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December 15, 2025

Beacon Weekly Investment Insights 12.15.25

Portfolio Manager, Matthew Kelly, provides insights to guide you through changing market conditions. Please read the full text below or download the PDF version.

The start of the trading week was marked by a variety of different news topics and following recent trends, a flood of technology headlines hit the tape shortly after the opening bell. Market bellwether, International Business Machines (IBM), was the first to make a splash with the acquisition of a firm named Confluent (CFLT) – in hopes of bolstering their software unit by integrating the target company’s unique real-time data offerings into their existing artificial intelligence solutions. Perhaps most importantly for the broader technology space, accessibility to Nvidia’s chips, along with several other key players was expanded – by virtue of a measure that President Trump recently approved, which effectively enables these highly-sought-after products to be shipped to China and other nations. Specific to Nvidia and China, the federal government will now allow Nvidia’s H200 chips to be exported (these chips are one generation behind their flagship Blackwell models for reference), the caveat being: the federal government plans to take a 25% cut of all sales.

In other news, long-time Berkshire Hathaway investment veteran, Todd Combs, who was the CEO of the company’s insurance subsidiary (GEICO) and one of Warren Buffet’s trusted confidants, declared he will be leaving the firm to take on a newly established position at JPMorgan Chase, where he’ll be responsible for sourcing investment opportunities across a diverse subset of industries, such as defense and healthcare. There was also some buzz this week surrounding the recent Warner Bros. and Netflix deal – with Paramount Studios attempting to woo shareholders with the announcement of a $30/share tender offer, higher than what Netflix tentatively agreed to purchase most of the company’s assets for (it is worth noting that the Netflix deal for $27.75/share was only for their studio and streaming services, whereas Paramount’s bid also bundles their linear cable business). In sum, if enough Warner Brothers shareholders take Paramount up on their proposition, there is a chance they could ultimately take control of the company. Lastly, earnings reports from Broadcom and Oracle made waves later in the week, as the respective firms did not receive their usual fanfare and fell short of investor hopes – with selloffs in both names transpiring shortly after both reports were disseminated. The Broadcom reaction in particular left many investors perplexed – as the company exceeded expectations and issued strong guidance, projecting that its AI chip sales could double in the near future. Proft taking and concerns over margins were cited as potential reasons for the decline.

The Federal Reserve’s December meeting took center stage though, with policymakers choosing to cut rates by 25 basis points for a third consecutive time, adjusting the target rate to 3.5-3.75%. It should be noted that the voting is becoming more contested (9-3) – with two voting members, Austan Goolsbee and Jeffrey Schmid, preferring to keep the funds rate unchanged. One member (Stephen Miran) opted for a deeper 50 basis point cut for the second consecutive time (voted this way in October as well). Since President Trump's endorsement, Miran has consistently supported the President's lower interest rate agenda and will likely continue to do so, until his temporary term ends in early 2026. A revelation that likely caught some off guard was the announcement that the Fed will begin purchasing upwards of $40 billion per month of Treasury Bills, in order to maintain ample reserves. Other findings related to GDP, unemployment, and inflation held relatively firm. Moving forward, the Fed’s dot plot is implying one cut in 2026 and another in 2027. Furthermore, Chairman Powell continued to echo that the Fed will remain data dependent, as they strive to balance their dual mandate of max employment and stable prices.

Outside of the Fed’s monetary policy decision, it was a relatively light week for economic data, but several important insights emerged, mainly on the labor market front. The first major data release that market participants parsed through was the October Job Openings and Labor Turnover Survey (JOLTS) report – which signaled a labor market that may be cooling slightly but overall, it affirmed a rather stable picture. The level of job openings was relatively unchanged from September (7.7 million) but higher than formal expectations (7.2 million), while hires and separations were somewhat muted. The report also brought to light that the level of voluntary departures fell to its
lowest level in over a decade (outside of the pandemic) – a clear indication of diminishing worker confidence, contrasting sharply with the conditions experienced only a short time ago. Thursday’s initial jobless claims reaffirmed the cooling but not collapsing market thesis, as there was a sharp jump in weekly claims (44k) causing the total figure (236k) to surpass market expectations of approximately 220k. Continuing claims depicted a slightly rosier picture, as they fell to around 1.84mm – below what the market was predicting and reflective of the lowest mark since April.

The confluence of events mentioned above caused several of the major equity averages to retreat for the week, snapping a two-week winning streak. The S&P 500 and the Nasdaq fell 0.6% and 1.60% respectively; however, the Dow Jones Industrial Average bucked the trend, closing up 1.1%. A clear shift in investor preference occurred this week, with small cap stocks registering strong absolute/relative performance and blue-chip stocks (many of which are well-represented within the Dow Jones Industrial Average) – had a resurgence of sorts, wrapping up the week with strong gains. Sector wise, we saw materials, financials, and industrials settle near the top of the weekly leaderboard; alternatively, some of the recent highfliers like technology, communication services, and utilities slipped. Shifting gears to the other asset classes, rates presented a mixed picture: shorter-dated yields fell, with the 2-year Treasury decreasing by 5 basis points, while longer-dated government bond yields rose, as the 10-year Treasury increased by 4 basis points. Oil’s prolonged decline persisted, with prices dropping more than 4% this week, bringing the total year-to-date loss close to 20%. Gold is poised to seal a banner year, closing 2% higher for the week and extending its gain for the year to over 60%.

Looking ahead, the market spotlight shifts to a series of major data points next week. We'll receive a check on the health of the housing market (housing starts, existing home sales), the consumer (retail sales, University of Michigan survey) – along with the much-anticipated December inflation report.

Market Scorecard:	12/12/2025	YTD Price Change
Dow Jones Industrial Average	48,458.05	13.90%
S&P 500 Index	6,827.41	16.08%
NASDAQ Composite	23,195.17	20.12%
Russell 1000 Growth Index	4,742.61	17.33%
Russell 1000 Value Index	2,077.61	13.91%
Russell 2000 Small Cap Index	2,551.46	14.41%
MSCI EAFE Index	2,855.60	26.25%
US 10 Year Treasury Yield	4.18%	-39 basis points
WTI Crude Oil	$57.44	-19.91%
Gold $/Oz.	$4,328.30	63.89%