Weekly Macro Report, November 9 2025

1. Economic Growth & Outlook

The S&P 500 is near 6,720 in November 2025, up roughly 13.4% year-over-year, reflecting solid market momentum. U.S. GDP expanded at a strong annualized rate of 3.8% in Q2 2025, supported by consumer spending and fixed investment. The Federal Reserve’s effective funds rate stands at 3.87%, with futures indicating a gradual easing path ahead. This suggests the Fed is balancing growth risks with inflation, signaling moderate near-term expansion, tempered labor market gains, and cautious inflation control.

2. Labor Market

The U.S. unemployment rate ticked up to 4.3% in August 2025, having edged higher from 4.2% in July, the highest since late 2021; the workforce expanded modestly while the long-term unemployed held steady at 1.9 million. This recent uptick from early-2025’s 4.0%–4.2% range, combined with stable participation and only minor wage pressure, suggests labor markets remain tight but face new headwinds, likely pushing the Fed toward a more cautious stance on rates, especially if upcoming data confirm a persistent rise in joblessness.

3. Interest Rates

As of November 7, 2025, the 10-year Treasury yield rose to 4.10%, reflecting recent market volatility. Investment grade corporate yields stood at 4.83% on November 6, indicating stable but elevated borrowing costs for businesses. The spread between BBB-rated corporate bonds and Treasuries reached 1.72%, signaling moderate risk premiums for investors amid ongoing economic uncertainty.

4. Yield Spreads

As of November 7, 2025, the US yield curve remains modestly positive with the 10-year minus 2-year spread at 0.56%, signaling moderate growth expectations. The 10-year TIPS real yield stands at 1.80%, consistent with steady inflation-adjusted returns and subdued real growth optimism. US credit spreads have remained narrow, reflecting resilient investor appetite for risk amid ongoing economic uncertainties.

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5. Inflation Dynamics

As of September 2025, U.S. headline CPI rose 3.0% annually, with core CPI also at 3.0%, driven by shelter and energy costs. The Producer Price Index advanced 2.6% year-over-year in August, signaling continued input cost pressure. The 10-year breakeven rate, which signifies expected inflation priced into TIPS bonds, stood at 2.33% as of July 9, 2025, reflecting stable long-term inflation expectations.

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6. Money Supply

The M2 money supply reached a record $22.2 trillion in September 2025, growing 4.5% year-over-year and 0.5% month-over-month, below the 6.3% average growth of the past 25 years. Meanwhile, headline CPI inflation rose 3.0% year-over-year in September, slightly above the 2.1% real GDP growth in Q2 2025. The current M2 expansion, driven by increased demand deposits and market fund balances concentrated among major asset managers, is moderate but outpaced by inflation and GDP, suggesting liquidity is growing somewhat restrictively relative to economic activity and inflationary pressures persist.

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7. Consumer Sentiment

In November 2025, the University of Michigan Consumer Sentiment fell to 50.3 from 53.6 in October, with Expectations declining to 49.0, narrowing the typical negative spread to -1.3 points and signaling cautious consumer outlooks amid economic uncertainty. The Current Economic Conditions index dropped to 52.3, marking historic lows driven by personal finance pessimism. Meanwhile, the US Treasury yield curve spread between 10-year and 2-year bonds remained positive at approximately 0.56%, reflecting moderate macroeconomic confidence despite softer household sentiment. This divergence underscores differing micro and macroeconomic lenses on future growth.

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8. Housing Market

Home prices held steady in September at a median of $415,200, up 2.1% year-over-year. Existing-home sales totaled 4.06 million in September, with inventory at 4.6 months, the highest in years. Mortgage rates ended October near 6.17%, the lowest in over a year. The combination of rising inventory, stable prices, and lower rates is improving buyer leverage but affordability remains constrained.

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9. Stock Market Sectors

As of early November 2025, Technology led all sectors with a 6.7% gain, driven by continued AI momentum and strong earnings from mega-cap names. Financials and Energy also outperformed, rising 4.4% and 4.3% respectively, supported by robust bank results and oil sector strength. Health Care lagged, down 3.0%, pressured by regulatory concerns and weak sentiment. Industrials and Communication Services were also weak, falling 4.4% and 3.0%, as cyclical and media stocks struggled.

