Things You Need to Know
- Ta Dah! The shutdown is over! Everyone back in the pool!
- What did it really mean for the markets?
- Macro data to resume – all eyes on the Labor Market.
- Bonds up, Oil down, Gold up
- Try the Rigatoni All’ Vittorio
House Speaker Mikey Johnson calls everyone back to Washington to vote on the Senate’s “re-open the gov’t” bill — courtesy of Majority Leader John Thune — and stocks (mostly) liked it.
The Dow added 326 pts or 0.7%, the S&P added 4 pts or 0.06%, the Nasdaq LOST ground – falling 62 pts or 0.25%, the Russell lost 8 pts or 0.3%, the Transports added 125 pts or 0.8%, the Equal Weight S&P added 17 pts or 0.25% while the Mag 7 – like the Nasdaq came under pressure – falling 406 pts or 1.2%.
Now — am I convinced this rally is because they’re voting to reopen the government? Not really.
Let’s be honest: It was like a Seinfeld episode….
The market (S&P) didn’t exactly fall apart when the government shut down. In fact, you could argue it barely noticed.
It was trading at 6,718 when the drama began.
Dropped to 6,550 — a 2.5% pullback (reaction to the headline).
Then it ripped to 6,930 — up 6%. (a clear signal that the headline was a non-event)
Then it gave back 3.7%. (that was tech valuations – not the shutdown)
Then it tacked on another 3.3%… (a ‘buy the dip moment’ after the algo’s dismissed the ‘valuation’ drama)
And yesterday’s close at 6,850 — represents a 2% move higher from where all this nonsense started. The Nasdaq? Yeah – that followed the same path – trading down 2.5% and higher by 5.4%, the down 5.5% only to end up 3% by yesterday afternoon. (for all the same reasons!)
So sure — they voted last night to pass the bill and reopen the gov’t…
But let’s not pretend the market was hanging by a thread because of the shutdown. And this morning, futures are pointing flat to slightly lower as investors try to figure out what it all meant and what kind of damage — if any — the shutdown actually did to the economy.
Will we see a hit to GDP? Yes. How big? Well, Trump said last night the shutdown cost us $1.5 trillion. Let’s see what the Democrats claim it cost — but either way, the point is the same: that money is gone. At this point – as Hillary famously said – “what difference does it make?” It’s not going to magically reappear just because the doors are open again.
Think of it like this: if your restaurant is closed for six weeks, you don’t suddenly serve six weeks’ worth of meals the night you reopen. You don’t “make up” the lost revenue. You just move on.
Understand this — the bill only funds the gov’t until January 31st… which means we could be right back here on February 1st if those bozos in DC don’t learn how to play nice under the circus tent.
And let’s be honest — the circus will absolutely go on. Why? Because we’re heading into a mid-term election year, and Congress is praying that Americans will forget this entire chapter by next November. Another shutdown in 2026? That’s political suicide for both parties — and they know it.
And so, let’s move on…
It’s time to finally get the macro data we didn’t get over the past six weeks — and that is what’s going to dictate how markets (investors, traders, and the chaos-creating algo’s) respond next.
We should get the all-important NFP report next Friday, the 21st — the one that should’ve been released on the 7th.
Then we’ll roll right into CPI, PPI, Average Hourly Earnings, Average Weekly Earnings, and next week Factory Orders, Durable Goods, Retail Sales, Capacity Utilization, Housing Starts, Building Permits, and more later in the month.
In my view — the next move in the markets is going to be driven entirely by what these data points tell us. And don’t forget, then we’ve got the final FED meeting on December 10th — just 27 days away. Boston’s Suzy Collins came out this morning saying that SHE wants to keep rates where they are – so she is a ‘no cut’.
So, expect to hear a lot more jawboning from all the Fed heads about where they think rates are headed. Remember — they go into blackout on December 2nd, so whatever they want to say, they’ve got eight days to say it.
Now — the market is still pricing in a 25-bps cut, but there’s growing chatter about a 50-bps cut. A move like that would send a very different message. At this point, a 50-bp cut would SCREAM desperation — and panic and that would not cause markets to surge…… So, hold onto your hats…
Bonds rallied just a bit yesterday — after being under assault for most of the past couple of weeks — but let’s be clear: bond prices and yields have been all over the place since this whole drama began. The TLT and TLH are up 5.6% and 4.1% since October 1st. 10 yr yields have gone from 3.95% to 4.14% and back to 4.07%.
The action has looked a lot like what happened in the S&P, the Nasdaq, and the rest of the indexes… a whip-saw mess in the middle, but higher overall.
Yesterday, TLT and TLH added 0.2% and 0.1%, leaving the 10-yr yielding 4.07% and the 30-yr at 4.65% — levels that have helped the broader market hold its “trading range.” And as long as yields stay contained, stocks should stay contained.
The real issue is what happens next: Do yields spike? Do they retreat? We are about to find out.
Oil got crushed yesterday — falling $2.50 or 4.2% to end the day at $58.50. Why? The oversupply argument is back… remember that looming GLUT? Yeah, well — it’s baaackk!
