Overall, we’ve seen a negative reversal for stocks referred to as ‘momentum,’ ‘high beta,’ and ‘low quality,’ which had rallied so sharply since April’s ‘Liberation Day.’ By contrast, stocks with higher-quality fundamentals have tended to lag in relative terms, which is the opposite of their stronger results over longer-term time periods.
By sector, health care and energy led with returns of several percent, followed by consumer staples and materials. Laggards were led by consumer discretionary (Tesla and Amazon) as well as utilities, industrials, and communications. Real estate also fell back as interest rates ticked higher.
Foreign stocks were the leaders for the week, with Europe and Japan up a percent or more, followed by lesser gains for emerging markets. Some industrial and labor releases in Europe and the U.K. came in a bit weaker than expected, which appeared to raise hopes for further central bank rate cuts. There also appeared to be positive sentiment around the U.S. government reopening—perhaps even more so than in the U.S. itself. Emerging market gains were centered in Brazil, India, and South Africa, the latter of which fared especially well as S&P upgraded their sovereign credit rating a bit from BB- to BB, noting a stronger growth and fiscal path.
Bonds fell back by a fraction of a percent in the U.S., along with higher yields along the U.S. Treasury curve; the one positive performer was floating rate bank loans. The rise in rates appeared to be aligned with falling expectations of a December FOMC rate cut, where odds have fallen from a near-certainty a few weeks ago to now around 50/50. Foreign bonds were mixed, with a slightly weaker U.S. dollar helping local emerging market debt outperform other groups.
Commodities saw gains in all groups, led by precious metals up by several percent, followed by energy. Crude oil rose just a fraction of a percent to $60/barrel. Natural gas, one of the most volatile commodity contracts, saw prices spike by nearly 10%, due to a early cold snap across the U.S. and expectations for a cooler winter associated with La Niña, as well as strong exports that have lowered domestic supply levels.
Period ending 11/14/2025
1 Week %
YTD %
DJIA
0.41
12.42
S&P 500
0.12
15.77
NASDAQ
-0.43
19.24
Russell 2000
-1.79
8.32
MSCI-EAFE
1.66
27.73
MSCI-EM
0.31
31.41
Bloomberg U.S. Aggregate
-0.24
6.57
U.S. Treasury Yields
3 Mo.
2 Yr.
5 Yr.
10 Yr.
30 Yr.
12/31/2024
4.37
4.25
4.38
4.58
4.78
11/7/2025
3.92
3.55
3.67
4.11
4.70
11/14/2025
3.95
3.62
3.74
4.14
4.74
Sources: LSA Portfolio Analytics, American Association for Individual Investors (AAII), Associated Press, Barclays Capital, Bloomberg, Deutsche Bank, FactSet, Financial Times, Goldman Sachs, JPMorgan Asset Management, Kiplinger’s, Marketfield Asset Management, Minyanville, Morgan Stanley, MSCI, Morningstar, Northern Trust, Oppenheimer Funds, Payden & Rygel, PIMCO, Rafferty Capital Markets, LLC, Schroder’s, Standard & Poor’s, The Conference Board, Thomson Reuters, U.S. Bureau of Economic Analysis, U.S. Federal Reserve, Wells Capital Management, Yahoo!, Zacks Investment Research. Index performance is shown as total return, which includes dividends, with the exception of MSCI-EM, which is quoted as price return/excluding dividends. Performance for the MSCI-EAFE and MSCI-EM indexes is quoted in U.S. Dollar investor terms.
The information above has been obtained from sources considered reliable, but no representation is made as to its completeness, accuracy or timeliness. All information and opinions expressed are subject to change without notice. Information provided in this report is not intended to be, and should not be construed as, investment, legal or tax advice; and does not constitute an offer, or a solicitation of any offer, to buy or sell any security, investment or other product.
Economic data was again limited due to the federal government shutdown, but included improvements in ISM services and ADP employment, while ISM manufacturing and consumer sentiment fell back to varying degrees.
Equities were largely down around the world, led by a pullback in the technology group. Bonds were flat with little change in Treasury yields. Commodities were also relatively flattish for the week, and oil fell slightly.
U.S. stocks experienced on off-week, as technology experienced the bulk of the declines, down around -4% (led by down Nvidia, Microsoft, and Salesforce), followed by communications. On the positive side, gains were seen in energy, health care, and financials.
As we move toward the final quarter of 2025, the LSA Investment Policy Committee is taking proactive steps to ensure that portfolios remain aligned with evolving market conditions. Economic growth continues, though at a more balanced pace, with moderating inflation and ongoing shifts in policy expectations shaping both equity and fixed-income dynamics. Against this backdrop, the committee has elected to implement model updates across all platforms to reflect our current views on opportunity, risk, and diversification.
