U.S Market (1st Dec. 2025)

For investors tracking U.S. equities, bonds, and FX

Global Macro Overview

• Global PMIs (Nov): Manufacturing 50.3, Services 51.1 → global activity remains in slow-expansion mode.
• Global inflation pulse: Headline inflation easing across major economies; core inflation still sticky.
• Liquidity: Global M2 growth has turned positive for 3 consecutive months, suggesting early recovery in global liquidity conditions.
• Commodities: Oil trading in the $78–82 range keeps energy inflation contained.

U.S. Macro

1) Labor Market — This Week’s Main Event

• Consensus for Nov Jobs Report:
  • Nonfarm Payrolls: +140k–155k
  • Unemployment: 4.3% → 4.4%
  • Wage Growth: 3.4–3.6% YoY

Why it matters:
Recent Fed speeches emphasize “proceed carefully.”

• A soft labor print → increases odds of a January rate cut.
• A hot labor print → pushes easing into March or later.

This report directly shapes the rate path and market direction.

2) Inflation & Fed Policy

• Core CPI nowcast: ~3.1%
• Core PCE: ~3.0%
• Fed Funds Rate: 3.75–4.00%

Narrative:
The Fed acknowledges disinflation but warns the “last mile” to 2% is slow.
Markets expect 2–3 rate cuts in 2026, down from the 4+ cuts priced earlier in the year.

3) Equity, Bond, and Credit Tone

• Equities: Trading near cycle highs; earnings revisions stabilizing.
• Credit:
  • IG Spread: ~110 bps
  • HY Spread: ~380–400 bps
    → Credit markets show no systemic stress.
• Yield Curve: 2s/10s steepening to around +20–30 bps,
  → signaling normalization rather than recession.

4) Policy Watch — Trump Administration

• Expected December tiered tariff framework (5–10% baseline; selective higher brackets).
• Fiscal policy remains expansionary, raising medium-term concerns for long-term Treasury supply and yields.
• Immigration tightening could raise wage inflation in 2026.

Final Takeaway

The U.S. economy continues to soften but not break.
Inflation is easing gradually, liquidity is improving, and credit remains stable — but policy uncertainty is real.
Quality large caps, cash-flow-stable companies, and defense/infrastructure themes remain well positioned.

(This content is not investment advice. Investors are responsible for their own decisions.)