The IEA (International Energy Agency) is reminding everyone that we’re heading toward a record surplus in 2026, and suddenly the chatter of WTI in the high $40s and Brent in the low $50s is alive and well again.
Lower oil prices will absolutely help bring down gasoline prices — and that reduces inflationary pressures across the board. That’s a PLUS for consumers, businesses, manufacturers, the Fed, and every other central banker.
We are now firmly in the $55–$62 trading range — the path of least resistance is lower, not higher.
Gold is in overdrive again — up $68 yesterday and another $45 this morning. We’re now trading around $4,238, up from $3,950 just last week, but still below the all-time high of $4,375. This move is a direct reaction to shifting Fed expectations. And the excitement is building because more and more analysts are whispering the same thing:
A 50-bps cut is now “on the table.”
They’re not saying it’s going to happen — but they’re saying it’s a real consideration. Why? Because many expect the labor market to finally show real weakness. Remember — we’ve heard about all those expected layoffs, and we’ve now missed two NFP reports thanks to the shutdown.
So, we wait until next week’s NFP report says about the state of the labor market — and the expectation is that it’s going to show weakness and we know the FED is focused more on labor than inflation.
US futures are churning…. they are not running away…. Dow futures +35, S&P’s +1, Nasdaq down 3 and Russell is down 4.
European markets are mixed – not really reacting to the end of the shutdown. The UK economy by 0.1%. Eurozone Industrial Production is due later today. France is in the lead up 0.7% while Germany is down 0.4%.
The S&P closed at 6,850 – up 4 pts. I suspect that we will churn, digest the recent push higher before we push higher again. Now that the shutdown is over, we need to assess the macro data and we will. My gut says that we remain in the 6670/6900 trading range. But remember – NVDA is set to report next week – November 19th and everyone is waiting…remember it is a very crowded trade. The prediciton markets are pricing in a 90% chance of significant beat – but remember shares are already trading at a PREMIUM. Yesterday AMD surged by 9% after CEO Sue told us that the future is BRIGHT – AI sales are exploding.
Watch for the eco data, listen to what JJ says about why they are cutting and then make a decision about what that means or not to your portfolio. And all that means is – remain disciplined, talk to your advisor if you are concerned, do not chase – stick to the plan.
Call me at 561-931-0190 – to give you a no obligation review of your portfolio. It’s all about risk management – let me help you assess the risk of the portfolio vs. the risk you are willing to take.
Countdown
15 days until Official Black Friday but only 7 days (11/20) until the Pre-Black Friday sales begin.
27 days until the FOMC announcement.
42 days until Christmas
48 days until the ball drops in Times Square
Take good care,
Sources: Bloomberg, CNBC, Reuters, Wall Street Journal
Disclosure: The content provided in this material is designed for educational and informational purposes only, and it is important to note that it does not constitute personalized recommendations. This commentary is not nor is it intended to be relied upon as authoritative or taken in substitution for the exercise of judgment. The comments noted herein should not be construed as an offer to sell or the solicitation of an offer to buy or sell any financial product, or an official statement or endorsement of Kenny Polcari or SlateStone Wealth.
The market commentary is the opinion of the author and is based on decades of industry and market experience; however, no guarantee is made or implied with respect to these opinions, which may not necessarily align with our firm’s standpoint.
While considerable effort has been invested to ensure the accuracy and dependability of the information presented, we must clarify that we cannot guarantee the accuracy of third-party information. Our usual sources for third-party data include channels such as Bloomberg.
Rigatoni All Vittorio
So easy and so good.
For this you need: 1 lb. of Rigatoni, 3 garlic cloves, 1 shallot (diced), 1 can of crushed Italian tomatoes (28 oz), 1 container of cherry tomatoes, Olive Oil, Butter, and Fresh Grated Romano Cheese.
Begin by slicing the cherry tomatoes in half – set aside.
Bring a pot of salted water to a rolling boil and set on the back burner till you need it.
Add enough olive oil to the bottom of a sauté pan – add in the 3 garlic cloves (whole) and the diced shallots. Heat up and sauté for about 5 mins…. Pick up the pan and tilt it, so that the oil pools at the edge and let the whole garlic cloves cook – submerged in the oil. Do not let them burn.
After 5 mins – add in the crushed tomatoes, add in the sliced cherry tomatoes – season with s&p – bring to a boil and then reduce heat to med – let it cook for 20 mins – making sure to stir every 5 mins or so.
After 20 mins – turn the heat off and let it cool for 5 mins. Then place it in a blender/Food processor and blend it all. Pour the blended sauce back into the pan.
Now – add the pasta to boiling water and cook until aldente (8 mins). Using a slotted spoon – add the pasta to the sauté pan with the tomatoes.
Add in a ladle of the pasta water (tears of the Gods) and then mix to coat.
Now add a handful of the grated Romano Cheese – mix to coat – allowing the cheese to melt into the sauce.
Serve immediately in warmed bowls.
That’s it – simple – nothing else.
Buon Appetito!