The Pulse on the Economy and Capital Markets: November 2025

To Summarize: After October’s rally, investors have taken profits in both stocks and bonds, despite strong corporate earnings driven by AI growth. Consumer sentiment has dropped sharply due to government shutdowns and headline layoffs, but spending remains steady. The cumulative impact of inflation, nearly 30%, since 2020 continues to strain household budgets.  

The big takeaway – The government shutdown and layoffs have caused consumer confidence to drop to lowest levels since the 1980s.   

In the Markets: Global markets kicked off November with a risk-off sentiment, with the Nasdaq and Emerging Markets leading declines. Bonds, commodities, and crypto face a similar weakness, down 5% for the month. Despite muted market performance, the S&P 500 earnings remain robust, with over 80% of companies surpassing expectations and more than 65% beating sales expectations. Earnings growth is expected to broaden beyond the Magnificent 7, driven by AI innovation and resilient corporate fundamentals. 

A Tale of Two Wallets: As the government remains shutdown and headline layoffs continue, consumer sentiment has reached lows not seen since the early 1980s recessions. Lower-income consumers are experiencing significant financial stress despite a growing economy. Even with inflation pressures, spending has held steady driven by the top 10% of earners. On the flip side, rising student loan delinquencies have prompted reductions in discretionary purchases, such as travel, home furnishings, and clothing.  

The Collective Impact of Inflation: Inflation is once again on the rise, intensifying financial pressures even though it remains below its peak from earlier this year. The overall impact over the past few years has caused prices to surge nearly 30% since 2020. This has caused a significant strain on household budgets and fueling widespread consumer frustration on everyday spending.  

Top Headlines: We’re reading about how U.S. apartment prices have fallen for the third straight month, AI is rewriting the internet making browsers hot again, Chinese automakers are overtaking European rivals, and the secret truth behind the ESPN-YouTube TV feud. 

Related resources:

• Commercial Real Estate: U.S. apartment prices fall for third straight month amid easing occupancy 
• Tech/AI: AI is making the browser hot again – and rewriting the internet economy  
• Autos: Chinese automakers are overtaking European rivals  
• Media: The secret truth of the ESPN-YouTube TV feud 

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