“Take care of the minutes, the hours will take care of themselves.”
-Philip Dormer Stanhope
Here’s what you need to know this week:
- Stocks oscillate wildly before ending the week flat
- A weakening labor market sends mixed signals heading into the holidays
Every Which Way
Last week saw a sharp rise in volatility as Congress finally ended the government shutdown. Investors juggled competing headlines: positive developments such as air travel returning to normal were countered by announcements that we will likely never receive the complete economic reports that were delayed by the shutdown. The S&P 500 gained more than 1% on Monday when a Congressional deal seemed imminent, fell more than 1% on Wednesday when the abridged economic reports were announced, and ultimately ended the week completely flat.
Despite the government reopening, the shutdown may have done lasting damage to the odds of an interest rate cut in December. Federal Reserve Chairman Jerome Powell had already voiced concerns that a lack of economic data would hinder the Fed’s ability to accurately gauge the state of the economy and it appears investors have taken him seriously. Last month, the bond market was assigning a 93.7% chance of a 25 basis point (0.25%) interest rate cut next month; today, they are only assigning a 42.4% chance[1]. Things may change between now and the next Fed meeting on December 10th, but for now it seems the shutdown truly did inject some uncertainty back into the markets.
Wobbling
The job market has continued to deteriorate, adding additional uncertainty as we approach the holiday season, typically the busiest and most profitable season for many businesses. Layoffs have been slowly but steadily climbing since 2023 and have spiked twice this year. Excluding the extraordinary circumstances of the COVID pandemic in 2020, this October marked the second-highest amount of monthly layoffs since the 2008 recession, eclipsed only by the layoffs in May of this year following President Trump’s tariff plan:
Additionally, unemployed workers are consistently spending more time searching for a job after being laid off:
However, there are two reasons to remain optimistic. First, the Federal Reserve’s dual mandate dictates that the Fed try to keep inflation and unemployment low. The inflation portion of the mandate has received most of the attention over the last few years for obvious reasons, but rising unemployment may also induce the Fed to slash interest rates. However, lower rates may also cause inflation to rise further.
This is where our second reason to remain optimistic comes into play. President Trump issued an order on Friday to slash tariffs on a number of consumer staples such as beef, tomatoes, coffee and bananas in an attempt to lower inflation and give the Federal Reserve more room to lower rates, in turn giving businesses cheaper capital with which to retain workers[2]. While the government shutdown’s negative impacts are now apparent, if our government remains vigilant and proactive we may be able to prevent any further damage.
What Else
- November 12th marked the final issuance of the US penny and the coins will now begin to be removed from circulation
- Negotiations between Israel and Syria have stalled, threatening further escalation in the Middle East
- Russia continued their airstrikes on the Ukrainian capital of Kyiv, killing at least six and dealing major damage to the embattled capital’s power grid
- OU won a critical game against Alabama 23-21 and have reentered the College Football Playoff conversation
- OSU’s wrestling team took third place at the National Duals Invitational despite six of their ten wrestlers being freshmen
- US markets will be closed next Thursday in observance of Thanksgiving
What We’re Reading
Monarch butterflies famously migrate every fall and spring, but scientists have struggled to accurately track their migration due to the butterflies’ small and fragile frame. However, a new solar-powered radio tag that is roughly the size and weight of one grain of rice has finally cracked the case. The results are incredible, showing butterflies migrating all the way from Canada to Mexico. Click below to read more about this breakthrough:
What’s Happening Downtown
The final Scissortail Night Market takes place this Friday, November 21st. This event features more than one hundred stalls from local vendors, dozens of food trucks, live music, dancers, movies and more. The market runs from 5:30 to 10:00 PM and is one of the largest events that Scissortail Park puts on every year, come down and knock out some of your Christmas shopping early!
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Written by: Kane Ogle, CFP®
Steve Beck, Kane Ogle, CFP®, Amber Eduvigen, CFP®, Cale Olbert, CFP®, Brett Valentine, CFP®, Brandon Ingerson, Bill Daniel, Sam Postich, Jenni Hess