Edward Meir's Week in Review for AMU: Dec. 1, 2025

The most notable advance occurred in the US equity markets. All three major averages reclaimed their 50-day moving averages this past week, a key technical indicator that was “revived” after getting breached earlier in November. For the week, the NASDAQ climbed by a whopping 4.9%, the S&P 500 was up 3.7%, while the Dow added 3%. For the month, the S&P 500 eked out a 0.1% monthly gain, a respectable showing given the sizable declines we saw earlier in the month. The Dow finished with a 0.3% gain. Both indices managed to keep their seven-month winning streak intact. However, NASDAQ finished down 1.5% on the month, its first monthly decline since March.

Interest rates, consumer confidence, and Black Friday

The buoyant mood was attributable to growing confidence that the Fed will ease policy in December. It came as more Fed governors made speeches this past week calling for easier credit. In fact, the odds for a December rate cut now stands at 87%. That’s up from the mid-30% level seen last week.

One of the problems the Fed has is that it is still not getting the full picture of where the economy stands. Why? Because a number of key macro reports are still missing on account of the government shutdown. And in some cases, they will not get released at all. However, Fed governors seem to be coalescing around the notion that while they don’t have all the data they typically would like to see, they have enough anecdotal evidence in the nongovernment releases (along with the more recent government reports) suggesting that the economy is indeed slowing – and so a rate cut for December would be warranted.

The Fed is also surely aware that US consumer confidence readings are falling sharply and that this could easily impact consumer spending down the road. In fact, last week we learned that September retail sales rose by only 0.2% month-over-month (consensus 0.4%) after increasing by 0.6% in August. Excluding autos, sales were up 0.3%, as expected, following a 0.6% increase in August. Gasoline station sales were a big driver behind the increase. Excluding these, sales would be just about flat. Sales for tariff-sensitive items, such as vehicles, electronics, and clothing struggled. But wealthy consumers boosted outlays at bars and restaurants, at personal-care stores, and on furniture. (We are not sure if October retail sales will be released. But if they are, they likely will not be much stronger.)

We will have to see how this past week’s Thanksgiving spending fares. But initial reports suggest that US shoppers spent a record $11.8 billion online, up 9.1% from 2024 levels. Much of the online traffic was directed by AI, where retailers used a number of apps to help consumers shop more efficiently. Conventional retail shopping was weaker. Inclement weather in some states didn’t help. The strongest shopping in conventional retail was evident at discount stores. Globally, Reuters reports that AI agents influenced $14.2 billion in online sales on Black Friday, of which $3 billion came from the US.

The stronger tone we saw in US equity markets last week was also helped in large part by sliding US interest rates. Mortgage rates are coming down (finally) following the gradual slide we are seeing in both 10-year and 30-year paper. Ten-year treasury yields briefly broke below 4% before ending Friday at 4.017%, down two basis points on the week. The thirty-year bond lost about five basis points to end the week at 4.66%.

Metals

Commodity markets came back strong last week as well, keeping pace with rebounding US equities. LME copper prices hit a fresh record high of $11,210/ton ($5.08/pound) before retracing slightly by the close. But they still posted a strong 3.8% gain on the week. Aluminum and nickel gained 2.9% and 2.6% on the week, respectively, while zinc advanced by 2.2%. Tin was the standout, up 6.1% on the week and closing at a fresh record high of $39,300/ton – nearly $18/pound! Lead was the usual contrarian, the only metal that lost ground last week. With inventories across most metals quite low, we have seen many of the intramarket spreads tighten as well, particularly in zinc and tin.

Precious metals were also on the move. Gold closed at a two-week high on Friday. But silver truly sparkled. It soared by 5.5% on Friday alone to finish at just over $57/ounce – up 16% for the month! Platinum gained 3.2% on the week, while palladium was up by 5.2%. A combination of a slowing economy, coupled with expected increases in the frequency of rate cuts, is clearly turbocharging the precious metal group.

