this week
This week once again the market’s focus was on the Federal Reserve and artificial intelligence (AI) investments.
As for the Fed, they are more concerned about a weak labor market than inflation above target. In view of this, they cut the Fed funds rate by 25 basis points for the third consecutive meeting, bringing the Fed funds rate to a three-year low of 3.75%. From here, however, he indicated that a pause is likely as he expects the economy to improve in 2026. Specifically, they forecast faster real GDP growth in 2025 (2.3% vs. 1.7%), slower core inflation (2.5% vs. 3.0%), and slightly lower unemployment (4.4% vs. 4.5%), and only one rate cut (markets see two).
Shortly after the Fed meeting, Oracle’s earnings again raised concerns about AI spending. Oracle missed revenue and operating income while it raised its full-year capital spending plans by 40% to $50 billion, raising concerns about when AI investments will translate into profits.
For the week, both the Nasdaq-100® (blue line) and 10-year Treasury yields (black line) were nearly flat.
next week
Here are the top shows I’m watching next week:
- Tuesday November Nonfarm Jobs
- November CPI inflation on Thursday
- October retail sales on Tuesday
