Weekly Recap:

by Michael Reinking, CFA & Eric Criscuolo

Published on 11/14/25

To use an old Yogi-ism “it’s déjà vu all over again”. Last week AI optimism flipped to AI skepticism. In addition, the varying views on the Federal Reserve were on full display raising some questions about the path of monetary policy going forward. Equities pulled back throughout the week and it was an ugly start to the Friday session. The S&P 500 broke below its 50d ma for the first time since it was reclaimed in the aftermath of the Tariff Turmoil. However, the buy the dip impulse remained strong with traders defending key technical levels. The S&P 500 rallied nearly 1.5% off the session lows to finish the day around unchanged, keeping the streak of closes above the 50d intact.

As this week began, that Friday rally extended to the upside. There was finally some movement in government shutdown negotiations over the weekend and President Trump floated the idea of a tariff dividend, sending some of the more speculative risk assets higher again. The record government shutdown officially ended on Wednesday evening, ironically also marking the high for equities this week. Otherwise, the primary topics were the same as last week.

Major indices continued to move higher in the front half of the week with the S&P 500 trading all the way back up to ~6,850, filling last week’s Michael Burry/Wall Street CEO warning-induced gap. However, amidst that rally there seemed to be a change in character in the market. The AI theme was under pressure again with some mixed headlines adding to growing concerns and the other thematic favs were unwinding in a fashion just as aggressive as they had gone up a couple of weeks ago. Investors seemed to be moving up the “quality” scale favoring large cap over small, value over growth and profits versus the promise of the future. To highlight this shift, on Wednesday the Dow Jones Industrial Average traded >48k for the first time.

Yesterday, major indices fell >1.5% as the weakness broadened out, but it was still tech and the MOMO stocks that bore the brunt of the selling. That leads us to this morning and just like last Friday S&P futures were down >1% and crypto was breaking to fresh lows ahead of the open. Once again, the buy-the-dip bid emerged and the S&P 500 held above last Friday’s low (~6,630) eventually rallying nearly 2% intraday to end the session around flat, though off its highs. The rally helped the index avoid back-to-back weekly losses but small and mid-cap indices ended the week in the red.

Healthcare and energy have now been the best two performing sectors in back-to-back weeks. The healthcare sector was up 4% this week, significantly narrowing the YTD underperformance. Biotech continued its recent strength after another big M&A transaction (Merck buying CDTX for ~$9B). Pharma and healthcare equipment stocks continued to move higher while managed care and hospital stocks underperformed as ACA subsidies were not part of the deal to re-open the government. Energy and materials stocks both moved higher despite a volatile week in the commodities complex.

Mega-cap, tech-heavy sectors underperformed this week. Consumer discretionary was down >2%. Tesla and Amazon did much of the damage but there was also some weakness in housing and travel related names while there was some outperformance in apparel and restaurants. Comm Services  was down ~1%.

Despite the AI anxiety Tech managed to end the week slightly higher. Both AMD and Cisco raised guidance this week, highlighting very strong demand. However, CoreWeave (>-20% for the week), a neo data center operator, lowered Q4 revenue guidance after construction and permitting delays at a third-party developer. Management’s commentary about the environment failed to ease concerns. There were also some negative articles reminding investors of the bottlenecks in bringing this capacity online (The Hill, FT).

For some time investors have been drawing parallels to the late 1990’s. One of the primary arguments against that was the source of funding being cash flow as opposed to debt. That dynamic has started to shift over the last couple of months, and you can see the increasing concern in the below chart -  5yr CDS for CoreWeave, Oracle and Microsoft. Markets tend to go through boom-and-bust phases but it’s not always a binary outcome, the truth usually lies somewhere in-between. I think much of the weakness that we’ve seen is a resetting of stretched positioning as the rubber band got stretched too far. It's too early to make any definitive declarations about the investment cycle but unfortunately, I think we're going to be trapped in the ebb and flow of this debate for the foreseeable future. 

With the government back to business, we got several updates on when some of the federal data would be released.

