November’s wickedly spectacular volatility — followed by an equally dramatic rebound — will no doubt leave a few market casualties in its wake. But beneath all the fireworks, the fundamentals held their ground. Our indicators remain composed, and Sowell’s technical gauges are standing firm and fully invested… at least for now.
As the curtain closes on November, we can officially declare that Stocks Climb Every Mountain in November. And while the spotlight has been intensely focused on the Wicked theme, this past week felt like a sudden, glorious homecoming for the Sound of Music.
In just three and a half trading days, the market ditched the tryptophan-induced coma and delivered one of the most stunning holiday-shortened rallies in memory. The benchmark S&P 500, not one for subtlety, spiked a formidable +3.74% for the week. This isn't just a win; it’s a comeback story that erased what was shaping up to be a losing November, allowing the index to close the month with a slight but symbolic +0.25% gain. The tech-heavy Nasdaq Composite was even more exuberant, soaring +4.91% weekly, though even that heroic lift wasn't enough to fully undo the recent AI rout, leaving it slightly underwater for the month at -1.45% largely due to index heavyweight NVIDIA’s 12.5% decline for the month.
Bad News is Good News, Again
The primary engine of this rally was a predictable yet powerful cocktail of weak economic data and renewed Fed hope. The market is now pricing in a near-certain rate cut in December, and the data supported this narrative beautifully.
The labor market is officially flagging, with ADP's Weekly Private Sector Employment reporting an average weekly decline of 13.5k jobs. Inflationary pressure is also cooling its jets: the Core Producer Price Index (YoY) eased to 2.6%, below both forecasts and the prior month’s 2.9%. While the headline PPI rose 0.3% MoM (in line with estimates), the signal was clear: the Fed has the cover it needs.
Throw in the soft consumer prints—the Consumer Confidence Index for November slumped nearly 7 points to 88.7 (its lowest since April), and New Durable Goods Orders (ex-Defense) barely budged at a 0.1% gain—and you have the perfect recipe for fixed-income celebration. Treasury traders wasted no time, contracting the 10-year yield to 4.02% and the 20-year to 4.62% on the expectation of a December pivot.
The Leadership: Big Tech & Big Banks
The internal market dynamics were all about rotation and rebound. While the market’s recent bogeyman, NVIDIA, spent the month in the penalty box, clocking a -12.5% decline in November, other heavyweights stepped up to the plate. This was a record week for several market titans:
Alphabet (+6.85%): The AI counter-narrative found its feet, buoyed by confidence in their recent Gemini model updates and a flight from reports of companies like Meta potentially using Google’s A.I chips, TPU.
Broadcom (+18.45%): A classic “rising tide lifts all boats” for a crucial infrastructure player, showing that underlying digital transformation spending remains relentless and benefiting from the Google A.I. tailwind.
JPMorgan (+5.05%): The big banks didn't miss out on the action, catching a tailwind from the potential stability offered by a less hawkish Fed.
Spending Trumps Sentiment
Perhaps the most humorous paradox of the week was the gap between what consumers said and what they did. While the Consumer Confidence Index was dreadful, the actual wallets were wide open. Black Friday set a record with $11.8 billion in sales, a healthy 9% increase from last year. Overall retail sales rose 4.1% over last year.
The market, clearly, decided to ignore the hand-wringing on Tuesday and focus on the cold, hard cash registers ringing on Friday.
As we look ahead to the final month of 2025, the calendar is already marked with a high-stakes event: the last FOMC meeting on Dec. 9th. For the week ahead, all eyes will be glued to Industrial Production, Factory Orders, and the weekly jobless claims to see if the consumer can continue to carry the torch and prove that Thanksgiving was more than just a sugar rush. This is shaping up to be a fascinating December.
"Greatness does not come about through accumulating great amounts of money, great amounts of publicity or great power in government. When you help someone in any of thousands of ways, you help the world. Kindness is costless but also priceless. Whether you are religious or not, it’s hard to beat The Golden Rule as a guide to behavior.”
—Warren Buffett, Thanksgiving Message, Nov 10, 2025.
Investors May Underappreciate Real Risk from Tariffs
Phillip Wool, Ph.D.
“It’s now a question of, is it the manufacturer, is it the retailers, or is it the small business that’s bringing [goods] in? They now have to figure out, ‘How much of this can I take on, and how much of this will I pass on?’ It’s very likely they will pass the bulk of it on.”
