After weeks of mixed signals, the data is finally telling a clearer story. Strong payrolls, rising energy strains from AI expansion, and elevated market valuations are reshaping the landscape—and creating both opportunity and risk.
US Economy
The delayed September nonfarm payrolls figures came in well above expectations. The strength may have been overstated due to the most generous seasonal factor for September on record. Job growth was concentrated in education and healthcare and in leisure and hospitality.
Initial jobless claims fell while continuing claims rose. This divergence suggests that while layoff activity is low, it is becoming more difficult for those who are unemployed to find new work.
The Atlanta Fed’s GDPNow model is now tracking Q3 GDP at 4.1%, up from 4.0% on November 6. Professional forecasters now expect slightly stronger US GDP growth in 2025–26, broadly stable unemployment, and higher inflation.
Big Tech’s AI expansion is straining power supplies …
Source: Bloomberg
… pushing companies to rely more on gas, nuclear, and other costly generation sources.
Source: Bloomberg Read full article
Americans face wide cost differences for Thanksgiving groceries, with Walmart offering the lowest average dinner price.
Source: Visual Capitalist Read full article
US Stock Market
The CNN Fear & Greed Index sank further into “extreme greed” territory. S&P 500 fell below its 50-day moving average and so did the Nasdaq Composite. Drawdowns in tech shares have exceeded 5%. Russell 2000 is below its 100-day moving average.
Source: CNN Business Read full article
Semiconductor ETFs posted their first weekly outflow in five weeks.
Source: Goldman Sachs
Over 50% of US sectors have forward P/Es above 20 times.
Source: Ian Harnett
The sheer size of Nvidia has made it a formidable driver of market returns. Within the S&P 500 Index, it commands an 8% weight, larger than five of the 11 sectors.
Nvidia’s weighting in ACWI is just as impressive, larger than that of Japan. In other words, if Nvidia were considered a country, it would rank as the second-largest in ACWI, behind only the United States.
There are now more 52-week lows than 52-week highs for both Industrials and Technology.
The Fed
The probability of a 25 bps rate cut in December has fallen below 40%. The October FOMC minutes showed the committee was divided on the December rate decision. “Many” officials preferred to hold rates steady, outnumbering the “several” who thought a reduction “could well be appropriate.”
Source: CNBC Read full article
Great Quotes
“If you look at what you have in life, you’ll always have more. If you look at what you don’t have in life, you’ll never have enough.” — Oprah Winfrey
Picture of the Week
Frosty Winter Path in Dwingelderveld, Netherlands
All content is the opinion of Brian Decker
