By: Jose Torres, Senior Economist
Stocks have erased November’s losses during today’s shortened trading session, as confidence of a December rate cut coincides with favorable seasonals for markets. The reopening of the government additionally boosted optimism of an economic reacceleration in 2026, while strong results on the corporate earnings front helped bulls keep AI doubters and valuation hawks alike at bay while the technical damage in the charts was repaired. The most significant risk to the cycle at this juncture is rising unemployment but subdued jobless claims alongside an expectation that monetary policy accommodation will generate increased hiring is supporting sentiment. The positive backdrop has participants raising long exposures and positioning for a potential Santa Claus rally with every major sector and domestic benchmark in the equity space advancing minus healthcare. Stronger growth prospects are motivating gains across the commodity complex excluding lumber, which is declining in response to climbing yields that cause pricier mortgage payments and disincentivize new construction. The Treasury curve is ascending in bear-steepening fashion, led north by duration, and the greenback is depreciating in value as well. Recovering animal spirits are driving folks into bitcoin and forecast contracts, however, enthusiastic attitudes on Wall Street are lowering the premiums for volatility protection instruments.
Black Friday is Sensitive to Tariffs
With the delay of government statistics clouding the outlook for growth and consumer spending, Black Friday numbers will be a topic of conservation as we begin a new month on Monday. Analysts and economists alike will be watching the expenditure totals for signs of where we are in the cycle, but another less significant focus will be on tariffs. As folks walk up, down and across shopping malls, the impact that levies are having on the depth of discounts will be top of mind. The dynamic is especially meaningful considering that household finances have been under pressure from persistent inflation, elevated interest rates and reduced job openings, as indicated by sharp plunges in sentiment and in the results and guides of firms that cater to budget-conscious shoppers.
Originally posted on November 28, 2025 on Traders’ Insight
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