—Olu Sonola, Head of US Economic Research at Fitch Ratings, interviewed by CNN
Among the macro themes at the front of investment strategists’ minds in 2025 has been Trump 2.0 trade policy, the impact this year’s tariffs could have on the economy, and, ultimately, how that will play out in investors’ portfolios. Before and immediately after a “Liberation Day” onslaught of levies on goods from countries across the globe, most pundits speculated new trade frictions—what amount to the biggest US tariffs in nearly a century—would exert a “stagflationary” influence: boosting prices and simultaneously stunting economic growth. Those fears led to an early-April selloff in stocks as traders priced in economists’ worst fears.
That reaction turned out to be premature. Prices did not immediately skyrocket, growth didn’t slump, and stocks—both in the US and, even more so, in international markets—bounced back sharply. In part, that’s because the big “headline” tariff announcements gradually gave way to delays, temporary reprieves, and the kind of high-profile dealmaking President Trump clearly relishes. In time, investors taking stock of how threats of a trade war in principle were actually playing out in practice came to strongly discount the likelihood of a trade-induced recession.
Of course, in the months since tariff talk began, we’ve had a chance to observe plenty of data beyond CPI and GDP, and some of what we’re seeing casts doubt on the bullish narrative that investors ought to always “buy the dip” because tariffs aren’t so bad after all. For one thing, while the Trump administration has been open to delaying levies and cutting deals, effective tariffs, even accounting for that slack in the policy, are nonetheless extremely high. At the end of October, the Yale Budget Lab estimated overall average effective tariffs at 17.9%, the highest level since 1934.
More granular data on prices show, moreover, that those historically high barriers to trade are having an impact. Data from the Harvard Pricing Lab, plotted below, show prices on imported goods into the US steadily climbing since the Q1 imposition of tariffs on Mexico, Canada, and China, reversing a negative trend going into this year. What’s even more interesting is that domestic US goods prices, which one might imagine wouldn’t inflate as protectionist policies made them more competitive, actually have risen, staying just a tad cheaper than their imported counterparts. Tariffs’ toll on import prices has effectively given US manufacturers cover to boost their own margins, and they’ve understandably taken advantage.
One reason the impact on inflation has been fairly muted so far is that US companies, going into the year with healthy margins themselves and bigger inventories from an effort to front-run “Liberation Day,” decided to absorb a good chunk of rising prices themselves—Goldman Sachs estimates firms ate just over half of the new tariff costs through August—shielding consumers at the expense of their own profitability. But that’s no more than a temporary fix, essentially a bet that the trade war will be short-lived, which must inevitably give way as investors penalize stocks whose earnings growth has stalled. Likewise, the inventory of pre-tariff goods imported earlier this year is, at this point, likely largely spent, making it that much harder for firms to keep prices low.
Now, as companies find it harder to contain the influence trade policy has on prices, the impact ultimately plays into another big macro theme this year: the Fed’s plans for continued rate cuts in US policy. If inflation does begin to bite, that could put a damper on plans to keep easing, reducing accommodation as consumers feel the pain of higher prices and US companies see profits fall further. And it’s obvious that investors have concerns about the FOMC’s endgame. We saw it in mid-November, when Minneapolis Fed President Neel Kashkari rattled markets with a mere mention of doubts about whether a December cut was warranted.
But how worried are investors that trade policy could lead to this sort of economic reckoning? Back in April, when tariff fears were front and center, traders seemed attuned to such risk: 80% of money managers surveyed by Bank of America nominated a “global recession triggered by a trade war” as the top tail risk facing the markets. By October, however, only 5% of respondents still thought that was the biggest risk. Now that the US government has emerged from its shutdown and new statistics are rolling in, investors might want to reevaluate. Data from the Commerce Department released in mid-November, for example, showed imports of goods and services to the US fell by 5.1% in August—just the first month, we note, in which new tariffs on around 90 countries went into effect.
Disclosure: This material is for informational purposes only and should not be considered investment advice. An investor should consult with their financial professional before making any investment decisions. The opinions contained herein are subject to change without notice and do not necessarily reflect the opinions of Rayliant Investment Research. Indices cannot be invested in directly and are unmanaged.
