US stocks recovered as Trump blinked on higher food tariffs
·
Wall Street was also boosted by hopes of Chinese
fiscal stimulus; Trump is under huge pressure after the recent election
debacle, on the affordability crisis
·
Looking ahead, focus will also be on NVIDIA's
report card and delayed BLS data on inflation and employment
After returning from his Asia tour and the meeting
with China’s President Xi, the US President Trump faced a terrible defeat in
early November’25 regional /local election, including the NYC Mayor. One of the
major incumbent issues that worked against Trump was the higher cost of living
(affordability), including that of daily groceries and food items, as a result
of Trump's bellicose tariff policies; e.g., Trump imposed higher tariffs (50%)
on Brazilian coffee for political reasons.
On November 13, 2025, the Trump administration
advanced its "reciprocal trade" agenda with a dual announcement: four
framework agreements with Latin American partners (Argentina, Ecuador,
Guatemala, and El Salvador) to slash tariffs on key food imports, and an
executive order modifying broader reciprocal tariffs on agricultural products.
These moves, effective immediately (retroactive to midnight Nov. 13 for
exemptions), target voter concerns over grocery inflation—food CPI up 3.2% YoY
in October estimates—while securing U.S. export access. Treasury Secretary
Scott Bessent teased the deals on Wednesday as "substantial" relief
for items "we don't grow here," like coffee (+19% YoY) and bananas
(+7%).
This builds on 9 prior frameworks, 2 final pacts
(Malaysia, Cambodia), and 2 investment deals (Japan, Korea), per White House
tallies. No full FTAs yet, but these signal selective de-escalation in Trump's
protectionist push, which has raised
average U.S. import duties to a century-high via 10-50% reciprocal tariffs
since August.
U.S.
Historic Trade Deals with Western Hemisphere Partners: 10/15% vs 0% tariffs; at
par after sales tax/VAT on each other
·
Announcement: President Donald J. Trump unveils breakthrough reciprocal trade
frameworks with El Salvador, Argentina, Ecuador, and Guatemala to boost U.S.
exports, strengthen supply chains, and address unfair barriers.
·
Countries Involved: El Salvador, Argentina, Ecuador, and
Guatemala—strategic Central/South American partners.
·
El Salvador:
Streamline U.S. export (e.g., accept U.S. vehicle
standards, FDA certs for medical devices); remove agri barriers (cheese/meat
terms).
·
Argentina: Preferential
access for U.S. medicines, chemicals, machinery, IT, medical devices, vehicles,
agri goods; fix IP issues (2025 Special 301: patents, intl. alignment).
·
Guatemala: No
digital services taxes; free data flows; WTO e-transmission moratorium; ban
forced-labor imports; enforce labor/environmental laws.
·
Ecuador: High
environmental standards (WTO Fisheries Subsidies); eliminate tariffs on U.S.
tree nuts, fruits, pulses, wheat, wine/spirits; end Andean Price Band
System.
·
Boost U.S. exports for farmers, ranchers, small businesses, and
manufacturers; MFN-tariff treatment for non-producible goods from
partners.
·
Lift reciprocal tariffs on DR-CAFTA textiles/apparel (El
Salvador/Guatemala); enhance growth, jobs, supply chain resilience.
·
$2-3B annual
U.S. export boost from ~$50B two-way trade (2024 base)
·
5-10% retail price
drops on targeted items (e.g., $0.20-0.50/lb coffee)
·
Argentina's
Milei hailed it as a "cornerstone for revival"
·
Bukele (El
Salvador) called partners "friends."
·
President Trump: “These deals liberate America from unfair trade practices--prioritizing
American workers and national security."
Key
Framework Agreements with Latin America
Announced Thursday, these bilateral pacts exempt
"non-producible" U.S. imports (e.g., tropical goods) from reciprocal
tariffs in exchange for market openings on U.S. autos, machinery, meds, and ag.
