Markets Still Strong Amid Tech Bubble Worries and Shutdown Uncertainty
Although the financial markets wobbled temporarily in November, ending the month about flat, they remain in a good position to finish the year strong. Could that change? And what does January hold in store? We’ll get to those questions, but first, let’s review.
When November started, there was a lot of concern over the government shutdown. Now that the government has reopened, we’re finally getting fresh economic data again. And overall, the numbers look surprisingly solid.
Holiday shopping seems to be off to a strong start. According to preliminary reports, Black Friday spending was up about 9% from last year, and Cyber Monday was up about 4%.1 That suggests consumers are still spending, even though you may hear stories in the news about people feeling squeezed by the effects of high inflation.
Inflation is now just under 3%, which is historically close to normal. Of course, that doesn’t erase the higher prices we’ve all lived through lately, but it does mean things are stabilizing. Companies are also absorbing a lot of costs behind the scenes (including tariff-related costs), which helps keep everyday prices steadier. The bottom line is that the overall economic picture appears stable, and spending remains strong.
The Markets
November was a relatively subdued month for the markets. As mentioned, Wall Street finished about flat with the S&P 500 and the Dow Jones Industrial Average eking out modest gains, and the Nasdaq closing slightly in the red for the first time in seven months.2
Interestingly, the stock market barely reacted to the government shutdown, which shows how accustomed investors have become to these temporary disruptions. It was only after the shutdown ended that stocks pulled back a bit, and mostly because some of the tech and AI names that have been running hot are starting to look overvalued.
We talked last month about brewing concerns of a potential tech bubble. But there’s a big difference between today’s situation and the tech bubble of the late 1990s, which is that most of the big companies driving the market today are actually making money. So, while valuations may be high, the underlying businesses are stronger than they were in the dot-com era.
Your Portfolios
Despite the markets tapping the brakes in November, they remain in great shape for the year, with the S&P 500 up by about 16%. By comparison, our leading high-dividend yielding stock strategy is up approximately 13% year-to-date, while our most conservative dividend portfolio is up about 7% – both, of course, with more meaningful income.
With our dividend strategies, we are intentionally not chasing speculative growth areas of the market like the tech sector. As with our fixed-income portfolios, our priority remains income first, growth second.
As for our fixed-income accounts, while every strategy is different, on average, our most conservative portfolio of individual bonds and bond-like instruments is still up about 5.5% for the year, depending on your individual holdings. That keeps us on track to meet our targeted annual return of about 6%. If December follows historical patterns, we should finish the year very close to that goal.
Looking Ahead
Only time will tell how December and January set the tone for 2026. The good news is that, from an economic standpoint, there seems to be no major red flags currently. The biggest uncertainties to watch are geopolitical rather than financial, like ongoing conflicts abroad, shipping disruptions, and the occasional resurfacing of tariff concerns.
So far, U.S. companies appear to be absorbing most tariff-related costs rather than passing them along to consumers, which has helped keep inflation contained. All things considered, it’s a largely positive backdrop heading into the new year.
Naturally, we will continue monitoring the markets closely and keep you informed of any major developments. In the meantime, if you have questions, want to review your strategy, or need help with any year-end financial issues, please reach out. We’re here for you throughout the holiday season, aside from a few standard office closures.
Enjoy the holidays, and good luck with your shopping — here’s hoping you find some great deals!
Sources:
1 https://www.cnbc.com/2025/12/02/black-friday-cyber-monday-shopping-turnout-nrf.html
2 https://www.investopedia.com/dow-jones-today-11282025-11858559
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