This will likely not be a smooth transition, like simply flipping a switch. The next few data releases for most of the government series' will probably be messy and/or confusing, not only in what the actual data says, but in how much the market, and the Fed, discounts the "old" data.  

There was a good amount of Fed Speak this week and it was hawkish in totality and underscored the internal division at the Fed. The WSJ’s Fed Whisperer Nick Timiraos had an article highlighting the divide on the FOMC. He suggested one option is “pairing a December cut with guidance that sets a higher bar for further reductions”. Markets repriced rate cuts this week, moving the odds that the Fed holds steady at the next meeting in December up to 54% from 33% a week ago.

SF Fed President Mary Daly wrote in a blog post that, despite a remarkably resilient US economy, the balance of risks has clearly shifted with rapid softening in the labor market. She noted that we’re likely experiencing a negative demand shock for labor that happens to coincide with falling supply of workers. On inflation, she discussed that tariff effects are largely confined to goods and not spilling over into services or raising expectations. Overall, she drew parallels to prior decades, “we don’t want to work so hard to not be in the 1970’s (reigniting inflation) that we cut off the possibility of the 1990’s (igniting growth).

Boston Fed President Collins discussed the "high bar" for further cuts in her comments this week and, though supporting the 25bp cut at the last meeting, thought the Fed should keep rates "at the current level for some time." St. Louis Fed President Musalem was hawkish, expecting a bump in growth in Q1 and stating “ we need to lean against inflation,” with limited room for further easing. Meanwhile Governor Miran reiterated his call for further cuts. While he said that all-else equal he would want a 50bp cut at the next meeting, he added a slight caveat of “at least 25bp”. NY Fed President Williams focused more on the balance sheet, reiterating his comments that “it will not be long before we reach ample reserves”, which would then trigger the process of gradual purchases of assets. Treasury Secretary Bessent spoke at the same conference as Williams, reiterating Treasury’s guidance that coupon auction sizes will likely not change for the next several quarters. He also gave his support to changes in the SLR that could boost treasury demand.

Atlanta Fed President Raphael Bostic announced he'll be retiring at the end of February next year, after his five-year term ends. The Atlanta Fed's board will need to appoint a successor, which will then need to be ratified by the Federal Reserve's Board of Governors, and that could be contentious given all the Fed drama that remains to be addressed.   

As far as data, ADP released its new, weekly employment report which showed private employers shed 11.25k jobs/week in the four weeks ending 10/25. That’s a reversal from the last weekly report on 10/28 that showed employers added 14.25k/week in the four weeks ending 10/11. The ADP monthly report last week was also somewhat positive, showing 42k jobs were added in October (the weekly isn’t published when the monthly is). This points to a rather precipitous drop in the later part of October when comparing the weekly to the monthly data, and it's still somewhat confusing as to how the math lines up to square the two reports.  

The NFIB Small Business survey declined in October. The Uncertainty Index fell to its lowest level since December 2024. Actual Earnings declined (last 3 months vs. prior three) but prices were relatively stable, as were employment metrics. Labor quality remains the biggest issue for employers and reached the highest level since November 2021.

Treasury yields finished ~5bp higher across the curve. Yields fell on Tuesday when, with the bond market closed for Veterans Day, Treasury futures dropped on the weak ADP weekly jobs report. However, hawkish Fed Speak helped push yields back up. Fed rate cut expectations for December repriced lower, from 67% a week ago to below 50% currently.

The US Dollar Index ended the week slightly lower and has reversed most of the recent move from 98.50 to 100. The yen weakened while the Euro and Swiss Franc strengthened.  

Nvidia may generate some attention with its earnings report. Major retailers including Target, Lowes, Home Depot and Walmart will also report, as well as Med Device bell weather Medtronic. FOMC minutes for the October meeting will be published and closely read as the rate decision becomes murkier. The federal government is reopened but honestly it's been kind of nice not having to track dozens of data releases these past few weeks. We noted federal data that could be released with an asterisk in the calendar below. Major confirmed releases discussed above, like PCE, will happen the week of 11/24.  The September monthly jobs report will be published on Thursday, however, giving us something to read in between updates to our Thanksgiving shopping list. Have a great weekend.       

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