Edward Meir's Week in Review for AMU: Nov. 16, 2025

In the equity space, optimism surfaced late Sunday and going into Monday of last week after eight Senate Democrats broke ranks and agreed to a deal that got the Senate to a 60-vote minimum, bringing the longest US government shutdown in history to an end. The two sides agreed to provisions that would extend spending programs until Jan. 30. They also agreed to disallow additional downsizing of the federal workforce until that time as well.

The Senate deal would in addition ensure back pay for all federal workers. It would fund SNAP food subsidies program through September of next year. And it would also call for a vote on extending health care subsidies. That was the best Democrats managed to get following failed attempts to secure a one-year extension for these benefits.

The end of the shutdown would also mean the flow of economic reports will now resume, ending a prolonged data drought that was frustrating economists – and the Fed. Having said that, the White House noted that the October jobs and CPI reports could not be reworked and so would not be released. It also added that Q4 GDP will likely be 200 basis points lower due to the shutdown.

Worries about AI spending

A surge of buying on Wall Street greeted the news of the Senate deal early last week. But by the time the House and the president signed on to the reopening days later, equity investors had soured on the markets. They focused instead on high valuations and growing unease about the vast amounts of money being spent on AI.

But if there were any misgivings about this spending, it certainly was not expressed by AI participants themselves. All of them remain extremely upbeat on prospects. ADM was a case in point. After posting stellar Q3 earnings last week, the chipmaker said it expects to realize $100 billion in AI-related chip revenue over the next three to five years. And the company sees the entire data center market ballooning to $1 trillion by 2030.

Despite these optimistic remarks, investors were not aggressively “buying the dips,” and most AI names ended lower on the week. By Friday, the Dow, and the S&P-500, ended with fractional gains while the NASDAQ Composite finished down by -0.5%.

Treasury yields finished higher, rather surprisingly, as we usually see a flight to safety to bonds when equity markets struggle. By week’s end, the 2-year yield tacked on five bp points to end at 3.61%. Ten-year yields settled up six bp to 4.15%.

Energy markets recap

In the energy markets, Brent rose 1.2% last week, outpacing WTI’s 0.6% gain. Product prices were steady, with both gasoline and diesel tacking on 5-7 cents. Markets continue to watch developments in Russia/Ukraine, where the fighting is getting worse – with no end in sight. Following attacks on Kyiv, Ukraine attacked the Russian port of Novorossiisk, halting 2 mbpd of exports. It followed that up with a drone attack on a Russian oil refinery and a fuel storage facility as well. Meanwhile, JP Morgan estimates that about 1.4 million bpd of Russia’s oil is being stored on tankers. Why? US sanctions on Rosneft and Lukoil.

Natural gas settled at $4.56/mmBtu on Friday, up about $0.25 on the week. It got to an eight-month high of $4.68 at one point. The weekly gain would have been more were it not for a 4% decline that set in Friday after the EIA showed a bigger-than-expected build last week. Stocks are now about 172 Bcf (5 %) above the five-year average, but just about unchanged vs. last year. In other words, there is not a huge buffer going into the winter. Meanwhile, the amount of gas flowing to the eight main LNG export plants rose to a record high last month, and November looks just as strong.

Metals and steel recap

In base metals, copper ended up 1.26% last week after exhibiting wild price swings. Aluminum finished down by ).4%. But there was little change in Midwest premiums, which were still stuck in the mid-80s. Nickel and zinc each lost about 1.2% on the week, with nickel now looking particularly poor on the charts. Lead and tin were the only winners, up by 0.80% and 2.7%, respectively.

Gold dropped 3% on Friday, sparked by equity volatility, sluggish physical demand, and hawkish remarks from a number of Fed officials. However, the precious metal still managed to close up by 2.3% on the week. Silver had a far better showing, gaining 5% on the week while palladium and platinum finished higher, too. In steel, hot-rolled coil gained ground, with rebar values being particularly firm.

Trade policy update

On the trade front, President Trump on Friday slashed tariffs on a number of agricultural imports with immediate effect in an attempt to bring down the cost of groceries and help reverse his sagging poll numbers on inflation and the economy. The duty exemptions would apply to more than 200 products, including oranges, tomatoes, bananas, cocoa, coffee, and tea. Beef imports were also included as were some fertilizers. The US Chamber of Commerce applauded the move and urged additional action, saying that “We encourage the administration to … provide additional tariff relief for other products not readily available from domestic sources and in instances where tariffs threaten American jobs.”