Advisory services offered through Sowell Management, a Registered Investment Advisor. The views expressed represent the opinion of Sowell Management. The views are subject to change and are not intended as a forecast or guarantee of future results. This material is for informational purposes only. It does not constitute investment advice and is not intended as an endorsement of any specific investment. Stated information is derived from proprietary and non-proprietary sources that have not been independently verified for accuracy or completeness. While Sowell Management believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability. Statements of future expectations, estimates, projections, and other forward-looking statements are based on available information and Sowell Management’s view as of the time of these statements. Accordingly, such statements are inherently speculative as they are based on assumptions that may involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those expressed or implied in such statements. Investing in securities involves risks, including the potential loss of principal. While equities may offer the potential for greater long-term growth than most debt securities, they generally have higher volatility. International investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles, or from economic or political instability in other nations. Past performance is not indicative of future results.
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WEEK AHEAD
December 1-5, 2025
Stocks in November Climb Every Mountain…
As the curtain closes on November, we can officially declare that Stocks Climb Every Mountain in November. And while the spotlight has been intensely focused on the Wicked theme, this past week felt like a sudden, glorious homecoming for the Sound of Music.
In just three and a half trading days, the market ditched the tryptophan-induced coma and delivered one of the most stunning holiday-shortened rallies in memory. The benchmark S&P 500, not one for subtlety, spiked a formidable +3.74% for the week. This isn't just a win; it’s a comeback story that erased what was shaping up to be a losing November, allowing the index to close the month with a slight but symbolic +0.25% gain. The tech-heavy Nasdaq Composite was even more exuberant, soaring +4.91% weekly, though even that heroic lift wasn't enough to fully undo the recent AI rout, leaving it slightly underwater for the month at -1.45% largely due to index heavyweight NVIDIA’s 12.5% decline for the month.
Bad News is Good News, Again
The primary engine of this rally was a predictable yet powerful cocktail of weak economic data and renewed Fed hope. The market is now pricing in a near-certain rate cut in December, and the data supported this narrative beautifully.
The labor market is officially flagging, with ADP's Weekly Private Sector Employment reporting an average weekly decline of 13.5k jobs. Inflationary pressure is also cooling its jets: the Core Producer Price Index (YoY) eased to 2.6%, below both forecasts and the prior month’s 2.9%. While the headline PPI rose 0.3% MoM (in line with estimates), the signal was clear: the Fed has the cover it needs.
Throw in the soft consumer prints—the Consumer Confidence Index for November slumped nearly 7 points to 88.7 (its lowest since April), and New Durable Goods Orders (ex-Defense) barely budged at a 0.1% gain—and you have the perfect recipe for fixed-income celebration. Treasury traders wasted no time, contracting the 10-year yield to 4.02% and the 20-year to 4.62% on the expectation of a December pivot.
The Leadership: Big Tech & Big Banks
The internal market dynamics were all about rotation and rebound. While the market’s recent bogeyman, NVIDIA, spent the month in the penalty box, clocking a -12.5% decline in November, other heavyweights stepped up to the plate. This was a record week for several market titans:
Spending Trumps Sentiment
Perhaps the most humorous paradox of the week was the gap between what consumers said and what they did. While the Consumer Confidence Index was dreadful, the actual wallets were wide open. Black Friday set a record with $11.8 billion in sales, a healthy 9% increase from last year. Overall retail sales rose 4.1% over last year.
The market, clearly, decided to ignore the hand-wringing on Tuesday and focus on the cold, hard cash registers ringing on Friday.
As we look ahead to the final month of 2025, the calendar is already marked with a high-stakes event: the last FOMC meeting on Dec. 9th. For the week ahead, all eyes will be glued to Industrial Production, Factory Orders, and the weekly jobless claims to see if the consumer can continue to carry the torch and prove that Thanksgiving was more than just a sugar rush. This is shaping up to be a fascinating December.
Investors May Underappreciate Real Risk from Tariffs
Phillip Wool, Ph.D.
“It’s now a question of, is it the manufacturer, is it the retailers, or is it the small business that’s bringing [goods] in? They now have to figure out, ‘How much of this can I take on, and how much of this will I pass on?’ It’s very likely they will pass the bulk of it on.”
—Olu Sonola, Head of US Economic Research at Fitch Ratings, interviewed by CNN
Among the macro themes at the front of investment strategists’ minds in 2025 has been Trump 2.0 trade policy, the impact this year’s tariffs could have on the economy, and, ultimately, how that will play out in investors’ portfolios. Before and immediately after a “Liberation Day” onslaught of levies on goods from countries across the globe, most pundits speculated new trade frictions—what amount to the biggest US tariffs in nearly a century—would exert a “stagflationary” influence: boosting prices and simultaneously stunting economic growth. Those fears led to an early-April selloff in stocks as traders priced in economists’ worst fears.
