Beyond The Noise: Markets Remain Resilient

1. Market Rotation. Despite expectations for seasonal choppiness, the volatility that typically shows up in September and October never materialized. Instead, markets advanced a combined 6% over those two months, and the pickup in volatility we’re now seeing in November looks more like mild risk-off positioning and sector rotation than a signal of broader stress. The backdrop remains strong; equities are up 38% off the April 8^th “Liberation Day” lows, and earnings are up nearly 12%.^[1]

The Atlanta Fed’s GDPNow tracker continues to print 4.1% growth, even amid policy uncertainty and mixed headlines. While part of that strength is tied to themes like AI investment, onshoring, and supply-chain rebuilding, the consumer is still doing its part. Bank executives who have the clearest real-time read on household behavior continue to report resilient spending, historically low delinquency rates, and no meaningful pressure on net charge-offs.

2. Real Earnings, Real Demand. Despite growing concerns about an “AI bubble,” the current setup looks far more like a healthy pause. AI stocks have had a strong run, and some digestion is natural, but unlike the “dot-com bubble,” where many companies had no profits, no cash flow, and no viable business models, the AI ecosystem today is being driven by real earnings, real demand, and real capital investment.

What stands out is how broad participation has become. Utilities, industrials, and traditional technology companies are all investing because they see a real, sustained need. Earnings tell the story even more clearly. Amazon (AMZN) grew earnings 36% last quarter, Broadcom (AVGO) 36%, Meta Platforms (META) 20%, Microsoft (MSFT) 12%, and if Nvidia simply reports in line, year-over-year earnings will be up roughly 50%.^[2]

3. Consumer Outlook. “The Big Beautiful Bill” passed earlier this year, which will deliver additional support to lower-income households beginning in 2026, while current tax rates remain unchanged. These policy tailwinds should help sustain spending, particularly as inflation shows signs of settling. Inflation may not retreat meaningfully from current 3% levels, but it is also unlikely to re-accelerate.

Recent shifts in trade policy could also ease cost pressures, as the new administration has already begun rolling back select tariffs on commodities, providing some relief to categories hit hardest. The economy continues to grow above trend, which naturally keeps inflation somewhat elevated

4. Labor Market. The labor market is cooling, not collapsing, but the underlying dynamics are far healthier than the headlines suggest. Companies have shifted from aggressive post-pandemic hiring to a more disciplined approach. At the same time, productivity has quietly become one of the most encouraging data points. We are now seeing productivity increase by 3% which gives companies room to manage labor costs without resorting to broad layoffs.

5. Upcoming. It’s a busy week on the earnings and events calendar, with a heavy concentration in retail and key updates from technology. On the consumer side, Home Depot (HD), Lowe’s (LOW), Walmart (WMT), and Target (TGT) all report, offering an important read on spending patterns, holiday-season setup, and broader consumer health. In tech, both Palo Alto Networks and NVIDIA are set to release results.

Beyond earnings, several companies are hosting analyst days, including Aptiv (APTV), Freeport-McMoRan (FCX), and Rockwell Automation (ROK). We also round out the week with Thursday’s Nonfarm Payrolls report

6. Fixed Income. U.S. Treasury yields moved higher across the curve last week, as the resolution of the government shutdown improved risk sentiment and a series of hawkish remarks from Federal Reserve officials tempered expectations for additional easing in December. By week’s end, the 2-, 10-, and 30-year yields had risen by 4, 5, and 5 basis points, respectively. The market-implied probabilities shifted notably, with investors now assigning less than a 43% likelihood of a 25-basis point rate cut at the December FOMC meeting, down from over 63% the week prior.

Corporate credit spreads widened across both investment-grade and high-yield last week. Investment-grade spreads widened 2 basis points to +119, while high-yield narrowed 5 basis points to +352. Concurrently, U.S. credit quality deteriorated last week, with the main rating agencies reporting 31 downgrades compared to 23 upgrades.^[3] The Consumer Discretionary Sector led with the most downgrades, while the Industrial sector saw the highest number of upgrades. In the municipal market, tax-exempt yields were lower by 1-2 basis points across the curve.

Stephanie Link’s TV Schedule:

Return for Selected Indices^[4]

Sources:

^[1] Bloomberg: As of November 17, 2025

^[2] Bloomberg: As of November 17, 2025

^[3] Bloomberg: As of November 17, 2025

^[4] Source: Bloomberg. As of November 17, 2025.

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