WP Weekly Insight (11/8 - 11/14)

Market Recap & Snapshot[1]

• Monday, November 10: The Nasdaq Composite bounced back from its worst week since April as stocks rallied broadly on Monday on news that the government shutdown was finally coming to a conclusion. The Nasdaq was up 2.3% for the day, and the S&P 500 added 1.5%. The MSCI Asia Pacific Index climbed 1% to kick off the global trading week.

• Tuesday, November 11: The bond market and banks were closed for Veterans Day—a heartfelt “thank you” to all who have served! The stock market rebound rally stalled as the S&P closed up 0.2% while the tech-heavy Nasdaq slid 0.3%.

• Thursday, November 13: The S&P 500 dropped 1.7% on and the Nasdaq slid 2.3% as the government reopening rally proved ephemeral. Market-leading megacap tech stocks sold off, and the market remained concerned about the prospect of another Fed interest rate cut in December, given the absence of economic data during the shutdown.

• Friday, November 14: Stocks looked to continue their selloff in the early part of the trading period, but dip buyers had the major indexes rally back to finish nearly flat by the end of the day.

• Volatility aside, the S&P 500 was up 0.1% for the week and was just 2.3% off its all-time high. The index has climbed 33% since April 8 and has not experienced a pullback of 5% or greater during that time, as volatility has remained subdued.

• The 10-year Treasury yield advanced six basis points on the week to 4.15%. Bond prices and yields move in inverse directions.

Fiscal Policy

• Eight centrist Democrats broke ranks to support a deal to end the longest-ever federal government shutdown, conceding their fight to incorporate an Obamacare subsidy extension. The Senate voted 60-40 (the minimum required to bypass the filibuster) on Sunday evening to advance the spending bill.

• House Speaker Mike Johnson called on Representatives, who had been on an extended vacation since September 19, to return to Washington within 48 hours. The House voted to pass the spending measure by a vote of 222-209, sending it to President Trump’s desk for his signature and thus ending the longest-ever shutdown in US history at 43 days.

• The temporary spending measure funds most of the government through January 30 and some agencies through September 30. So, if we’re lucky, we can run this back before the Holiday hangover wears off!

• As part of the deal, Senate Republicans promised to vote in December on whether to extend Affordable Care Act (ACA) subsidies. About 90% of the 24.3 million people whose ACA plan premiums are covered by the subsidies face a steep cost increase in 2026 without them.Millions may opt out of health insurance altogether rather than foot the bill. President Trump, for his part, has floated the idea of paying Americans directly to cover healthcare costs rather than subsidizing the insurance market.

• Meanwhile, the nation’s airports remained a veritable hell-on-Earth as thousands more flights were either delayed or canceled. Experts warned that the snarl could drag on for at least another three to five days after reopening.

• The Trump administration introduced an idea to create 50-year mortgages in an effort to address the housing affordability crisis. While this would reduce monthly payments, it could double the total interest paid over the life of the mortgage (not that many folks stay in the same house for 50 years) and would hinder the pace at which homeowners build equity in what is likely their largest investment. It also does not address the issue of down payments, which present the largest obstacle to homeownership for many, particularly in high-cost states like California.

• In response to consumer complaints about the rising cost of staple items, President Trump issued an order on Friday reducing tariffs on beef, tomatoes, coffee, and bananas. This appears to WP to be a tacit admission that tariffs do cause inflation, at least for certain goods.

The Fog of [Trade] War

• President Trump teased a $2,000 “tariff dividend” to every American, barring “high-income people.”[2] At a projected one-time cost of $600 billion, the gesture would dwarf the $100 billion-plus that tariffs have raised so far. So much for tariff revenue helping to close the deficit?[3]

• President Trump indicated that the US was nearing a trade deal with India. Earlier this year, the US imposed tariffs of 50% on many Indian goods, in part to pressure Narendra Modi’s government to stop buying Russian oil and hence help to fund Vladimir Putin’s war in Ukraine.

• The US Commerce Department announced a 92% antidumping duty on 13 Italian pasta companies. Add the existing 15% tariff on EU imports, and pasta makers are facing combined duties of 107%, too steep for many to justify participating in the US market. Without some sort of agreement between Washington and Rome, you might find your local grocery store’s pasta aisle bare as soon as January.[4]

• The US and Switzerland struck a trade deal that reduced tariffs on the latter to 15% from the previous 39%, which had been the highest imposed on any developed country. The Swiss committed to investing $200 billion in the US over the remainder of Trump’s term. Feel free to load up on chocolate and Rolexes for the holidays, everyone!

