And though it’s happened so often of late that it seems almost anticlimactic, the S&P 500 and Dow both closed the week by notching new nominal highs. In fact, the Dow fl irted with 18,000, and both indexes are in the midst of a seven-week winning streak. For those keeping score, the Dow has now posted a record high 34 times in 2014, while the S&P 500 has turned the trick 49 times.

Going into Friday, the expectation had been that about 225,000 jobs would be added, and the actual total represented the best month since January 2012 as America is heading for the biggest year of job creation since 1999. And that wasn’t the end of the good news as hourly wages were up 0.4%, double the forecast. The unemployment rate based on the household survey remained unchanged at 5.8%, as did the labor force participation rate at 62.8%. As a bonus, most analysts said that the growth, while solid, is not enough to alter the Federal Reserve’s timetable for raising its benchmark rate in the middle of next year, especially as the rate of infl ation remains stubbornly low.

The report was just the latest sign of a sustained turnaround, joining the recent improvement in GDP growth – the second and third quarters added up to the best six-month run in a decade – a shrinking defi cit, cheap gas and even lower healthcare expenses. As The Wall Street Journal noted, the “buoyant jobs

report put a coda on the most promising month for the economy in years.”

Next steps for Congress?As a result, there was even

democrats in the midterm elections and too early to count as a Christmas present, but Friday’s unemployment report, which saw the economy adding 321,000 jobs in November, was widely seen as a turning point for the American economy, especially since – or despite the fact that – the rest of the world is slowing down.

The story came too late to help the

MARKET COMMENTARYFOR THE WEEK OF DECEMBER 8, 2014

Key Market DataWeek ending… 11/28/2014 12/5/2014 Change

S&P 500 Index 2,067.56 2,075.37 +0.38%

MSCI EAFE Index 1,839.73 1,832.11 -0.41%

BarCap U.S. Aggregate Bond Index

1,912.87 1,902.92 -0.52%

10-Year Treasury Note Rate

2.169% 2.306% +13.7 basis pts.

Trending

• Vehicle sales jumped 4.6%

• Average hourly earnings climbed 0.4%

• Infl ation in Russia hit 9.1%

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hope in some quarters that next year Congress would have the fi scal fl exibility to balance the budget and overhaul the tax code, among other long-deferred initiatives. Of course, Congress has one issue to contend with right away: the fact that the government needs to be funded by Dec. 11. House republicans, irate over the president’s executive order regarding immigration, are pushing for a shutdown, but Speaker John Boehner (R, Ohio) is trying to avoid going into the new year by alienating Americans. Instead, he’s proposing a compromise that funds the government through the end of the fi scal year but withholds some of the money earmarked for immigration enforcement, a package that may also include a symbolic slap at the president by attempting to revoke the immigration order, which would not make it to the Senate fl oor.

Russia’s woesIf the American economy has fi nally turned the corner, Russia’s is headed sharply in the other direction, clobbered by the lower price of oil, which accounts for the lion’s share of Russia’s export income, and sanctions because of its aggression in Ukraine. The ruble, meanwhile, has fallen nearly 40% against the dollar this year, and infl ation is 9%, not to mention the fact that Russian corporations owe $650 billion to Western banks. Last week, the government announced that Russia is entering its fi rst recession since 2009, with an offi cial estimate of GDP shrinking 0.8% in 2015 (independent analysts are estimating a 2-to-3% contraction).

The ECB and BOE stand patThe European Central Bank and the Bank of England both voted to maintain their record low benchmark rates of 0.05% and 0.5%, respectively. Addressing low infl ation, the ECB’s President Mario Draghi said, “We have a mandate. We don’t tolerate prolonged deviations from our mandate.” However, it’s been two years since infl ation hit the target of 2%, and the annual rate fell to 0.3% in November. Once again, there were assurances by Mr. Draghi of the bank’s “commitment to using unconventional instruments,” but no action was taken, sending European stock indexes down.

The holiday sales score sheetThough analysts diff ered as to the cause, the National Retail Federation’s estimate for the four-day holiday weekend was down 11% from last year to $50.9 billion. The culprits were variously seen as pre-season buying, online shopping to avoid lines (sales on Cyber Monday were up 8%) and not a lot of disposable income.

Automakers get an early Christmas presentOne place where there was no holiday slowdown was auto sales, with manufacturers reporting one of the best Novembers in years as 1.3 million vehicles were sold, up 4.6% from a year earlier, according to Autodata. The annualized rate of 17.2 million was the highest in a decade, and the industry is on track for its best year since 2007. In other news, the Institute for Supply Management said its manufacturing index fell to 58.7 in November after having hit a three-year high of 59 in October, while its service sector index rose to 59.3 from 57.1. The Commerce Department announced that the trade gap fell 0.4% to $43.43 billion in October. The government also reported that construction spending improved 1.1% in October to a seasonally adjusted annual rate of $971 billion, the biggest increase since May, as spending on single-family homes, the largest sector, gained 1.8%. Lastly, fi rst-time jobless claims dipped 17,000 to 297,000, while the four-week moving average was up 4,750 to 299,000.

