Market Perspectives (December 2012)
- Stocks ended the month higher, after a brief correction following the presidential election results. Domestic equities lagged international stocks in November but continue to lead on a year-to-date basis.
- The Treasury yield curve flattened in November, although returns were limited. Demand for yield helped to lift high yield bonds, keeping returns on par with equities year-to-date.
- Inflation edged up during October, as falling energy prices were more than offset by the increasing cost of food and shelter.
- Job market conditions improved again in November, beating expectations. Job creation for the month was in line with its 12-month average, while the unemployment rate unexpectedly fell to 7.7%.
- Polarization in Washington continues to make any resolution to avoid the full brunt of the fiscal cliff elusive, as the New Year rapidly approaches.
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