Global indices finished mixed last week. Large caps crept higher. Small caps lost ground. A seeming theme this year. That is, larger companies carrying the load for their smaller peers.
The average year-to-date return of the largest half of S&P 500 - by market cap -- is 4.8 percent. And the average year-to-date return of the smallest half is -5.7 percent.
More significantly, big tech companies have carried the S&P 500 this year. Apple is up 6 percent. Microsoft is up 20 percent. Amazon has rallied 115 percent. Facebook has risen 34 percent. Google climbed 45 percent. If you haven't owned these companies, your performance has likely trailed the S&P 500. Which, considering its 1.6 percent YTD gain, is less than exceptional.

A little bit more analysis helps to discern the following:
* The stock market hasn't performed as well as many think it has this year.
* Big companies are outperforming small companies.
* A small coterie of great performances by big names has elevated the S&P 500 Index this year.
* Most public companies aren't in a bull market right now.
* Market leadership is very "thin."
Bottom line? Not the dynamic one expects during healthy bull markets. Which typically enjoy widespread participation across all sectors and cap sizes. Such participation has been lacking. Doesn't mean it can't happen, sending markets to new highs. But it better occur sooner than later. Because, like a haggard old worker at the end of a long day, a weak, exhausted, thinly traded market typically wants only to lay down and roll over.
Unfortunately, the U.S. stock market is not the party's sole, weak-in-the knees, over-served patron. As global equity markets, some of which began the year so promisingly, have faltered of late.
Last week saw stocks rally on Friday's strong jobs report. Surprising, given the data's Manichean significance relating to the Fed's rate hike decision. Clearly, Fed policy has gone way past closing time. And investors, markets, the Fed, and every patron therein has been over served. Left to leave the saloon and wonder the streets of uncertainty. Trying to determine if it's time to go home, or if this afterhours party still has legs.
Though Janet Yellen was handed an unfinished script, the public has, for the most part, continued to put its faith in the institution she heads. Even as the final determination on her momentous decision likely comes down to little more than a coin flip.
For better or worse, we'll know everything we need to by December 16th. Nor would I choose to be in Yellen's shoes. As the economic data certainly reveals the clouded validity of a decision in either direction.
Leaving us to hope, Mrs. Yellen, that the force is with you. Because not much else seems to be.
The ISM manufacturing index dropped into contraction territory for the first time since 2012. Not the holiday news we hoped for. Representing the weakest result since June 2009.
Specifically, the index fell to 48.6 in November from 50.1 in October. Well below the 50.5 reading expected. Of course, the 50.0 level demarcates month-over-month expansion vs. contraction. New orders fell four points to 48.9 while production dropped 3.7 points to 49.2.
Following the ISM index news, the GDPNow forecast at the Atlanta Fed dropped to 1.4% from 1.8% annualized. In a normal world? We'd be looking forward to Fed interest rate cuts in such an environment. As opposed to the widely anticipated rate hikes.
While everyone expects a December 16 hike, you have to wonder whether this is really the time to enact growth-hindering measures. Especially as poor demand at home and abroad continue to tamp down inflation.
In the energy markets, OPEC decided not to cut production at its Friday meeting. Causing oil prices to sink to seven-year lows. Without OPEC production cuts, prices will remain under pressure as Iranian production begins to hit international markets.
Leading energy stocks sold off. Especially some of the MLP plays like Kinder Morgan (KMI). ExxonMobil, Chevron, Devon Energy and EOG resources also sank. Though some of the SMID cap exploration and production stocks - like our former favorite Matador Resources - have held up rather well this past year. Posting a 4.25 percent year-to-date gain.
Finally, a truly somber note.
The world was again rendered aghast last week, as the plenipotentiaries of terror struck in Southern California. Pledging fealty to ISIS. Dropping a child off with grandparents. Donning tactical assault weapons and then wreaking havoc upon colleagues during the office holiday party. The decision to target the male terrorist's own workplace? Chilling in its simplicity and lack of sentiment.
More information will come of this. For these perpetrators did not act alone. How else does $28,000 suddenly appear in the bank accounts of a modestly-paid civil servant? How did they accumulate the arsenal leading up to the attack? Who trained them? And where?
14 innocents killed. Many more injured. Another sobering reminder as to this macabre, inhuman death cult born from the womb of Wahhabi Islam. The West may continue to wallow in indecision for as long as it so chooses. Refusing to call this what it is. Serving to make this war even more asymmetric. Rendering none of us any safer. And all the while, emboldening our enemies to ever more callous feats of savagery.
Weekly Results
Major markets finished mixed last week. The DJIA fell 0.14%, the S&P 500 rose 0.04%, and the Nasdaq added 0.44%. Small cap stocks gained 2.32%. And the 10-year Treasury bond yield fell 4 basis points to 2.22%. Gold lost $19.90 per ounce, or -1.85%.