Investment Week at a Glance
Stocks finished higher for the week. The Dow Jones Industrial Average rose 0.3%, the S&P 500 was up 0.1%, and the NASDAQ fell 0.5%. Foreign stocks (MSCI EAFE) were up for the week, rising 2.8%. Bond prices were down for the week, with the 10-year U.S. Treasury ending the week at 4.15%. (Data source: Wall Street Journal)
Government Shutdown Ends
After 43 days, the longest U.S. government shutdown has ended as a bill to fund the government through January 30, 2026, has been passed. This was positive for markets as some uncertainty came off the table, although we could see the same issue come up in Q1. The other positive is that we will start getting more economic data, which will give markets and the Fed a better idea of how things are going. This will be important for the Fed and its December meeting to possibly cut rates once again. Just a month ago, markets had a 96% chance of a rate cut priced in, and now that sits at 51%.
GDP Growth Expected to Slow
Q4 GDP is expected to slow to 1.1% due to the shutdown, as estimates were in the 2.5%-3.0% range prior. Expectations are for GDP to rise in the next couple of quarters following the weak Q4. The economic outlook is a little shaky heading into 2026 as unemployment has risen slightly, and consumer confidence has reached a new 3.5-year low. Although there are some signs of weakness, with the Fed cutting rates, the shutdown ending, and companies continuing to invest in America, many are optimistic for another strong year economically.
Berkshire Hathaway Buys Alphabet
Berkshire Hathaway disclosed a $4.3 billion stake in Alphabet in their Q3 filings. This move came as somewhat of a surprise, as Berkshire and Buffett are typically more value investors than the big tech names. Even when they bought Apple, Buffett said it was more of a consumer play than a pure tech play. The new investment could be indicative of what Berkshire’s investments look like moving forward as Buffett steps down at the end of this year. (CNBC)
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Quiz
How much are foreign equities (MSCI EAFE) up for the year? (Scroll Down for Answer)
- 26%
- 31%
- 36%
- 40%
Answer:
- 26%. Foreign markets continue to have a strong year and outperform domestic equities by nearly double for the year.
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