Separately, the Trump administration reached a deal with Switzerland that will lower tariffs on imports to 15% from a high of 39%. Switzerland also agreed to invest $200 billion in the US during President Trump’s first term, including $70 billion next year. But how these will be structured has not been defined. The Swiss also agreed to lower some of their agricultural trade barriers (likely unpopular with Swiss farmers) and in addition agreed to buy more Boeing planes.

Quote of the week

“Sometimes we see bubbles. Sometimes, there is something to do about it. Sometimes, the only winning move is not to play,” Michael Burry, of ‘The Big Short Fame‘ (and also an AI skeptic and short seller), on X. Burry made the remark after announcing that he would be winding down his Scion Capital hedge fund.

Macro readings and other news from the past week

• A number of Fed Governors delivered fairly hawkish comments on the rate outlook this past week, reducing the probability of a December cut to 46%, down from an earlier high of 64%. Among those we heard from was Atlanta Fed President Raphael Bostic (a non-voting FOMC member). He reiterated that inflation remains a greater concern than the labor market and supports holding rates steady. Bostic also announced plans to retire at the end of his term in February of 2026. Boston Fed President Susan Collins and St. Louis Fed President Alberto Musalem (both voting members) also said the Fed needs to hold the line on rates, as did non-voting member Cleveland Fed President Beth Hammack.
• The weekly MBA Mortgage Index rose 0.6% after falling 1.9% a week ago. The Purchase Index was up 5.8% while the refinance Index fell 3.4%.
• In labor news, the ADP projected that 42,000 jobs were created in October, not a particularly high (or reassuring) number.
• Japanese manufacturing confidence surged to its highest level in nearly four years in November, led by electronics and autos. We are not sure what is behind the optimism but suspect that a weaker yen has a lot to do with it.
• In mining news, London’s highest court ruled that BHP is liable for the 2015 collapse of a dam in southeastern Brazil, which the company operated in a joint venture alongside Vale. Damages could run as high as nearly $50 billion. BHP said it would appeal the ruling, arguing that 240,000 claimants “have already been paid compensation” and so the damage assessment should be reduced. A separate claim against Vale is working its way through the Dutch courts.
• Macro numbers out of China released last week were uninspiring. October factory output and retail sales both grew at their weakest pace in over a year. Industrial output was up by 4.9% year-on-year, well below the 6.5% seen in September and came in at its weakest annual pace in 16 months. Chinese fixed asset investment — a measure of government infrastructure spending — declined by 1.7% year to date through October, the first decline since COVID. Retail sales grew by 2.9%, down slightly from the 3% increase seen in September. But it was still the worst reading since August of last year. (The government said last month that it would take steps to lift consumer spending “significantly”. But such promises have been made before as authorities introduced trade-in schemes and product subsidies. None have made much of an impact.)
• China’s new home prices resumed falling as well, this time by their fastest monthly pace in a year. Property investment and new construction starts also declined — no surprise here. Chinese car sales snapped an eight-month winning streak, as a phaseout of various tax breaks and subsidies dented consumer enthusiasm.
• Chinese government data showed that aluminum production rose by 0.4% to 3.8 million metric tons in October from a year earlier. In the first ten months of the year, the country produced 37.8 million tons of metal, 2% higher than the same period last year. Production of nonferrous metals – including copper, aluminum, lead, zinc, and nickel – also rose by nearly 3% from a year earlier. Year-to-date output of the group was up 3.1 % to 68 million tons.
• European aluminum importers are scrambling to secure more metal before CBAM charges begin to accrue at the beginning of next year.

This week’s US macro readings

We did not get much data out last week. But we’ll see what this week brings as the statisticians try to catch up.

The November Empire State manufacturing survey comes out Monday (expected at 5.5, last 10.7). A number of Fed governors will be speaking as well. On Tuesday, we get October industrial production, the October import price index, as well as a homebuilder confidence index for November. Wednesday brings us the Philadelphia Fed manufacturing survey for November (expected up +3, last -12.8) along with October housing starts and permits. The August US trade deficit comes out on Wednesday (expected at $-61 billion, last $78 billion.) Thursday brings us delayed September unemployment readings, latest weekly initial jobless claims (expected at 225,000), and October existing home sales (expected at 4.08 million, (unchanged from last month.) Friday brings us final consumer sentiment readings for November (expected at 51, last 50.3) as well as the S&P “flash” US manufacturing and services PMI.

We wish our readers a pleasant week ahead.