Model Update Schedule
Posted Tuesday, October 28th – American Funds, BME, CBP, ETF, Private Client Blended, and Private Client L100k – Targeted model update – Tuesday, November 4th.
Posted Wednesday, October 29th – PC IQ, Private Client, PC Trad, and ETF Tactical– Targeted model update – Wednesday, November 5th.
Posted Thursday, October 30th – PC Sleeve, PC Income Strat, PC Tax Eff – Targeted model update – Thursday, November 6th.
Posted Tuesday, November 4th – Impact Series, DFA, DFA Blended, Fidelity, and Vanguard – Targeted model update – Thursday, November 11th.
VA and VUL model updates will be posted the week of November 10th.
The mutual fund model revisions impact the NTF models as well. As a reminder, the Revision Explanation will be posted in the “Portfolio News” section on each platform home page.
After several quarters of solid market performance, portfolio drift has increased as different asset classes have moved unevenly. To ensure that risk controls and intended exposures remain aligned with our strategic objectives, the committee is encouraging a full rebalance across all models. This update is designed to recalibrate exposures, manage interest-rate sensitivity, and reintroduce balance between domestic and international equity opportunities.
Core Themes Driving This Revision
Managing Duration While Maintaining Quality Bond markets continue to stabilize following the rapid repricing of rate expectations earlier in the year. With inflation moderating and the Fed signaling flexibility, we see a window to extend duration modestly while maintaining a focus on high-quality issuers. This adjustment is designed to add resilience should yields move lower into 2026, while avoiding unnecessary credit risk in the later stages of the cycle.
Focusing on U.S. Equity Leadership and Top Performers Domestic equities remain the cornerstone of growth-oriented portfolios. Our focus is on identifying leading managers and sectors driving sustainable performance, with attention to innovation, balance sheet strength, and earnings durability. We are refining exposures to ensure that portfolios capture top-tier U.S. performance while mitigating concentration in overextended areas.
Reintroducing Select International Exposure We continue to believe diversification beyond U.S. borders adds meaningful value over the long term. As policy cycles diverge and valuations remain favorable overseas, the committee is gradually increasing targeted international exposure, particularly in regions showing improving growth trends and attractive risk-adjusted return profiles.
This model revision represents a disciplined reset—realigning portfolios to their intended risk posture, refreshing manager exposure, and maintaining quality across asset classes. As always, the committee remains focused on long-term outcomes, risk-adjusted returns, and ensuring that each model reflects our best thinking on the current investment landscape.
Economic data from the U.S. government remained on hold, while private sources showed housing prices flattening, and continued challenged consumer sentiment. The Federal Reserve cut interest rates by a quarter-percent, as markets already expected.
Equities were mixed globally, with gains and losses dispersed by region. Bonds were largely down in the U.S. upon higher interest rates, and mixed abroad, with a stronger dollar. Commodities were also mixed, with oil prices little-changed.
Economic data remained sparce as the federal government shutdown continued, with the exception of CPI inflation, which remained high, but somewhat cooler than expected. Private sources included gains in manufacturing and services PMI, as well as existing home sales, while weakness continued in consumer confidence.
Equities rose globally, led by the U.S. and emerging markets. Bonds fared positively in the U.S. credit segment, but lagged internationally with a stronger dollar. Commodities were generally higher with additional Russian sanctions reducing potential crude oil supplies.
U.S. stocks started the week strongly, with hopes of both an end to the U.S. government shutdown (which didn’t happen), as well as stronger chances of progress between the U.S. and China, via expected upcoming meetings. By Friday, the delayed September U.S. CPI report came in a bit less inflationary than expected, which raised chances of the Federal Reserve continuing their easing plan this coming week, and perhaps again in December.
Economic data remained sparce with the U.S. government shutdown continuing beyond its second week.
Stocks rebounded upward last week as U.S. earnings season began. Bonds also saw gains as interest rates fell, helped internationally by a weaker dollar. Commodities rose a bit due to gains in precious metals offsetting declines in energy.
U.S. stocks fared positively for the week, reversing a sharply negative prior week. Markets opened the week positively after the Israel-Gaza ceasefire news, and U.S. administration comments over the weekend that U.S.-China trade tensions “will all be fine,” which neutralized some of the sharp negativity and near -3% drop in the S&P the prior Friday. By Friday, the administration noted that high tariffs on China were “not sustainable.” The back and forth around U.S.-China trade relations continued, while a dovish Federal Reserve, and continued positive sentiment around AI moved prices higher.