That reaction turned out to be premature. Prices did not immediately skyrocket, growth didn’t slump, and stocks—both in the US and, even more so, in international markets—bounced back sharply. In part, that’s because the big “headline” tariff announcements gradually gave way to delays, temporary reprieves, and the kind of high-profile dealmaking President Trump clearly relishes. In time, investors taking stock of how threats of a trade war in principle were actually playing out in practice came to strongly discount the likelihood of a trade-induced recession.
Of course, in the months since tariff talk began, we’ve had a chance to observe plenty of data beyond CPI and GDP, and some of what we’re seeing casts doubt on the bullish narrative that investors ought to always “buy the dip” because tariffs aren’t so bad after all. For one thing, while the Trump administration has been open to delaying levies and cutting deals, effective tariffs, even accounting for that slack in the policy, are nonetheless extremely high. At the end of October, the Yale Budget Lab estimated overall average effective tariffs at 17.9%, the highest level since 1934.
More granular data on prices show, moreover, that those historically high barriers to trade are having an impact. Data from the Harvard Pricing Lab, plotted below, show prices on imported goods into the US steadily climbing since the Q1 imposition of tariffs on Mexico, Canada, and China, reversing a negative trend going into this year. What’s even more interesting is that domestic US goods prices, which one might imagine wouldn’t inflate as protectionist policies made them more competitive, actually have risen, staying just a tad cheaper than their imported counterparts. Tariffs’ toll on import prices has effectively given US manufacturers cover to boost their own margins, and they’ve understandably taken advantage.
One reason the impact on inflation has been fairly muted so far is that US companies, going into the year with healthy margins themselves and bigger inventories from an effort to front-run “Liberation Day,” decided to absorb a good chunk of rising prices themselves—Goldman Sachs estimates firms ate just over half of the new tariff costs through August—shielding consumers at the expense of their own profitability. But that’s no more than a temporary fix, essentially a bet that the trade war will be short-lived, which must inevitably give way as investors penalize stocks whose earnings growth has stalled. Likewise, the inventory of pre-tariff goods imported earlier this year is, at this point, likely largely spent, making it that much harder for firms to keep prices low.
Now, as companies find it harder to contain the influence trade policy has on prices, the impact ultimately plays into another big macro theme this year: the Fed’s plans for continued rate cuts in US policy. If inflation does begin to bite, that could put a damper on plans to keep easing, reducing accommodation as consumers feel the pain of higher prices and US companies see profits fall further. And it’s obvious that investors have concerns about the FOMC’s endgame. We saw it in mid-November, when Minneapolis Fed President Neel Kashkari rattled markets with a mere mention of doubts about whether a December cut was warranted.
But how worried are investors that trade policy could lead to this sort of economic reckoning? Back in April, when tariff fears were front and center, traders seemed attuned to such risk: 80% of money managers surveyed by Bank of America nominated a “global recession triggered by a trade war” as the top tail risk facing the markets. By October, however, only 5% of respondents still thought that was the biggest risk. Now that the US government has emerged from its shutdown and new statistics are rolling in, investors might want to reevaluate. Data from the Commerce Department released in mid-November, for example, showed imports of goods and services to the US fell by 5.1% in August—just the first month, we note, in which new tariffs on around 90 countries went into effect.
Disclosure: This material is for informational purposes only and should not be considered investment advice. An investor should consult with their financial professional before making any investment decisions. The opinions contained herein are subject to change without notice and do not necessarily reflect the opinions of Rayliant Investment Research. Indices cannot be invested in directly and are unmanaged.
Advisory services offered through Sowell Management, a Registered Investment Advisor. The views expressed represent the opinion of Sowell Management. The views are subject to change and are not intended as a forecast or guarantee of future results. This material is for informational purposes only. It does not constitute investment advice and is not intended as an endorsement of any specific investment. Stated information is derived from proprietary and non-proprietary sources that have not been independently verified for accuracy or completeness. While Sowell Management believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability. Statements of future expectations, estimates, projections, and other forward-looking statements are based on available information and Sowell Management’s view as of the time of these statements. Accordingly, such statements are inherently speculative as they are based on assumptions that may involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those expressed or implied in such statements. Investing in securities involves risks, including the potential loss of principal. While equities may offer the potential for greater long-term growth than most debt securities, they generally have higher volatility. International investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles, or from economic or political instability in other nations. Past performance is not indicative of future results.