Economic Data

• An end to the federal government shutdown should result in a deluge of economic data in the coming weeks as backlogged jobs, inflation, and GDP readings are belatedly reported. September’s data should arrive quickly, but the October and November reports may not arrive before the Federal Reserve’s December 9-10 meeting. (The White House even went so far as to say that October’s jobs and inflation data may never be released.) Information overload could beget market volatility as participants attempt to digest the data dump and anticipate the Fed’s next move. The odds of another 25-basis-point rate cut in December are sitting at roughly 50/50 amid the dearth of data.[5]

• The Congressional Budget Office (CBO) estimated that the shutdown shaved 1.5 percentage points off GDP growth for Q4. Much, but not all, of this growth could be recouped in the first half of 2026.

• Meanwhile, layoffs keep piling up at America, Inc. Verizon announced that it plans to cut 15,000 jobs, or 15% of its payroll, to deliver on its CEO’s pledge to slash costs.[6] This follows the Challenger Report released last week that placed October’s layoffs at over 150,000, the highest monthly total dating back to the depths of the Global Financial Crisis in the fourth quarter of 2008.[7]

• Data for the euro zone showed Q3 economic growth of a meager 0.2%, with countries representing almost half the currency bloc’s GDP recording no growth or worse. Germany and Italy, the continent’s largest and third-largest economies, respectively, are mired in stagnation.[8] Apparently, the fiscal stimulus measures that were cheered earlier this year have yet to take effect.

• In what could portend developing cracks in a stagnant housing market, foreclosure starts, which are the initial phase of the process, rose 6% for the month and were 20% higher than the year before. Completed foreclosures, the final phase, jumped 32% year over year. Still, less than 0.5% of mortgages are in foreclosure, versus historical averages in the 1.0-1.5% range and a rate of 4% at the peak of the Great Recession.[9]

Central Bank Watch

• Based on their public comments (given that no one has any data), Fed officials appear starkly divided on whether to continue cutting rates at their December 9-10 meeting. The labor market is exhibiting signs of early stress, while inflation, as of the last read in September, has been hovering at around 3% for most of the year. Maintaining the current restrictive policy risks accelerating a growth slowdown, whereas moving too quickly on interest rates before the job is finished risks reigniting inflation.

A)simov (I)saac

• Valuation concerns may be the leading culprit in the pullback in tech shares since the end of October, over which time the Nasdaq Composite has given back roughly 4.5%. The average forward P/E ratio of selected hyperscalers and big AI names (Alphabet, Amazon, Meta Platforms, Microsoft, Nvidia, and Oracle) is 31, close to double the average forward P/E ratio of 17 for S&P 500 index constituents as a whole.¹

• Big Tech is in a FOMO-driven arms race, with almost every company (sans Apple) investing as much as possible, as quickly as possible, in compute.

• The primary difference between this period of exuberance and the early-2000s dot-com bubble is the fact that Big Tech is actually minting money in the form of free cash flow generation. Eyes might be bigger than stomachs, however, as some, including Oracle and Meta Platforms, are starting to turn to the bond market to raise additional cash to invest.

• One foreseeable chokepoint is the amount of electricity demand that will be generated by all of the planned new data centers. Stress on the electrical grid will quickly test capacity and seems almost certain to raise utility prices for everyday Americans. It seems doubtful to WP that the infrastructure buildout can possibly keep pace with Big Tech’s insatiable drive to keep pushing the limits of AI. Buying land, building data centers, and then powering data centers will be a process that will take years and years. The spending race among Big Tech may be going on right now, but the timing and amount of the return on their investments is far from certain.

Corporate Earnings & Stocks in the News

• In spite of the fact that 82% of S&P 500 companies have beaten earnings estimates in Q3, the index is up just 1.4% since the big banks kicked off earnings season on October 14. Lofty valuations have set the bar higher, and market expectations have grown as stocks have continued to notch new record highs.

• Peter Oppenheimer, chief global equity strategist at Goldman Sachs Research, is relatively upbeat on the prospects for stock investors over the next decade in spite of elevated valuations. “Earnings growth remains the primary engine of performance,” Oppenheimer wrote in his team’s report. “We expect global earnings—including buybacks—to compound at roughly 6% annually. Dividends are forecast to provide the rest of the return, while Goldman Sachs Research predicts that stock valuations will ease modestly from their current highs.”[10] Oppenheimer and crew are particularly bullish on Asian equities and emphasized that the long-term benefits of AI will not be confined to US megacap tech names.

• SoftBank, a Japanese multinational investment holding company run by Masayoshi Son, sold its entire stake in Nvidia for $5.8 billion. SoftBank needs the cash—earlier this year, it agreed to invest $30 billion into ChatGPT-maker OpenAI by the end of December.