Baselines (10-15%) hold on non-exempt items; full finalizations expected within
two weeks as a part & parcel of Reciprocal,
secure, and sustainable trade under CAFTA-DR.
U.S.-Argentina
Reciprocal Trade & Investment Framework: 10% vs 0%
·
US tariffs on
Argentine goods: 10%; Exempted (%) on Beef (80K-tonne quota), non-patented
pharma, natural resources
·
Argentine
tariffs on US goods: 0%; opens markets for U.S. medicines, chemicals,
machinery, IT, medical devices, vehicles, and agri products; Zero tariffs on
U.S. fruits/nuts/wine; IP reforms (patents, GIs); $20B currency swap; steel/aluminum
quotas (180K tonnes)
·
Enhanced beef
trade access for both sides.
·
Average sales
tax rate in the US:~ 7.5%; total tax of Argentine goods: 10%+7.5%= 17.5%
·
Average VAT rate
in Argentina: ~20%; total tax on US goods: 0%+20%=20%
·
Argentina removes
import licensing, consular fees, and phases out the statistical tax on U.S.
goods.
·
Accepts U.S.
safety/emissions standards for vehicles; FDA approvals for drugs/devices.
·
Stronger
enforcement vs. counterfeits & piracy (incl. digital)
·
Fixes patent
backlogs, GI issues; aligns with global standards
·
U.S. poultry
entry within 1 year; streamlined beef/pork/dairy approvals.
·
No bans on U.S.
cheese/meat trademarks.
·
Ban on
forced-labor imports; anti-illegal logging; WTO fisheries compliance.
·
Collaboration on
critical minerals & global soybean trade stability.
·
Free
cross-border data flows; no discrimination vs. U.S. digital services; U.S.
e-signatures valid in Argentina.
U.S.-Guatemala
Reciprocal Trade Framework: 10% vs 0%
·
US tariffs on
Guatemala goods: 10%; Exempted (0%) for qualified Textiles/apparel (CAFTA-DR
enhanced), select agri/foods
·
Guatemala
tariffs on US goods: 0%; Preferential U.S. agri/medicines/autos access; supply
chain pacts; regulatory streamlining
·
U.S. lifts
reciprocal tariffs on Guatemalan non-domestic resources, CAFTA-DR
textiles/apparel
·
Average sales
tax rate in the US:~ 7.5%; total tax on Guatemala goods: 10%+7.5%= 17.5%
·
Average VAT rate
in Argentina: ~12%; total tax on US goods: 0%+12%=12%
·
Guatemala streamlines
approvals for U.S. pharma, medical devices, & autos (accepts U.S.
standards, electronic certs; no apostilles or remanufactured goods restrictions
·
Streamline
approvals for U.S. pharma, medical devices, & autos (accept U.S. standards,
electronic certs; no apostilles or remanufactured goods restrictions
·
Eliminate
barriers to U.S. products; accept U.S. certs; use science/risk-based
registrations for efficient authorizations
·
Adopt strong
international protections. treaties; address USTR Special 301 issues (e.g., GIs
for cheeses/meats)
·
No DSTs or
discrimination vs. U.S. services; free data flows (U.S. adequacy); validate
U.S. e-signatures; support WTO e-transmission duty moratorium
·
Ban forced-labor
imports; enforce rights/laws; combat illegal logging/fishing/wildlife/mining;
implement the WTO fisheries subsidies agreement
·
Curb SOE/subsidy
distortions; cooperate on supply chains, export controls, duty evasion, &
investment security
U.S.-Ecuador
Reciprocal Trade Framework: 15% vs 0%
·
US tariffs on
Ecuador goods: 15%; Exempted (0%) on Coffee, bananas, and cocoa
·
Guatemala
tariffs on US goods: 0%; Reduced NTBs on U.S. machinery/chemicals; no DST on
U.S. tech; Andean Price Band elimination.
