Weekly Recap:

by Michael Reinking, CFA & Eric Criscuolo

Published on 11/21/25

Last week we worked in references to Yankee Hall of Famer Yogi Berra and a (poorly) AI-generated Darth Vader to describe the rhyming and perhaps repeating price action in equites. The condensed version: It was “déjà vu all over again” as the Dip Buying was Strong in this market. This was in reference to the S&P 500’s ability to hold the 50-day moving average and rally on Fridays to close out the prior two weeks. It was occurring in an environment where the main support for the equity markets- anything attached to AI- was wobbling under greater scrutiny of the economic model, questions about giant financings, and comments from company executives, all creating an expanding “AI Bubble” narrative. That extended to a rotation out of high momentum and riskier areas of the equity market. The MSCI Momentum ETF had fallen 5% since the week of Halloween. It was much worse in more specific areas. Components in a basket of Quantum Computing names we track were down 30-50% over the past month. A basket of Rare Earth names were down similarly. How about nuclear? Down 5-50%.

About that déjà vu...Last Friday’s rally didn’t carry over to Monday, and it felt like, THIS TIME it’s different, we swear. The support at the 50-day gave way, and the S&P closed below it to end a six-plus month streak. The VIX moved higher, continuing a move that began last week. There was apprehension across markets, in anticipation of…something. In a crazy coincidence, this was Nvidia’s week to report earnings.

Maybe there was some concern heading into the print, but I think we got what was really expected- beats and raises, incredible growth and management’s confidence reaching interstellar space. If you were looking for any signs that AI investment was slowing down, you had to look elsewhere (although the revenue circularity and related concerns remain). Nvidia opened up 5% the day after the report and the rest of the AI complex saw similar strength initially. The S&P 500 and Russell 2000 were up over 1% and the S&P traded back above the 50-day early in the trading session. With the weakness coming into the event, that initial move, a sigh of relief, was the easy part. Holding on to those gains, like saving room for Thanksgiving dessert, would be the hard part. The expiration of VIX and equity options around Nvidia’s report added even more positioning and hedging commotion that could drive price moves.

Instead of the action we were conditioned to- dips being bought- the move back above the 50-day was sold as the index hit its 20-day average. Nvidia finished down 3%. Not only did the S&P end below the 50-day, but it also closed below support (barely) at the 100-day moving average for the first time since early May. It was the fifth decline in six days. The size of the reversal was historic. According the Bespoke, it was just the 4th time in the SPY ETF’s history that it opened up more than 1.5% and then closed down more than 1.5%. The other days: in 2008 during the financial crisis (2x) and the April 8 Tariff shock.

But all of that happened on Thursday. We still had Friday to navigate. A decisive move to shatter support at the 100-day? A brave charge to reclaim it? S&P futures traded lower, but the index opened just above the 100-day, then fell below it. However, like Nuke Laloosh in Bull Durham, Buy the Dippers announced their presence with authority.

The index rallied, cleared the 100-day, then 6600, though finished off the highs. This wasn’t a tech-lead rally either. The sector was flat. The equal-weight was up 2%, doubling up the cap-weighted standard. Small caps were even better as the Russell 2000 and S&P 600 rose 3%, both with big moves off their lows.

While coming up with root causes for market moves can sometimes (usually?) be an exercise in storytelling versus hard science, futures jumped right when NY Fed President Williams delivered remarks that included his view that there’s room for a near-term rate cut. That gave markets some respite from what has been hawkish-leaning Fed Speak and comes from one of the most influential voices at the Fed, just ahead of the next FOMC meeting. We hope Nick Timiraos’ role as Fed Whisperer is not in jeopardy. 

Healthcare led on Friday, continuing its strong run. The sector has now caught up with the S&P 500 YTD. Materials was a co-leader, led by the major chemicals names, which have been some of the biggest underperformers this year. It’s a sector that has also lagged but, unlike Healthcare, has not seen a catch-up trade. Comm Services’ strength was driven by Alphabet, and Media/Advertising names were also strong.

For the week, Tech was the big underperformer. Beyond the weakness in semis, software names were also sold. Energy and Discretionary were weak. Crude and nat gas were under pressure on Ukraine peace prospects, taking Energy lower. Discretionary gained 2% on Friday but was down 3% for the week. Travel and Leisure was mixed while Amazon fell 6%, weighing on the sector.

Comm Services was the outperformer this week as Alphabet added 8%. The company continues to see a re-rating as the existential threat to its search business from AI gets further in the rear-view. Healthcare was another outperformer.  The sector saw strength across groups and Eli Lilly is closing in on a trillion dollar market cap.