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10. Stock Market Valuation

As of early November 2025, the S&P 500 PE ratio stands near 28, while the Shiller PE hovers around 39, both elevated versus their long-term averages. The Buffett Indicator remains elevated above 200%, indicating market cap well above GDP. Internationally, US equities trade at a premium to global peers, driven by persistent outperformance in mega-cap tech and resilient earnings growth. Richer US valuations also reflect higher profit margins, innovation leadership, and more favorable capital markets compared to slower-growing regions.

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11. Stock Market Internals

As of early November 2025, the VIX index stands around 19.1–19.5, up roughly 8% from two days earlier when it was near 17.4, signaling a moderate rise in expected near-term volatility. Momentum and Growth factors continue to lead returns, while Value and Quality lag, with Small Cap and Minimum Volatility showing mixed performance. This increase in volatility amidst factor dispersion suggests cautious positioning amid underlying market uncertainty and a preference for selective risk-taking rather than broad risk aversion.

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12. Global Equity Performance

In Q3 2025, US equities led developed markets with the S&P 500 rising 8.1%, supported by a 25 basis point Fed rate cut and surging AI-driven tech investments, pushing the index to new highs. Japan’s Topix outperformed regional peers, driven by export resilience and corporate reforms amid stable currency conditions. Emerging markets, notably China, surged over 10% in the quarter, propelled by weakening US dollar and renewed investor interest despite lingering geopolitical risks, illustrating a rotation towards growth fueled by AI and emerging market exposure.

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13. Commodities

Gold gained approximately 52.5% year-to-date, peaking near $4,400 per ounce in October before settling around $4,000 in early November 2025. This surge was driven by central bank buying, inflation concerns, and safe-haven demand amid geopolitical tensions. Silver rose about 68.5% year-to-date, hitting a historic intraday high of $54.47 in mid-October, supported by strong industrial demand in green energy and investment flows, before consolidating near $48 per ounce amid profit-taking and continued safe-haven attraction.

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14. Crypto Market

Bitcoin recently trades near $113,000, showing resilience amid macroeconomic uncertainty, while Ethereum stabilizes around $3,600 after a 25% pullback from its August peak near $4,900. Ethereum’s market cap approaches $400 billion, supported by growing institutional adoption and expanded Layer 2 scalability efforts. The broader crypto market reflects cautious investor sentiment amid tightening liquidity, with Bitcoin sustaining its role as digital gold and Ethereum evolving via proof-of-stake upgrades and increasing smart contract utility through decentralized finance and NFTs.

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15. Currencies

The US dollar weakened in October 2025, with EUR/USD rising to 0.8588 and USD/JPY falling to 153.35. The British Pound strengthened to 1.3145 against the dollar, while the Canadian Dollar traded at 1.4058 and the Australian Dollar at 0.6486. The Swiss Franc held at 0.8051 and the New Zealand Dollar was not available. These moves signal increased capital flows into Europe and commodity currencies, potentially pressuring US inflation and influencing global trade patterns.

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16. Debt Levels

As of September 2025, U.S. gross federal debt stands at 124.3% of GDP; domestic data for recent household and corporate ratios are unavailable, though global figures show U.S. private debt falling to 143% of GDP, near Euro Area and UK levels but below China’s 206%. Key risk: Debt service now exceeds 17% of U.S. federal spending, pressuring policymakers to address structural deficits or risk crowding out productive investment and raising yields; investors face heightened refinancing risk and potential market disruption, especially with debt growing faster than nominal GDP.

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17. Economic Calendar

In the month ahead, the November 13 Consumer Price Index release will shed light on inflation trends, directly influencing the Fed’s rate decisions. The November 7 Employment Situation report will provide critical labor market data, key for assessing economic health and wage pressures. Additionally, the November 26 second GDP estimate will clarify growth momentum. Together, these data points will guide the Federal Reserve in calibrating the federal funds target rate amid evolving inflation and growth dynamics.

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An error appeared while loading the data. Maybe there is a technical problem with the data source. Please let me know if this happens regularly @silvan_frank.