·
Average sales
tax rate in the US:~ 7.5%; total tax on Ecuadorian goods: 10%+7.5%= 17.5%
·
Average VAT rate
in Ecuador: ~15%; total tax on US goods: 0%+15%=15%
·
Ecuador
reduces/eliminates tariffs on U.S. machinery, health products, ICT, chemicals,
motor vehicles, & select agri goods; sets tariff-rate quotas on other agri
items
·
U.S. removes
reciprocal tariffs on qualifying Ecuadorian exports not producible domestically
·
Ecuador reforms
import licensing & facility registration for agri transparency; ends
restrictions on cheese/meat terms; halts pre-shipment inspections; implements
Single Window contingencies; expands AEO to express carriers (within 3 months);
removes ad services barriers.
·
Ensures GI
transparency; addresses 2025 USTR Special 301 issues; finalizes international.
IP treaty commitments.
·
Reforms to cut
unnecessary barriers; prevent market restrictions via product terms.
·
Protects labor
rights/enforcement; bans forced-labor imports; upholds environmental laws;
combats illegal logging/wildlife trade; promotes resource efficiency;
implements WTO fisheries subsidies; strengthens fisheries enforcement.
·
Boosts supply
chain resilience/innovation; counters non-market policies; fights duty evasion;
cooperates on investment security & export controls.
·
Avoids
discriminatory DSTs on U.S. firms; supports WTO moratorium on e-transmission
duties.
U.S.-El
Salvador Reciprocal Trade Framework: 10% vs 0%
·
US tariffs on
Ecuador goods: 10%; Exempted (0%) CAFTA-DR textiles; eased NTBs on foods
·
Guatemala
tariffs on US goods: 0%; U.S. goods market access; economic/security coop (duty
evasion, export controls). |
·
Average sales
tax rate in the US:~ 7.5%; total tax on Ecuadorian goods: 10%+7.5%= 17.5%
·
Average VAT rate
in Ecuador: ~15%; total tax on US goods: 0%+15%=15%
·
U.S. lifts
reciprocal tariffs on El Salvador’s non-domestic goods & CAFTA-DR
textiles/apparel
·
El Salvador
fast-tracks U.S. pharma/medical devices, accepts U.S. auto standards,
e-certificates, removes remanufactured goods bans & apostille rules
·
No restrictions
on U.S. products via terms (e.g., cheese/meat); accepts U.S. certificates
·
Advances IP
treaties, GI transparency; no DSTs on U.S. services; supports WTO e-duty
moratorium
·
Bans
forced-labor imports; fights illegal logging/mining/fishing; enforces labor
& environmental laws
·
Coop on supply
chains, export controls, investment screening, duty evasion; curbs SOE/subsidy
distortions.
U.S.-Switzerland-Liechtenstein
Historic Trade Deal: 15% vs 0% tariffs; sales tax/VAT on each other (7.5% vs
8.0%); overall at par after considering 70% NYMEX Gold at 0% along with
pharma/APIs and chips
President Trump unveils reciprocal trade agreement
to cut U.S. trade deficit ($38.5B in 2024), expand market access, drive $200B+
investments, and create thousands of jobs. Balanced trade, supply chain
security, exporter wins for U.S. farmers/manufacturers, and economic/national
security.
·
US tariffs on
Swiss goods: 15% -in line with the EU (including Physical Gold; but
trading/NYMEX Gold remains at 0%, constituting almost 70% along with certain
pharma, chemicals, and semiconductors); weighted average effective tariffs
~4.5%
·
Swiss tariffs on
US goods: 0%
·
Average sales
tax rate in the US:~ 7.5%; weighted average 2.5%; total tax of Swiss goods:
4.5%+2.5%=7.0%
·
Average VAT rate
in Switzerland: ~8.0%; total tax on US goods: 0%+8%=8%
·
Switzerland/Liechtenstein
eliminates tariffs on U.S. ag/industrial goods (nuts, fish/seafood, fruits,
chemicals, whiskey/rum); sets TRQs for poultry, beef, bison.
