After a 43-day shutdown, the US financial market finally received fresh inflation data, but the joy from the 'beautiful' figure of 2.7% is slightly overshadowed by its statistical purity. We are faced with a unique situation: the October data has simply been erased from history, and the November report, although it looks like a balm for the investor's soul, carries too much 'noise'. Nevertheless, the stock indices preferred not to dampen their spirits and seized on the positive, sending S&P 500 and Nasdaq futures into the green sector.
The logic of the market is now absurdly simple: if inflation has slowed down (even if we don't quite understand how exactly it did so in October), it means that the Fed's hands are untied. Especially since the labor market is starting to send clear signals of overheating. The rise of unemployment to 4.6% — the highest level in the last four years — turns the Fed from an inflation hunter into a savior of the economy. Investors are already trying on scenarios for interest rate cuts in March and July of next year, while the political backdrop only adds fuel to the fire. The expected reshuffles in the leadership of the Central Bank, initiated by the Trump administration, unequivocally hint at an era of cheap money, which keeps the dollar from sharp movements, while the yield on 10-year bonds hovers around a moderate 4.14%.
However, behind the overall facade of market optimism lies a deep rift that is clearly visible in corporate reports. On one pole, we see the triumph of high technology and AI. Micron Technology, which soared by 16% after a stellar quarterly report, and Oracle, which gained amid a strategic deal with TikTok, show that AI hype is still real fuel for growth. These companies exist in a world where demand for computing power overrides any macroeconomic risks. The technology sector remains a safe haven where capital flows in search of real profits, rather than just statistical hopes.
On the other pole, in the world of real retail and global logistics, the picture looks far less festive. The drop in Nike's shares by more than 10% was a cold shower for those who believed in a swift recovery of the consumer sector. Weak sales in China and pressure from new tariffs on margins are the very 'gray swans' that begin to emerge from the shadows. When sneakers become more expensive to produce, and a buyer in Beijing or Shanghai tightens their belt, no promises of interest rate cuts from the Fed will help restore net profits here and now. A similar situation is observed in the logistics giant FedEx, whose results failed to impress investors, once again confirming that the pulse of global trade beats unevenly.
Completing this ambiguous picture is the state of real production within the country. The manufacturing activity indices from the Kansas City and Philadelphia Fed show a decline, with negative dynamics in Philadelphia observed for the third consecutive month. While financial magnates in New York celebrate their 'victory' over inflation, factory floors in the hinterland report a decrease in orders and production. We see a strange symbiosis: financial markets, buoyed by political expectations and AI euphoria, are detached from the manufacturing reality, which is beginning to stall under the weight of uncertainty and tariff threats. Ultimately, the market will have to decide what is more important — beautiful numbers in regulatory reports or the real state of consumers' wallets and machines in factories.