Economic data included an improvement in the ISM manufacturing report, although it stayed in contraction, while ISM services fell to neutral. Several reports weren’t published because of the Federal government shutdown, including the closely-watched employment situation report.
Equities saw gains last week globally, led by international markets over U.S. Bonds fared positively as well, as assumed plans for Federal Reserve easing and the government shutdown pulled down yields. Commodities were mixed, with strength in metals and weakness in energy.
U.S. stocks fared positively, despite the rising odds of a government shutdown at quarter-end (and reality on Oct. 1), being offset by weaker labor data, which perpetuated the assumption of another Federal Reserve cut late in October. Artificial intelligence sentiment and momentum also remained high. By sector, gains were strongest in health care, followed by utilities and technology. In health care, up 7%, this was led mostly by Pfizer, after an agreement between the firm and the U.S. administration to lower prescription drug prices in the Medicaid program in exchange for tariff relief. Declines were most pronounced in energy and communications, with the latter being due to falling oil prices. Real estate ticked up slightly for the week, with declines in interest rates. Earnings results for Q3 will be rolling out next week, which could take some of the attention away from other macro events.
Economic data included an improvement in the ISM manufacturing report, although it stayed in contraction, while ISM services fell to neutral. Several reports weren’t published because of the Federal government shutdown, including the closely-watched employment situation report.
Equities saw gains last week globally, led by international markets over U.S. Bonds fared positively as well, as assumed plans for Federal Reserve easing and the government shutdown pulled down yields. Commodities were mixed, with strength in metals and weakness in energy.
U.S. stocks fared positively, despite the rising odds of a government shutdown at quarter-end (and reality on Oct. 1), being offset by weaker labor data, which perpetuated the assumption of another Federal Reserve cut late in October. Artificial intelligence sentiment and momentum also remained high. By sector, gains were strongest in health care, followed by utilities and technology. In health care, up 7%, this was led mostly by Pfizer, after an agreement between the firm and the U.S. administration to lower prescription drug prices in the Medicaid program in exchange for tariff relief. Declines were most pronounced in energy and communications, with the latter being due to falling oil prices. Real estate ticked up slightly for the week, with declines in interest rates. Earnings results for Q3 will be rolling out next week, which could take some of the attention away from other macro events.
Economic data included a revision higher for Q2 U.S. economic growth, as well as strength in durable goods orders and new home sales. Jobless claims have stabilized after a few unusual weeks, including some fraudulent activity. Consumer sentiment remained challenged, with a good degree of pessimism about the economy and labor markets.
Equities were mixed, with declines in the U.S. and emerging markets, while Europe saw gains. Bonds were generally down as interest rates rose along with strong economic results and inflation. Commodities also gained, largely coinciding with crude oil.
U.S. stocks declined on net last week, led downward by growth stocks and small cap, in a reversal of the prior few weeks. By sector, energy led the way, up 5% along with a spike in oil prices, as well as utilities, while materials lagged with a decline of a few percent, in addition to consumer discretionary and consumer staples. The week featured a variety of unusual headlines, which included a large investment from Nvidia in OpenAI, and the U.S. administration’s involvement in a spin-off of TikTok’s U.S. operations from its Chinese operator for $14 bil. Early in the week, tech firms especially tried to interpret implications of the administrations of the new H-1B visa fee of $100,000, which has a strong impact on technology company employees, primarily from India. However, confusion continues around who is responsible for paying the fee, whether or not it’s a one-time charge, and how it would affect current U.S. workers on visa. A 100% tariff on branded pharmaceuticals was announced (except for the EU and Japan), for any firm not planning a manufacturing facility in the U.S., as well as new levies on heavy trucks, (upholstered) furniture, and kitchen cabinets.
Economic data include the Federal Reserve reducing policy short-term interest rates by a quarter-percent, as expected. Gains were seen in retail sales and industrial production, regional manufacturing surveys saw mixed results, while housing starts and homebuilder sentiment continued to weaken.
Equities rose in the U.S. and internationally for the most part, buoyed by easier central bank policy. Bonds were mixed to lower, along with higher longer-term rates. Commodities declined in several sectors.
U.S. stocks gained last week, with solidified hopes for a Federal Reserve rate cut this coming week, as well as continued optimism about the potential for artificial intelligence, which has been the broad theme driving much of the market’s upward movement. Early in the week, hopes for a ‘jumbo’ (0.50%) Fed rate cut in Sept. elevated the mood, with that hope driven by weaker labor markets. (This was particularly driven home by revisions for the year ended March 2025 showing that 911k fewer jobs were created than first assumed.) However, the Fed usually has a high bar for extreme easing moves, especially if inflation remains at current elevated levels.
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