Monthly Observations - December 2025
Monthly Observations
The S&P fell just -0.05% in December, which broke its streak of consecutive monthly gains, but still retained an impressive year-to-date return of 16.4%. The MSCI All Country World index, however, rose 0.9% during the month, increasing its year-to-date gains to 20.6%. The Bloomberg U.S. Aggregate Bond index fell slightly, -0.15% in December, which reduced its full year return to 7.3%.
The final month of the year was relatively uneventful, with the war in Ukraine continuing for a fourth straight year and the Federal Reserve continuing to cut interest rates, although at a measured pace. Markets had a strong 2025, with most of the gains coming in the 6 months following the postponement of the original “Liberation Day” tariff announcements, which knocked the market down double-digits in 5 trading days, before the administration reversed course and postponed the tariffs.
Monthly Highlights
The Federal Reserve cut interest rates for a third time
Russia and Ukraine are still negotiating for a truce to end the war
Paramount and Netflix are competing over who will take over Warner Brothers studios
News in Review
The Federal Reserve cut interest rates for a third time this year, although two governors favored leaving rates unchanged, while one governor wanted a 0.50% reduction instead of the 0.25%, which was agreed on by the rest of the committee. Heading into 2026, the Fed noted that they were now on the “high end of the range of neutral”, meaning that they could cut in the future, but were likely close to their stopping point given the current state of the economy.
The U.S. Offers Ukraine a 15-year Security Gurantee
According to Ukrainian president Zelenskyy, the US has offered a 15-year security guarantee in order to get him to agree to a peace deal with Russia. However, the two sides are still far apart on some details including Ukrainian territory that Russia has already taken over during the war.
Warner Brothers Favors Netflix Offer Over $108bn Paramount Bid
One of the biggest traditional studios and the largest streaming company in the world are fighting over Warner Brothers, home to Harry Potter, the Friends TV show and thousands of other well-known movies and TV shows. Paramount has agreed to take over all of Warner Brothers – including its studio, library of content, streaming platform and traditional TV networks (CNN, TNT, etc.), while Netflix is interested in everything except the traditional TV networks. The takeover fight is expected to take months before a winner is ultimately decided.
Last US Pennies Sold at Auction for $16.76 million
Despite the claim that pennies are worth less than the metal they are printed on, the last 232 three-coin sets produced by the U.S. Mint sold for over $16 million at auction. The last set, which contains the last three pennies ever made, was sold for $800,000 and included the three dies that struck those last few cents.
DISCLOSURES
Securities offered through LPL Financial, Member FINRA/SIPC. All investment advice is offered through Independent Advisor Alliance, LLC, a registered investment adviser. Independent Advisor Alliance, LLC is a separate entity from LPL Financial. The opinions expressed in this material do not necessarily reflect the views of LPL Financial.
This newsletter was written and produced by the Independent Advisor Alliance, LLC. Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. The views stated in this letter should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice.
Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results.
S&P 500 INDEX: The Standard & Poor's 500 Index is an unmanaged, capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
NASDAQ 100 INDEX: The Nasdaq 100 Index is an unmanaged, capitalization-weighted index of the largest 100 non-financial stocks traded on the Nasdaq market. Unlike the S&P 500 it does not represent all major industries and may be more volatile than more broadly constructed indices.
MSCI ACWI INDEX: The MSCI ACWI captures large- and mid-cap representation across 23 developed markets (DM) and 24 emerging markets (EM) countries. With 2,495 constituents, the index covers approximately 85% of the global investable equity opportunity set.
Bloomberg U.S. Aggregate Bond Index: The Bloomberg U.S. Aggregate Bond Index is a broad-based index of the U.S. investment-grade, fixed-rate bond market, including both government-related and corporate securities and mortgage- backed and asset-backed securities.
Indexes are unmanaged and cannot be invested into directly. All performance referenced is historical and is no guarantee of future results.
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