A look aheadThis week members of Congress will maneuver over funding the government and, presumably, avoid a shutdown going into the holiday season. There will also be economic updates on small business optimism, wholesale and retail inventories, retail sales, the producer price index and consumer confi dence.

MARKET COMMENTARY FOR THE WEEK OF DECEMBER 8, 2014

Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company, Milwaukee,

WI (NM) (life and disability insurance, annuities) and its subsidiaries. Northwestern Mutual Wealth Management

Company®, Milwaukee, WI, (investment management, trust services, and fee-based fi nancial planning) subsidiary

of NM, limited purpose federal savings bank. Northwestern Mutual Investment Services, LLC, (securities)

subsidiary of NM, broker-dealer, registered investment adviser, member FINRA and SIPC.

The opinions expressed are those of Northwestern Mutual as of the date stated on this report and are subject

to change. There is no guarantee that the forecasts made will come to pass. This material does not constitute

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Indexes and/or benchmarks are unmanaged and cannot be invested in directly. Returns represent past

performance, are not a guarantee of future performance and are not indicative of any specifi c investment.

Diversifi cation and strategic asset allocation do not assure profi t or protect against loss. Although stocks have

historically outperformed bonds, they also have historically been more volatile. Investors should carefully consider

MARKET COMMENTARY FOR THE WEEK OF DECEMBER 8, 2014

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their ability to invest during volatile periods in the market. The securities of small capitalization companies are

subject to higher volatility than larger, more established companies and may be less liquid. With fi xed income

securities, such as bonds, interest rates and bond prices tend to move in opposite directions. When interest rates

fall, bond prices typically rise and conversely when interest rates rise, bond prices typically fall. This also holds true

for bond mutual funds. When interest rates are at low levels there is risk that a sustained rise in interest rates may

cause losses to the price of bonds or market value of bond funds that you own. At maturity, however, the issuer

of the bond is obligated to return the principal to the investor. The longer the maturity of a bond or of bonds held

in a bond fund, the greater the degree of a price or market value change resulting from a change in interest rates

(also known as duration risk). Bond funds continuously replace the bonds they hold as they mature and thus do not

usually have maturity dates, and are not obligated to return the investor’s principal. Additionally, high yield bonds

and bond funds that invest in high yield bonds present greater credit risk than investment grade bonds. Bond and

bond fund investors should carefully consider risks such as: interest rate risk, credit risk, liquidity risk and infl ation

risk before investing in a particular bond or bond fund.

All index references and performance calculations are based on information provided through Bloomberg.

Bloomberg is a provider of real-time and archived fi nancial and market data, pricing, trading, analytics and news.

Standard and Poor’s 500 Index® (S&P 500®) is a capitalization-weighted index of 500 stocks. The index is designed

to measure performance of the broad domestic economy through changes in the aggregate market value of 500

stocks representing all major industries.

Standard & Poor’s off ers sector indices on the S&P 500 based upon the Global Industry Classifi cation Standard

(GICS®). This standard is jointly maintained by Standard & Poor’s and MSCI. Each stock is classifi ed into one

of 10 sectors, 24 industry groups, 67 industries and 147 sub-industries according to their largest source of

revenue. Standard & Poor’s and MSCI jointly determine all classifi cations. The 10 sectors are Consumer

Discretionary, Consumer Staples, Energy, Financials, Health Care, Industrials, Information Technology, Materials,

Telecommunication Services and Utilities.

The MSCI EAFE Index measure international equity performance. It comprises the MSCI country indices that

represent developed markets outside of North America: Europe, Australasia and the Far East.

Barclays Capital US Aggregate Bond Index is a benchmark index composed of US securities in Treasury,

Government-Related, Corporate, and Securitized sectors. It includes securities that are of investment-grade quality

or better, have at least one year to maturity, and have an outstanding par value of at least $250 million.

The 10-year Treasury Note Rate is the yield on U.S. Government-issued 10-year debt.

The European Central Bank (ECB) is the institution of the European Union (EU) which administers the monetary

policy of the 17 EU eurozone member states.

The National Retail Federation is the world’s largest retail trade association. Global membership includes retailers

of all sizes, formats and channels of distribution as well as chain restaurants and industry partners from the U.S. and

more than 45 countries abroad.

Autodata Solutions, Inc. is an automotive software and data provider that provides automotive content, research,

and technology implementation services to most of the auto manufacturers who distribute vehicles in North

America, helping them develop, market and sell their products.

The Institute for Supply Management is a not-for-profi t U.S. association for the benefi t of the purchasing and supply

management profession, particularly in the areas of education and research.