• Disney reported adjusted earnings of $1.11 per share and a 0.5% decline in revenue. The House of Mouse is making a $60 billion investment in its parks and experiences segments, which are intended to amp up its famed theme parks with new attractions and more than double its fleet of cruise ships from six to 13. As of the report, Disney’s channels were still dark on YouTubeTV as it has failed to strike a new agreement with Alphabet.[11]

• Warren Buffett released what will have been his final Thanksgiving letter to shareholders as acting CEO of Berkshire Hathaway, which put on display the Oracle of Omaha’s customary humility as well as set the stage for his successor, Greg Abel, whom he described as “a great manager, a tireless worker and an honest communicator.” Berkshire also announced a new $4.3 billion stake in Google parent Alphabet in its regulatory 13-F filing, which equates to a 1.6% portfolio position as of September 30.[12]

• Walmart CEO Doug McMillon announced his plan to retire. The stock has returned 15% annualized since he took the helm in 2014, beating the S&P 500 by a percentage point.¹

In Other News…

• The Epstein Files are increasingly looking like a Watergate scandal-sized risk for President Donald Trump.

The Week Ahead

• The backlogged data deluge is set to commence with the release of the Bureau of Labor Statistics’ (BLS) September jobs report on Thursday, November 20.

• The Federal Reserve will release the minutes from the FOMC’s October meeting, at which it cut the federal funds rate by a quarter point to a range of 3.75-4.00%, giving the market some insight into how Fed officials are thinking about the future path of interest rates.

• NVIDIA will cap off Q3 earnings season when it reports on Wednesday, November 19. The stock is roughly the size of the S&P 500’s Energy, Materials, Real Estate, and Utilities sectors combined, so it’s kind of a big deal.

• Retailers Walmart, Target, Home Depot, and Lowe's will report quarterly results during the week.

Economic and Index Definitions

[1] Data obtained from YCharts unless otherwise noted

[2]https://truthsocial.com/@realDonaldTrump/posts/115519726463094783

[3] Hamilton, Anita. “Trump Eliminates Reciprocal Tariffs on Beef, Coffee, Limes, and More.”: Barron’s, 15 November 2025, https://www.barrons.com/livecoverage/trump-shutdown-fallout-trade-news/card/trump-eliminates-reciprocal-tariffs-on-beef-coffee-limes-and-more-Ff11iSbt7vZfN8bvabxI?mod=article_inline.

[4] Stancati and Bade. “Italian Pasta Is Poised to Disappear From American Grocery Shelves” The Wall Street Journal, 10 November 2025, https://www.wsj.com/world/europe/italy-pasta-trump-tariffs-e38d86a6?mod=djem10point.

[5] CME FedWatch https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html.

[6] “Wolf, et al. “Verizon Communications to slash 15,000 Jobs.” Barron’s, 13 November 2025, https://www.barrons.com/articles/verizon-communications-stock-layoffs-job-cuts-d4074540?mod=djem_b_reviewandpreview.

[7] “October Challenger Report: 153,074 Job Cuts On Cost-Cutting & AI.” Challenger, Gray & Christmas, 6 November 2025, https://www.challengergray.com/blog/october-challenger-report-153074-job-cuts-on-cost-cutting-ai/.

[8] “GDP up by 0.2% and employment up by 0.1% in the euro area.” Eurostat, 14 November 2025, https://ec.europa.eu/eurostat/web/products-euro-indicators/w/2-14112025-ap.

9] Olick, Diana. “New foreclosures jump 20% in October, a sign of more distress in the housing market.” CNBC, 13 November 2025, https://www.cnbc.com/2025/11/13/foreclosures-rise-october-housing-market-distress.html.

[10] “Building Long-Term Returns: Our 10-Year Forecasts.” Goldman Sachs Research, 12 November 2025, https://www.gspublishing.com/content/research/en/reports/2025/11/12/0c292cc7-ce42-4fba-a026-744231e9f4f4.html.

[11] Glober and Palumbo. “Disney’s Earnings Had 2 Big Problems. The Stock Is Down.” Barron’s, 13 November 2025, https://www.barrons.com/articles/walt-disney-earnings-stock-price-8146d20b?mod=djem_b_Feature_11142025%2063932%20AM.

[12] Liu, Evie. “Berkshire Hathaway Bought Alphabet Shares in the Third Quarter. Here’s What It Sold.” Barron’s, 14 November 2025, https://www.barrons.com/articles/berkshire-hathaway-alphabet-apple-bank-of-america-warren-buffett-788a6ada?mod=djem_b_reviewandpreview.