·
U.S. caps
reciprocal tariffs at ≤15% (matching EU); streamlines customs for
dairy/poultry/medical devices; recognizes U.S. auto safety standards.
·
Swiss firms
(e.g., Roche, Novartis, ABB) commit $200B+ in the U.S. (starting $67B in 2026),
focusing on pharma, machinery, energy; they use apprenticeships for job
creation across 50 states.
·
Strong IP
enforcement with transparent GIs; no harmful digital services taxes; free data
flows
·
Ban forced labor
in supply chains; high environmental standards; labor-trade cooperation.
·
USA-Enhanced
export controls, sanctions, and investment screening; closes procurement
loopholes for reciprocity.
·
Aims to
eliminate deficit by 2028; the largest U.S. exporter's access to Swiss markets
ever.
·
President Trump:
“This deal delivers for American workers--a level playing field for the first
time in decades”
Fact Sheet:
Following Trade Deal Announcements, President Donald J. Trump Modifies the
Scope of the Reciprocal Tariffs with Respect to Certain Agricultural Products: The
White House: November 14, 2025
“STRENGTHENING THE ECONOMY AND NATIONAL SECURITY
THROUGH TARIFFS AND TRADE DEALS:
Today, President Donald J. Trump signed an
Executive Order modifying the scope of the reciprocal tariffs that he first
announced on April 2, 2025.
Specifically,
certain qualifying agricultural products will no longer be subject to those
tariffs.
President Trump is strengthening the U.S. economy
and national security by modifying the scope of the reciprocal tariffs.
On April 2, the President announced global
reciprocal tariffs to address the national emergency posed by our large and
persistent trade deficits, which are driven by the absence of reciprocity in
our bilateral trade relationships, among other things. The President also determined not to impose reciprocal tariffs on
certain products, including certain critical minerals, energy, and energy
products.
On
September 5, the President modified
the scope of the reciprocal tariffs. Some goods were added to Annex II of
Executive Order 14257, meaning they would no longer be subject to reciprocal
tariffs. Other goods were removed from Annex II, meaning they are now subject
to reciprocal tariffs. The President also established a framework to implement
existing and future trade deals, and he identified certain goods that may not
be subject to reciprocal tariffs in the future.
Given the substantial progress in reciprocal trade
negotiations—including the conclusion of 9 framework deals, 2 final agreements
on reciprocal trade, and 2 investment agreements—current domestic demand for
certain products, and current domestic capacity to produce certain products,
among other things, President Trump has now determined that it is necessary and
appropriate to further modify the scope
of the reciprocal tariffs. Specifically, certain qualifying agricultural
products will no longer be subject to those tariffs, such as certain food not
grown in the United States.
Today’s Order follows the significant progress the
President has made in securing more reciprocal terms for our bilateral trade
relationships. President Trump’s deals have had and will continue to have broad
impacts on domestic production and the economy as a whole, including enhanced
market access for our agriculture exporters.
For example, many of the announced trade deals and
ongoing negotiations involve countries that produce substantial volumes of
agricultural products that are not grown or produced in sufficient quantities
in the United States.
The
President has thus determined that certain agricultural products shall no
longer be subject to the reciprocal tariffs. Some of these products include:
·
Coffee and tea;
·
Tropical fruits
and fruit juices;
·
Cocoa and
spices;
·
Bananas,
oranges, and tomatoes;
·
Beef; and
·
Additional
fertilizers (some fertilizers have never been subject to the reciprocal
tariffs).
The products that will no longer be subject to the
reciprocal tariffs have been added to Annex II of Executive Order 14257, as
amended, and, as appropriate, have been removed from the “Potential Tariff
Adjustments for Aligned Partners” (PTAAP) Annex.