Oil and the greenback

In energy, both crude contracts ended up by around 1% for the week. But they settled down for a fourth straight month, the longest losing streak since 2023. Pricewise, a Reuters survey of 35 economists expect Brent to average $62.23/barrel in 2026, down from October’s forecast of $63.15/brl.

Separately, OPEC met on Sunday and left output unchanged. But we suspect that oil prices will open higher later in the Monday session. That’s not so much on the OPEC news, but rather on weekend developments. In this regard, President Trump said on Saturday that Venezuelan airspace should now be “considered closed,” suggesting that US air strikes are imminent. In addition, Ukrainian naval drones hit two tankers in the Black Sea over the weekend as they headed to a Russian port to load up with crude destined for foreign markets. The attacks followed similar hits on Russian oil refineries that have been going on for months now. But this is the first time the Ukrainians have targeted tankers. Meanwhile, a Ukrainian delegation is on its way to the US to continue talks on a proposed agreement to end the war.

Finally, the general dollar index was on track for its worst weekly performance since late July on rate concerns and growing evidence of a slowing economy. For the week, the general dollar index was off by about 0.6%.

Macro readings and other news from the past week

• We should get our first reading for ADP private payroll numbers for November this week. The latest ADP weekly reading showed employers shedding an average of 13,500 jobs over the last four weeks. As a result, we will likely see a negative reading when the full-month report comes out.
• The US producer price index increased 0.3% month-over-month in September following a 0.1% decline in August. The year-over-year rise clocked in at 2.7% versus 2.6% in August. The core rate rose by just 0.1% month-over-month following a 0.1% decline in August – leaving the year-over-year change at 2.6% versus 2.8% in August. The numbers must have pleased the Fed, with the decline in the y/y rate being particularly reassuring.
• In housing news, the September FHFA housing price index came in unchanged, better than the 0.3% increase expected. The September S&P Case-Shiller home price index rose by 1.4% y/y, less than the 1.6% consensus expected, but still on an upswing. The MBA mortgage applications index increased 0.2% from a prior decrease of 5.2%.
• September durable goods orders increased 0.5% month-over-month following a revised 3.0% increase in August. Excluding transportation, goods orders rose by 0.6%. Business spending, as reflected in nondefense capital goods orders (excluding aircraft), was up by 0.9% – better than the 0.7% growth rate seen in July. We suspect that most of the increase in business spending is AI/data-center related.
• The November Chicago PMI plunged to 36.3 (consensus 44.5) from a prior reading of 43.8, reflecting ongoing weakness in regional manufacturing.
• The Fed’s November Beige Book reported little change in activity since October. Two districts reported modest softness while one reported slight growth. Consumer spending eased. But spending on high-end items was stronger. Manufacturing activity increased slightly. There was some pressure on overall employment while prices rose moderately.
• Reuters reports that China suspended plans to build new copper smelters, sidelining around two million metric tons of planned smelter capacity, the VP of China’s Nonferrous Metals Association told an Asia copper conference gathering in Shanghai. He noted that “China’s copper refining and copper processing will no longer pursue the goal of quantity.”
• Numbers out of China over the weekend showed that factory activity shrank for an eighth month in November while services cooled. The manufacturing PMI rose to 49.2 in November from 49.0 in October. But it remained in contraction territory. More concerning, the non-manufacturing PMI, which includes services and construction, fell to 49.5 from 50.1 in October. It contracted for the first time since December 2022.

This week’s US macro readings

Monday will be an important day as Fed Chair Jerome Powell is scheduled to speak, and so we could get a better sense of the Fed’s leaning on interest rates. In addition, we get the November ISM manufacturing number on Monday, along with the less important S&P November manufacturing PMI. Tuesday brings us November automobile sales. On Wednesday, we get the November ADP private payroll report, along with September import prices (delayed), the November ISM services report, and the November S&P final service PMI reading. On Thursday, we get weekly initial jobless claims and the October US trade deficit. Friday will bring us September personal income and spending (delayed), the September PCE inflation index (delayed), along with December consumer sentiment and October consumer credit.

We wish our readers a pleasant week ahead.