November 17, 2025

“He who doesn’t study history is doomed to lose money.”

Ray Dalio, founder of Bridgewater

Hope all remember our veterans last week. As we wrap up a tumultuous period marked by the end of the longest U.S. government shutdown in history, markets grappled with volatility, Fed signals on rate cuts, and a flurry of delayed economic data. First, here are the numbers for week. The S&P500 finished off .76%, the Dow Jones Industrial Average managed a gain of .11%, the Nasdaq was the big loser off 1.75%. Internationally things were better the FTSE 100, booked a gain of .16% and the MSCI-EAFE was the big winner, adding 1.26%. The 2 -Year treasury yield was 3.608% and the 10-Year paid 4.156%.

So, what happened? In a nutshell in the Major Markets, volatility reigned but ended with a mixed finish. U.S. equities wrapped up a rollercoaster week on a subdued note, as tech-driven swings and uncertainty over Federal Reserve policy overshadowed broader gains in defensive sectors. The Morningstar US Market Index dipped 0.09% for the period, reflecting a cautious close amid broader economic jitters. The tech-heavy Nasdaq eked out a 0.1% gain on Friday after erasing earlier losses, while the S&P 500 shed 0.1% and the Dow Jones Industrial Average slipped further, capping a volatile session. Thursday’s trading marked the worst single day decline since early in the year, with stocks tumbling on fading hopes for a December rate cut. Healthcare led the winners, surging 3.6%, buoyed by positive earnings and sector resilience, while energy climbed 2.53% on stabilizing oil prices. Globally, some markets echoed the unease: Australia’s S&P/ASX 200 fell 1.5% amid fears of a broader meltdown tied to U.S. rate cut delays. Bonds saw yields rise slightly, with the 10-year Treasury hovering around 4.2%, as investors priced in persistent inflation risks.

Speaking of Inflation, CPI (October): Released November 13, showing core inflation at 3.2% Year over Year, slightly hotter than expected, fueling rate cut skepticism. PPI (October): November 14 data indicated a 2.8% YoY rise in wholesale prices, underscoring service-sector pressures. Acknowledging the need to provide relief, President Trump moved to lower tariffs on beef, coffee and other goods, a significant rollback of his levies that comes as cost-of-living concerns rise.

So, is the Fed going to cut rates as expected? The Fed’s November meeting delivered a narrow victory for doves, with a 10-2 vote to trim the federal funds rate by 25 basis points to a 4.50%-4.75% range, signaling continued easing amid cooling inflation but persistent labor market strength. However, the week brought fresh headwinds: Markets slashed odds of a December cut from near-certainty to about 60%, as officials like New York Fed President John Williams highlighted “cracks in the AI narrative” and robust economic data in speeches on November 7 and 12. The semiannual Financial Stability Report, released November 7, underscored vulnerabilities in banking and crypto sectors but affirmed overall system resilience. Looking ahead, Vice Chair Philip N. Jefferson’s speech on November 9 emphasized a data-dependent path, with the next FOMC meeting in December under scrutiny. Daily H.15 interest rate data through November 14 showed stable short-term yields, but longer-end pressures persist.

This added additional pressure to the biggest laggard, which is mortgage rates, unfortunately for home buyers, they are still holding steady amid easing signals. Mortgage rates ticked lower but remained elevated, reflecting the Fed’s recent cut offset by sticky inflation reads. The average 30-year fixed-rate mortgage stood at 6.07% as of November 15, down slightly from 6.24% earlier in the week, per Zillow data. Freddie Mac reported rates essentially flat for the week ending November 13, at around 6.18%, with purchase applications up modestly positive signs for housing amid affordability strains. The 15-year fixed rate averaged 5.54%-5.63%, offering a hedge for refinancers. Forecasts point to stability through year-end, but any December Fed pause could nudge rates higher toward 6.25%.

Government Shutdown? Relief at last after 42 days. The curtain finally fell on the 2025 U.S. federal government shutdown, which began October 1 and lasted 42 days, 22 hours, and 25 minutes—the longest in history. President Trump signed a bipartisan funding package late on November 12 (effective November 13), averting deeper economic scars and restoring operations through January 31, 2026. Over 670,000 federal employees missed paychecks, with impacts rippling to contractors and services like TSA, Air Traffic Controllers, national parks and food assistance. Anybody flying last week?

The deal included short-term Medicare extensions and prioritized backlogged data releases, but partisan finger-pointing lingers—Democrats decried it as a Trump capitulation, while Republicans hailed the end of a “Democrat shutdown.” Markets breathed a sigh of relief, though the episode shaved an estimated 0.2% off Q4 GDP growth.

Now that it is over an Economic Data Deluge has begun, as shutdown delayed reports flooded in. The shutdown’s end unlocked a torrent of pent-up data, with the Labor Department urged to fast-track November’s employment and CPI figures—critical for Fed decisions. Key releases from November 9-15 included the Initial Jobless Claims: Weekly figure for November 9 ticked up to 220,000, signaling labor market softening but resilience. Industrial Production, releasing the Fed’s G.17 report on November 14 showed 0.3% monthly growth, beating forecasts amid manufacturing rebound.

BLS schedules confirmed no major disruptions post-reopening, though some revisions loom. The Conference Board’s November Economy Watch projected 1.8% YoY growth for 2025, tempered by shutdown fallout. Full calendars are available via FRED and Trading Economics for deeper dives.

Our outlook is cautious optimism ahead, we still like value, emerging markets and Europe. With the shutdown behind us and data flowing, attention shifts to Thanksgiving-week releases like durable goods orders and the jobs report. Markets eye a potential Fed pause in December, but resilient growth could keep rates in check. Stay tuned volatility may ease, but uncertainty endures. 2025 so far has been one for the ages. We still have yet to feel the impact of the tariff income, foreign investments and the restoration of the US manufacturing base all on tap for 2026.

Finally, from Market Watch, “The annual announcement from the Internal Revenue Service may have extra significance in 2026, as 401(k) contributions become a valuable tool many can use to ensure they’re making the most of new tax breaks in President Donald Trump’s new tax law. Workers can save up to $24,500 next year in their 401(k)s, as well as other tax-deferred accounts, including 403(b), 457 plans and the federal government’s Thrift Savings Plan, the IRS said Thursday. That’s up from a $23,500 contribution maximum this year. Individual savers are getting extra space to tuck away more. People putting money into traditional IRAs can contribute up to $7,500 — an increase from the $7,000 maximum this year. The IRS announces contribution limits on retirement accounts every year. The numbers are indexed to rise with inflation, as are tax brackets and the income levels that trigger certain capital-gains tax rates.”

Mike