The PTAAP Annex continues to contain other natural
resources not available in the United States for reasons of geology or climate,
generic pharmaceutical inputs, and aircraft and aircraft parts.
The President may be willing to remove the reciprocal
tariffs from these products upon the conclusion of any reciprocal trade and
security deal.
A modified Annex II and PTAAP Annex are attached to
today’s Order, and the modifications will take effect on November 13, 2025.
ACHIEVING
RECIPROCAL TRADE:
In less than one year into his second term,
President Trump has strengthened the international economic position of the
United States by delivering a series of historic wins for the American people.
The President has announced Agreements on
Reciprocal Trade with Malaysia and Cambodia, and Joint Statements on Frameworks
for such agreements with El Salvador, Argentina, Ecuador, and Guatemala;
Thailand and Vietnam; the United Kingdom and European Union, and Switzerland;
as well as investment deals with Japan and Korea. The President has also made significant
progress on reciprocal trade negotiations with many other countries around the
world.
DELIVERING
FOR THE AMERICAN PEOPLE:
President Trump’s tariff policies have delivered
significant and lasting wins for the American people through fair, tough, and
strategic trade negotiations, strengthening the U.S. economy and national
security while breaking down unfair trade barriers that have harmed American
workers for decades.
By imposing tariffs on countries with nonreciprocal
trade practices, President Trump is incentivizing manufacturing on American
soil and defending our industries.
The Trump Administration has worked with America’s
trading partners to craft tailor-made trade deals designed to eliminate their
most distortive trade practices and to ensure that trading partners align with
the United States on key economic and national security matters.
In a massive deal with the European Union, the EU
has agreed to purchase $750 billion in U.S. energy and make new investments of
$600 billion in the United States, all by 2028, while accepting a 15% tariff
rate and charging American companies zero.
During his historic trip to Asia in October,
President Trump signed trade deals with Malaysia and Cambodia and reached
reciprocal trade frameworks with Thailand and Vietnam.
Cambodia will eliminate tariffs on 100% of U.S.
industrial and agricultural goods, unlocking new market access for American
workers and producers.
Malaysia agreed to slash trade barriers facing
American exporters and expand market access for U.S. goods, ranging from
passenger vehicles and machinery to dairy and poultry.
Deals with four Latin American countries further
opens those markets for U.S. exports by eliminating tariffs and non-tariff
barriers, and strengthens our economic security relationships with these
important neighbors.
With billions in reshoring investments already
announced, President Trump is bringing manufacturing jobs back to America,
revitalizing communities, and strengthening supply chains.
The Administration will continue to use all
available tools to protect our national security, advance our economic
interests, and uphold a system of trade based in fairness and reciprocity.”
The White
House: November 14, 2025
“We’re
Making Big Progress on Prices — and We’ll Keep Working to Make Sure Everyone
Benefits
President Donald J. Trump inherited an economic
mess when he took office. Years of mismanagement under Biden, his incompetent
Administration, and Democrats in Congress — who spent years insisting inflation
was “transitory” while doling out trillions in new spending and dramatically
upscaling government — brought the country to the brink of economic ruin.
Since Day One, the Trump Administration has been on
a mission to tame Biden’s inflation crisis, stop the sky-high Biden price
increases, and lower costs for everyday families — and while it can’t happen
overnight, evidence shows the trend is in the right direction.
President
Trump tamed Biden’s inflation crisis.
Under Biden, inflation averaged nearly 5% — hitting
9.1% during the worst inflation crisis in decades, fueled by Radical Left
spending.
In President Trump’s second term, inflation has
dropped to an average of just 2.7% — the critical first step in reversing
Democrats’ cost-of-living disaster. In fact, under President Trump, Americans
have even seen the first overall price decline since 2020.
Americans
have made real wage gains, but there’s still work to do.
Under Biden, workers lost over $2,900 in purchasing
power — meaning inflation rose faster than wages.
