November 5, 2025: Special Edition: Tug of War

 

This week's newsletter kicks off our monthly spotlight from our Investment Team expert, David Meier.  David shares trends and forecasts, combining experience and research for a personal, informed market perspective.

US Equity markets continue to record all-time highs. This has been a stunning reversal from the market depths seen in the wake of April’s global trade recalibration.  The turnaround has been largely driven by the optimism surrounding the advancements in artificial intelligence, quantum computing, and power generation.  While the progress we see in AI is very much a real and unprecedented technological phenomenon, it is still yet to be determined how much investment is required to meet the ambitions of the industry architects.

Figure 1: S&P 500 Price Index1 

 

1JPMorgan Guide to the Markets – Oct 2025

2Wall Street Journal – Oct 10, 2025

Tug of war: AI investment growth vs. consumer finances. Investors have enjoyed strong gains in the stock market over the last few years, but the effects of higher costs of living and sustained inflation have outpaced wage and investment portfolio growth, resulting in stretched household finances. We have seen relief in areas like grocery prices, where inflation has fallen by 1.3%, however, price levels remain near two-year highs.  Figure 2 highlights the upward trend in auto loan delinquencies, an early indicator of a weaker consumer.  This doesn’t necessarily mean recession, but consumer health is a key indicator we’re following to help manage risk.

Figure 2: Portion of Auto Loans Receivables > 60 Days Delinquent2

 

 

What we’re watching: We continue to look for signs of deteriorating fundamentals in the economy, with a weakening consumer as just one example of a leading indicator.  AI is revolutionary, but paradigm shifts rarely follow a straight line.

For the week of Nov 3rd, 2025, list the U.S. economic calendar, releasing several key reports, and on which day:

 

Monday, November 3rd:

  • ISM Manufacturing PMI, Construction Spending for September.

Tuesday, November 4th:

  • JOLTs Job Openings 

Wednesday, November 5th:

  • ADP Employment Report for October (a private-sector gauge of payrolls).

Thursday, November 6th:

  • Weekly Jobless Claims (Initial and Continuing).

Friday, November 7th:

  • Employment Situation, Consumer Credit for September.