November 10, 2025

“It doesn’t take a hero to order men into battle. It takes a hero to be one of those men who goes into battle.”

‒ H. Norman Schwarzkopf

Happy Veterans Day, please remember all we do is because of what they did.

Last week we finally got our pullback. Here are the numbers. The S&P 500 lost 1.6%, the Dow Jones Industrial Average surrendered 1.2%, the Nasdaq, after months of a relentless rally, the Nasdaq Composite just had its worst week since the April selloff, falling 3.0%. Internationally, The FTSE 100 was off .03% and the MSCI-EAFE down .03%. The 2-Year Treasury yield was 3.61% and the 10-Year paid 4.10%.

The equity markets corrected last week, with all the major stock indexes closing down. The highflyers of the last few months were hit the hardest, and for once the equal-weighted S&P index beat out the cap-weighted version (-0.4% versus -1.9% for the week).

Two factors are probably playing a role in the selloff.

First, the ongoing government shutdown is certainly playing a part. Furloughed workers, TSA delays, cancelled flights…..the consequences are starting to be felt. Looking at things from a narrow market perspective, liquidity is starting to dry up as well. The good news? The U.S. Senate has voted to end the Democratic filibuster on a funding bill, which is set to end the government shutdown as the impasse neared its 41st day. On Sunday evening, following an unusually busy weekend at the Capitol that saw bipartisan negotiations and all-nighters by legislative staff, enough Democrats had voted for the proposal to all but ensure that at least 60 senators will agree to invoke cloture on the funding bill. The second issue behind the market correction is the evolution of the AI story. This week OpenAI’s Sam Altman got a lot of attention when he called for a government backstop for its investment in data centers. This stirred up a hornet’s nest, and Altman backtracked on his comments last Friday. As such the futures turned positive so we will see how it ends today. An AI valuation reset is underway, but don’t mistake it for a collapse. Last week’s tech sell-off was sharp, yet it likely signals a routine pullback—not a deeper correction. Despite elevated earnings multiples, growth expectations remain strong, and names like AMD continue to outperform.

The next key moment comes Nov. 19, when NVIDIA reports earnings. As the S&P 500’s most significant weight and AI bellwether, its results will likely determine market direction into year-end.

Earnings season is in its final stretch, but the week ahead includes names in retail, AI infrastructure, and legacy tech. Overall, the results this quarter have beaten expectations, setting the stage for upward revisions in the months to come.

An Interesting analysis was put forth last week worth a notice. “But underlying such moves are also secular trends that can span several economic cycles, says Phillip Colmar, global strategist at Macro Research Board. On that basis, U.S. equities are in a 16-year secular bull market that began in 2009. Colmar says the S&P 500 SPX, or equivalent, has since 1871 completed four secular bull markets and four such bear markets, with their magnitude and duration varying significantly. The important thing to note, says Colmar, is that there is significant bifurcation in the market, with “substantially overpriced growth stocks (particularly Mega caps) and still relatively attractive value stocks.” He calculates that the inflation-adjusted growth stock index is now more than two standard deviations above the long-term trend for the aggregate U.S. market. In contrast, the U.S. value stock index is well below this trend line.” Still good value overseas. Translation: buy US Value, foreign stocks and emerging markets.

The U.S. jobs market might not appear to be crumbling, but it’s not getting any better — and it probably won’t anytime soon. Getting a clear read into the health of the labor market is a tough task as of late. Normally, investors would turn to the monthly U.S. employment report to get answers, but it’s been delayed by the longest government shutdown in history. The October employment report, which was due Friday, was the latest casualty

Economic data and the government shutdown added to the caution. The University of Michigan consumer sentiment index plunged to 50.4, down 6.2% from last month and nearly 30% year-over-year, and the FAA ordered cuts at about 40 major airports—disrupting travel and creating winners and losers across airlines, airports, car rentals and rail operators as passengers seek alternatives.

Overall, The S&P 500 last Wednesday tallied an impressive accomplishment: It reached its longest streak above its 50-day moving average since 2007, surpassing a 130-day stretch that ended in May 2011, but that nearly came to an end on Friday. The trend still appears to be the stock market’s friend. Dow Jones Market Data showed.

In other significant news, China has made a pledge to buy U.S. soybeans over the next few years, fueling hope for farmers who have been caught in the middle of a trade war between the two nations. And Nancy Pelosi made $130 million in stock profits during her career in Congress. Maybe after she finishes congress, she will open an investment management business. (Sorry, this has bothered me for years, that our elected officials seem to manage incredible wealth while in office, at least Michael Madigan is going to jail for it.)

And the FED? This week on Wednesday several Fed governors will speak and this Thursday the initial jobless claims will be reported followed Friday with inflations numbers for the consumer price index and the core PPI. Now that it looks like the government will reopen, more data will start coming again.

The breakthrough will be a well-timed boost for the stock market after last week’s brutal tech selloff—the Nasdaq Composite fell 3% amid fears over the artificial-intelligence boom.

After 40 days of impasse, the fallout has started to have a big impact on Americans in recent days. Consumer sentiment, which typically slumps in a shutdown, fell to near-record lows Friday. Airline disruption spiked over the weekend as more than 10,000 U.S. flights were delayed, according to Flight Aware data. Transportation Secretary Sean Duffy said 15 to 20 air-traffic controllers were retiring a day.

But those two issues should quickly ease once the government reopens. Morgan Stanley also expects a boost to liquidity as the U.S. Treasury restarts its spending.

So please remember those who served and enjoy the holiday.

Mike