In President Trump’s second term, even after
accounting for higher prices, Americans’ real wages have grown by nearly $700
and are on track to increase by nearly $1,200 after his first full year in
office.
Gas prices
are falling.
Under Biden, the average gas price was the highest
it has ever been during a presidential term, reaching its highest-ever price —
even after he drained our strategic reserves to artificially decrease prices.
In President Trump’s second term, Americans have
seen the lowest average gas price in more than four years and are on track to
spend the lowest amount of their disposable income on gas in the last two
decades. As President Trump’s energy dominance vision continues to come to
fruition, energy prices will fall further — igniting other price declines.
Grocery
prices and housing prices are trending in the right direction.
Prices for everyday staples are starting to see
declines. Under President Trump, prices for eggs, butter, ice cream, fresh fruit,
cereal, fish, seafood, rice, pasta, and ham have all seen declines — and more
help is on the way.
Housing
costs are moderating. Under Biden,
mortgage rates hit their highest in decades; in President Trump’s second term,
the average 30-year fixed mortgage rate was 6.17% at the end of October — 12%
lower than when he took office. According to the Consumer Price Index, the
12-month change in overall shelter costs is at its lowest level in four years.
Other efforts will continue driving prices down,
ramping up take-home pay, and strengthening our economy.
President
Trump’s deregulatory efforts are saving Americans a collective $180 billion —
or $2,100 per family of four.
For example, President Trump halted burdensome Biden-era efficiency standards
that jacked up the price of everyday appliances.
President
Trump signed into law the largest tax cuts in American history. This includes No Tax on Tips, No Tax on Overtime,
and No Tax on Social Security — all of which will save Americans money in their
tax returns; the landmark legislation will raise Americans’ take-home pay by as
much as $13,300 and wages by as much as $11,600.
President
Trump is bringing jobs and investment back to the U.S. Since President Trump took office, companies have
invested trillions of dollars into their U.S.-based operations — onshoring and
creating hundreds of thousands of new jobs for Americans.
President
Trump is reducing the deficit.
A combination of spending cuts, interest savings, economic growth, and tariff
revenues is expected to reduce the deficit by trillions of dollars, resulting
in higher take-home pay, lower interest rates, and a stronger economy.
1.9 million
more American-born workers are employed today than when President Trump took
office. Right now, the U.S. has
more people working than at any time in the history of our country.
The Trump Administration will not rest until the
high prices that resulted from Democrat policies are fully reined in. We’re
making progress — and the best is yet to come.”
Conclusions:
Trump is under huge pressure for his uncertain
& bellicose policies from economics to geopolitics. After the recent
terrible outcome in early November's regional/local election, mainly due to his
tariff policies and the higher cost of living for ordinary Americans. Trump is
also under huge political pressure from his Republican Party colleagues as
Trump's chaotic policies and increasing allegations of scandal involving sex
offender Epstein may cause a terrible defeat of Republicans in the forthcoming
November’26 midterm election. Trump may lose the House and his slim Trifecta,
causing more political & policy paralysis in 2027-28.
Thus, Trump is now blinking on his tariff policies,
but it may be too little and too late. The US economy is heading for a hard
landing and a potential stagflation, if not an all-out recession, by mid-2026
amid a growing subprime crisis and AI circular finance bubble. Fed may not be
in a position to cut rates proactively in H1CY26 even after Powell. But the Fed
will be forced to act in H2CY26 or early 2027 to launch QE and cut rates to
almost zero to combat another GFC (global financial crisis). Usually, the Fed
does not launch QE and near ZRIP unless there is another financial crisis.
