In 1994, financial planner Bill Bengen established a groundbreaking concept regarding “safe” withdrawal rates for retirement investment portfolios. His “4% rule” introduced a structured approach to what had largely been a subjective process up until that time. Recently, Bengen updated his research and now posits that the safe withdrawal rate could be higher than his original findings suggested.
Last week, US weekly jobless claims dropped to their lowest level in over three years. The Thanksgiving holiday may have influenced this data, yet recent trends indicate that layoffs remain low. “The labor market is somewhat stagnant,” stated Kathy Bostjancic, chief economist at Nationwide. “Employers seem to be in a wait-and-see stance.”
Markets anticipated a further reduction in interest rates by the Federal Reserve during next week’s policy meeting, particularly following ADP’s estimate of private non-farm payrolls for November. The release of the job data confirmed and reinforced a cautious outlook.
According to the ADP Employment Report, US nonfarm private sector payrolls fell by 32,000 in November. “This broad-based slowdown was primarily driven by a decline at small businesses,” noted the chief economist at ADP. Conversely, some economists urged caution regarding the report, with Samuel Tombs, chief US economist at Pantheon Macroeconomics, stating, “Its loose correlation with official data makes it less concerning. Our model predicts a first estimate of an increase in private payrolls between 75,000 and 100,000 for November, which, after revisions, we believe would indicate growth of about 25,000.”
As the trading year approaches its conclusion, high-beta stocks continue to dominate US equity risk factors for 2025, as indicated by a range of ETFs through the close on December 2.
Alternative metrics may offer a more effective means of predicting a market bubble, as stated by The Economist: “Spikes in online searches provide a more accurate forecast of a potential decline than traditional valuations. The accompanying chart illustrates that the market values of stocks, funds, and cryptocurrencies significantly dropped within a year following peaks in internet interest. Furthermore, this pattern was consistent for assets like the ARKK fund, Bitcoin, GameStop, and SPACs, all witnessing price booms closely aligned with heightened searches.”
Long-term projections for the Global Market Index (GMI) remain steady, anticipating an annualized total return exceeding 7%, based on data collected through November. The forecast has shown stability in recent months, with a slight increase compared to the previous month’s estimates.
US manufacturing has contracted for a ninth consecutive month in November, as indicated by the ISM Manufacturing Index. “The manufacturing sector continues to face challenges, largely due to the uncertain landscape of tariffs,” remarked Stephen Stanley, chief U.S. economist at Santander U.S. Capital Markets.
Most major asset classes experienced gains in November, building upon the robust performance from the previous month, as indicated by a range of ETF proxies. US real estate investment trusts led the charge with impressive returns last month.
US consumers made history by spending a record $11.8 billion online during the Black Friday shopping period. This represents a 9.1% increase from last year, as reported by Adobe Analytics, which specializes in tracking e-commerce trends. Notably, the spending surge occurred despite a dip in consumer sentiment, according to a recent CBS News/YouGov poll.
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