Before we zoom out and offer a broad view of 2025 and high-level expectations for 2026, it’s wise to address recent economic data and market activity in our December market update. Here are three noteworthy developments from the past month.
1. Equity markets shifted in favor of the average stock
As discussed in our November market update, there is momentum behind AI, but chasing performance is ill-advised.
That caution has already found traction. We’ve seen healthy signs of the depth of individual equities over the past month. The market shifted marginally away from the top-heavy components of the S&P 500, broadening as average stocks gained value.
This shift supports the importance of appropriate risk management and a diversified approach to capital markets.
2. Jobless claims data countered a softening labor market
Economic data released over the past four weeks shows jobless claims dropping even lower.
Previously, we’ve discussed expectations of a softening labor market. Yet, as this jobless claims data shows, it’s important to remember that no one can make foolproof predictions on the direction of the markets or economy. Expectations are meant to be helpful, but we know how to hold them carefully.
It’s an investment cliche, but it’s true: No one has a crystal ball. This is more evidence that proper risk management and diversification are essential.
3. A growing service sector highlights the need for disciplined investing
Data from the past four weeks also showed that the service sector of the economy grew for the ninth consecutive month. While not a perpetual trend, conventional wisdom and market pundits didn’t predict growth would last this long, reminding us that the markets rarely behave the way the masses expect them to.
In other words, once again, this data highlights that the ability to maintain diversification and manage risk in a thoughtful way is foundational and will continue to be so in 2026. That’s exactly how the Credent Investment Team will approach capital markets and overall portfolio allocation on behalf of our clients in the new year.
Responding to the December market update
The theme of the December market update is obvious: prioritize risk management and diversification in your portfolio.
Also, as always, remember what you can and cannot control.1 Stay invested in the equity market, keep saving well for the future, and commit to prudent investment strategies. Your decisions can impact your long-term success as an investor and consumer, and Credent is here to help you make the best decisions for your situation.
If you have questions about our December market update, reach out to our team using the form below.
Contributing sources & influences
1. The concept of “what you can and can’t control” is inspired by a historical version of J.P. Morgan Asset Management’s Guide to Retirement.