Ten Stories Moving the Market

Editor’s note: There won’t be any commentary on 11/27 through 12/1 due to the Thanksgiving holiday and the office being closed.

Ten Stories Moving the Market:

Allies of Federal Reserve Chair Jerome Powell have laid the groundwork for him to push a rate cut through a divided committee at next month’s meeting even though it could draw multiple dissents; the unusual level of division inside the Fed means that, to an even greater degree than usual, the final call rests with Powell – WSJ. (Why you should care – Powell has continued to express increasing concerns about the downside risks to the labor market while he feels inflation should come back to the central bank’s 2% target) 

U.S. President Donald Trump signed an executive order establishing the “Genesis Mission,” a federal effort to boost innovation using artificial intelligence — the latest step by the administration to promote AI technology and its adoption – Bloomberg. (Why you should care – the order will include private/public partnerships with companies including Nvidia, Dell, HPE, and Advanced Micro Devices, among others)

Federal Reserve Governor Christopher Waller (dove, voter) said the job market is weak enough to warrant another quarter-point rate cut in December, though action beyond that depends on an upcoming flood of data delayed by the government shutdown – Reuters. (Why you should care – Waller said most of the anecdotal data since the last Fed meeting points to a continued slowdown in the labor market)

Federal Reserve Bank of San Francisco President Mary Daly (dovish, non-voter) said she supports lowering interest rates at the central bank’s meeting next month because she sees a sudden deterioration in the job market as both more likely and harder to manage than an inflation flare-up – WSJ. (Why you should care – Daly said she’s increasingly worried that a failure to support the labor market makes it increasingly vulnerable to deteriorating more)

U.S. President Donald Trump and Chinese President Xi Jinping held their first talks since agreeing to a tariff truce last month, discussing trade, Taiwan and Russia’s invasion of Ukraine; Trump said he agreed to visit Beijing in April, and that he had invited Xi for a state visit next year – Bloomberg. (Why you should care – the discussion and commitment to foreign travel appears to be a commitment to the recently agreed trade détente)

China installed 295,000 industrial robots last year, nearly nine times as many as the U.S. and more than the rest of the world combined; while China’s long-term AI goals are no less ambitious than the U.S. tech titans, its near-term priority is to shore up its role as the world’s factory floor for decades to come – WSJ. (Why you should care – a more efficient and less costly manufacturing base allows China to produce and ship more goods globally)

Amazon is planning to invest about $15 billion in Northern Indiana to build data center campuses, the tech giant said as it looks to boost its cloud computing capacity to support booming artificial intelligence demand – Reuters. (Why you should care – current AI capex spending is around 1% of GDP while past technology revolution bubbles have seen similar spending swell to 2% to 5% of GDP) 

Nvidia stock slid after the Information reported that Meta Platforms was in talks to spend billions on Google’s AI chips, suggesting the internet search leader is making headway in efforts to create a rival to the industry’s bestselling AI accelerator – Bloomberg. (Why you should care – the bigger issue in the data center buildout appears to be the ability to secure chip supply, hence the move to so-labeled “circular deals” being done by companies)

The United States demanded that the European Union make its regulation of the tech sector more "balanced" in exchange for a reduction of U.S. tariffs on steel and aluminum imports from the bloc - Reuters. Why you should care – trade tensions between the two trading blocs appear to be rising once more)

U.S. economic growth will increase slightly next year but employment gains will remain sluggish, and the Federal Reserve will slow any further rate cuts, economists polled by the National Association for Business Economics said in the group's year-end forecast survey – Reuters. (Why you should care – the expectation for 2% growth in 2026 would come in below the long-term average and help to keep inflation in check)

Economic Calendar:

Earnings: ADI, ADSK, BABA, BBY, DELL, HPQ, NTAP, SJM, WDAY

Germany – GDP for 3Q (2:00 a.m.)

France – Consumer Confidence for November (2:45 a.m.)

U.S. – ADP Employment Change Weekly (8:15 a.m.)

U.S. – PPI for September (8:30 a.m.)

U.S. – Retail Sales for September (8:30 a.m.)

U.S. – FHFA House Price Index for September (9:00 a.m.)

U.S. – S&P/Core Logic Case-Shiller Home Price Index for September (9:00 a.m.)

U.S. – Conference Board Consumer Confidence for November (10:00 a.m.)

U.S. – Pending Home Sales for October (10:00 a.m.)

U.S. – Richmond Fed Manufacturing Index for November (10:00 a.m.)

Treasury Auctions $85 Billion in 6-Week Bills (11:30 a.m.)

Treasury Auctions $50 Billion in 52-Week Bills (11:30 a.m.)

Treasury Auctions $70 Billion in 5-Year Notes (1 p.m.)

Treasury Auctions $28 Billion in 2-Year Floating Rate Notes (1 p.m.)

U.S. - American Petroleum Institute Crude Oil Inventory Data (4:30 p.m.)