Market Wrap
Wall Street recovered mid-Friday, November 14, 2025,
from AI bubble panic as Trump is blinking on his higher tariffs rhetoric. The
market was also under stress amid fading hopes of another Fed rate cut in
December’25, while it was also boosted by the end of the US government shutdown
saga for the time being. The short covering rally was buoyed by dip-buying in
Big Tech, but the broader mood stayed cautious. The shutdown's end lifted a
veil, yet the backlog of delayed data (like October jobs and CPI) has traders
squinting for Fed signals. The Fed's hawkish tilt post-October's 25bps trim is
amplifying rotation from growth to value. AI stocks' partial rebound was led by
short covering and some value buying perception; real economy stocks heavy
DJ-30 recovered, but still closed -310 points in red (-0.7%); broader SPX-500 edged
up +0.4%, while tech heavy NQ-100 was almost flat (+0.1%).
·
Dow's Continued
Slide: Down for the second day, weighed by industrials and financials (e.g.,
Boeing -1.8%, Goldman Sachs -1.2%).
·
S&P 500's
Near-Flat Finish: A razor-thin loss after swinging from -1.2% to +0.2%
intraday. Advancers edged decliners (~1.1:1), with energy (+0.4%) offsetting
consumer staples' dip (-0.3%).
·
NQ-100 Modest
Rebound: Erased early ~1.9% drop to close higher, driven by tech recovery.
Still, it's eyeing its first monthly loss since March, down ~2% MTD amid
valuation jitters.
Broader
Context and Drivers
·
Tech's Partial
Bounce: Major names reversed Thursday's rout—Nvidia +1.8% (to ~$190), Microsoft
+1.2%, Oracle +2.4%, Palantir +1.1%—as bargain hunters stepped in. This
softened the AI "reckoning," but Palantir's still off 16% from its
Nov 3 peak, underscoring stretched multiples (e.g., Nvidia's P/E ~45x forward).
·
Defensives Drag:
UnitedHealth (-3.2%) and Home Depot (-1.6%) lagged, hit by sector rotation and
holiday spending fears; Healthcare XLF
ETF fell 0.8%; consumer discretionary XLY -0.9%.
·
Fed and Shutdown
Fog: Reopening cleared procedural hurdles, but missing data has muddied the
inflation/labor picture—October PPI came in soft (+0.1% MoM), yet jobs proxies
(e.g., ADP) hint at softening. Fed speakers like Boston's Collins flagged a
"high bar" for easing; December 25 bps odds dipped to ~47% from 67%
pre-weekend. VIX eased to 16.2 but spiked 15% intraday.
·
Bitcoin sank 6%
to ~$53K, its 6-month low, tracking risk-off flows. Small-caps (Russell 2000
+0.3%) outperformed, signaling broadening.
Weekly Market Wrap
Wall Street wrapped a rollercoaster week on a mixed
note, with U.S. indexes eking out modest gains amid the federal government's
reopening but grappling with delayed data and Fed uncertainty. Globally,
China's dismal October figures fueled stimulus calls, while escalating China-Japan
tensions over Taiwan added to tech and trade jitters. AI hype cooled further,
dragging crypto and chip stocks, but strong Chinese tech earnings offered
glimmers of resilience. The VIX dipped to 16.8 by Friday but remains elevated,
signaling ongoing volatility as investors eye Nvidia's upcoming report and
backlog data releases.
U.S.
Markets: Shutdown Relief Meets Data Drought
The 43-day shutdown ended mid-week after President
Trump signed a stopgap bill funding operations through January 30, 2026. This
averted deeper chaos but left a $11 billion permanent GDP scar and ~60,000 job
losses, per White House estimates—potentially shaving up to 2 pp off Q4 growth.
Key reports like September jobs (now due Nov. 20) and October CPI/employment
face permanent gaps, complicating the Fed's path. Fed hawks (e.g., Collins,
Logan) pushed back on December easing amid sticky inflation, dropping cut odds
to ~47% from 94% last month. Trade moves included tariff cuts on select imports
and a $33B U.S.-Korea defense pact easing auto tariffs. Equities reversed
Wednesday's 1.6% plunge (worst since Oct. 10) but closed mixed Friday.
Tech rebounded modestly, but AI rotation persisted.