So where are we now? The S&P closed at 6603, 4% off its all-time highs. The 100-day held as support ~6550. The 50-day is about 100 points overhead at ~6710. Regarding liquidity and financial conditions, the next Fed rate decision is approaching, with expectations jumping around. It’s interesting that despite equities rallying on Friday with small caps leading, crypto continued to face a barrage of selling, although Bitcoin did bounce well off its lows. Business Development Companies, under pressure due to broad credit concerns, posted solid gains on Friday The Treasury has not really started to draw down its TGA balance. When that kicks in it’s likely a tailwind. Economically, nothing is really standing out either way and the labor market is not great but not collapsing. Federal data is rolling out but it will be messy for a while until collection and distribution normalize. The US Dollar should be watched closely for a return of the “Wrecking Ball” dynamics that can trigger liquidity strains across global markets.

With the government shutdown in the rear view (for now) this week we started to get some of the delayed economic data and clarity about the timing of future releases. The problem is the data we are getting is from September, which seems like a life-time ago, much of the October data either won’t be collected or will be combined the November data and that won’t come until after the December Fed Meeting. Below is the updated schedule from the BLS.

The employment data was the most important this week. Before moving on to some of the more recent data let’s start with the September BLS Employment Report. After falling 4k in August, 119k jobs were added to the economy ahead of expectations. This was driven by healthcare/social assistance and leisure/hospitality while there were declines in transportation/warehousing and manufacturing. The household survey also showed an increase of 251k jobs but there were negative revisions and the increase in labor force (470k) caused the unemployment rate to tick up to 4.4%. The wages data ticked down to 0.2% from 0.4% while the workweek held steady at 34.2.

ADP’s Weekly Report improved from last week but still showed a decline. Jobs fell an average of 2.5k/week for the period ending November 1, versus last week’s report of an average decline of 11.3k. The Department of Labor released a couple of weeks of claims data which as of yesterday is caught up. The initial claims data showed a modest uptick in initial claims during October and subsequent moderation. For the week ending on November 15th initial claims were 220k. Continuing claims have been trending higher hitting 1.974ml, the highest level since November of 2021. Overall, the data continued to paint a similar picture as to before the shutdown, a slowing in hiring but not a labor market that was falling off a cliff.

This morning S&P Global Flash PMIs showed some modest improvement in November driven by the services sector. Chief Business Economist Chris Williamson noted the pickup in business confidence was helped by expectations for further interest rate cuts and the end of  the government shutdown. Within manufacturing firms have noted a slowdown in new orders and building inventories something to keep an eye on. Employment moderated slightly with firms highlighting budget-related cuts. The prices components increased by the second fastest rate in the last three years behind only May driven by a jump in services input prices. Sticking with the inflation for a moment, final 1/5 yr inflation expectations within the U of Mich Sentiment survey were revised lower by 0.2% to 4.5% and 3.4%, respectively. 

Throughout this week we continued to hear the varying opinions of Fed officials including comments from some that had voted in favor of an October cut that had preferred to hold pat. The FOMC minutes were also released also highlighted the divide. “Several participants assessed that a further lowering of the target range for the federal funds rate could well be appropriate in December if the economy evolved about as they expected over the coming intermeeting period. Many participants suggested that, under their economic outlooks, it would likely be appropriate to keep the target range unchanged for the rest of the year”. Nick Timiraos reminded us that the Fed had put out a legend for navigating these documents back in 2017 (see below). Many is greater than several so the December meeting will be a close call. On Wednesday after the FOMC Minutes were released and the BLS announced that the October/November Employment report wouldn’t be released until after the Fed meeting the probability for a cut shifted down to 1/3 from a little better than a coin flip. 

Those probabilities flipped back after comments from NY Fed President Williams, author of the Fed’s Thesaurus (a reference for very long-time readers), he also had a hand in the above legend. This wasn’t necessarily a new revelation from him but took on extra weight as he is a member of the Fed Troika (Chair, Vice Chair and NY Fed President) and one of the respected voices of the Committee known for his measured communication.

For the week yields are down ~10bps across the curve testing the low-end of the range since Chair Powell warned that the December decision was far from a foregone conclusion. The Dollar strengthened, especially against the Yen, though it pulled back on Friday as Japan FX intervention talk increased.

Next week will be a short one. Not only will markets be closed Thursday for Thanksgiving, but Friday will be a half day with equity markets closing at 1pm. Parades and NFL games should bring some joy, unless your team gets throttled. Be on the lookout for Santa to make his first appearance of the year and usher in Black Friday. The MSCI quarterly rebalance will be on Monday. We’ll get employment data from the new, weekly ADP employment report and the official weekly jobless claims. PPI data for September will released, but this is very old data that was delayed due to the shutdown, and likely won’t have much impact. Other data will include Pending Home Sales, some Regional Fed manufacturing surveys, the revised GDP estimate and the latest Fed Beige Book. The Beige Book provides anecdotal information on economic conditions in each of the Fed Districts and will be leaned on by Fed officials, especially given the wacky status of the federal data. Best Buy, Dell, HP and Deere will provide some of the more prominent earnings results. The Supreme Court’s decision on the tariff case could come at any moment but it looks like most experts, of which I am not, expect the decision to come closer to year-end, at the earliest. Enjoy your weekend!   

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