Wall Street closed almost flat; NQ-100 lost -0.5% led by NVIDIA’s slide as SoftBank
dumped its full Nvidia stake for $5.83B to fund AI ventures like OpenAI data
centers; Bridgewater trimmed 65% in Q3. Consumer sentiment cratered to 50.3,
the lowest in 3+ years. Tech frictions: U.S. memo accused Alibaba of PLA
support (denied); Nexperia rift prompts supply shifts; rare-earth talks stall,
excluding U.S. military buyers. Soybean imports halted post-truce, risking
pledge shortfalls.
China: Weak
Data Spurs Policy Pivot
PBOC vowed "appropriately loose" policy;
finance minister eyed aggressive fiscal policy for 2026–2030, including
private-sector access to state industries. Exports crumbled post-tariff
front-loading, highlighting domestic demand risks.
China Plans
Stronger Fiscal Policy in Coming Years amid Slowdown
China’s Finance Minister Lan Fo’an pledged to
pursue a stronger, proactive fiscal policy over the next five years to support
economic growth, Xinhua reported Friday. He said Beijing will keep its fiscal
stance proactive and sufficiently forceful through 2026–2030, with stronger
countercyclical and cross-cyclical adjustments. The budget deficit ratio and
borrowing scale will be set flexibly, while a mix of budget, taxation, bond
issuance, and transfer-payment tools will be used to sustain spending intensity
and support economic and social development. Fiscal policy will be applied with
greater precision and coordination to target manufacturing, technology, and
other key sectors, alongside efforts to boost spending efficiency.
Lan stressed that China’s economy remains resilient
despite rising external pressures, including weak global growth and increasing
protectionism. He said China will fully deploy special and ultra-long-term
sovereign bonds to expand investment and use fiscal subsidies and
interest-discounted loans to stimulate consumption. The interview came after
new monthly data showed the economy weakening at the start of the fourth
quarter, with a surprise decline in exports that, if prolonged, would heighten
China’s vulnerability to softer domestic demand.
Technical
outlook: DJ-30, NQ-100, SPX-500 and Gold
Looking
ahead, whatever may be the narrative, technically Dow Future (CMP: 47140) now has to sustain over 47700-48000
for a further rally to 48300-48800* and 49000/49500-49700/50000 in the coming
days; otherwise sustaining below 47500-47000, DJ-30 may fall to 46700*/46200-46000/45800*
and further 45500/44950-44500/44200 and 43500 in the coming days.
Similarly,
NQ-100 Future (25100) now has
to sustain over 25400-25700 for a further rally to 26000/26200-26500 in the
coming days; otherwise, sustaining below 25300-25000, NQ-100 may fall to
24700/24500-24300/24200* and 23700/23400/23000 and 22600/22400 in the coming
days.
Looking at
the chart, technically SPX-500
(CMP: 6750) now has to sustain over 6800-6850 for a further rally to 6950/7050
and 7200/7300-7500/8300 in the coming days; otherwise, sustaining below 6700,
may fall to 6600*/6595 and 6490/6450-6375/6300-6250/6200 and further fall to
6080 in the coming days.
Looking at
the chart, Technically Gold (CMP:
$4125) has to sustain over 4155 for 4175/4195-4300/4380 and further to
4395-4405 for 4425/4455-4475/4500 to 4555-4575 and even 5000 zone in the coming
days; otherwise sustaining below 4145, Gold may again fall to
4090/4040*-4025/4000 and 3910/3875-3770/3740 and 3700/3600-3500/3450 and 3350
levels in the coming weeks.
Disclaimer: I am an NSE-certified Level-2 market professional (Financial Analyst- Fundamental + Technical) and not a SEBI/SEC-registered investment advisor. The article is purely educational and not a proxy for any trading/investment signal/advice.
I am a professional analyst, signal provider, and content writer with over ten years of experience. All views expressed in the blog are strictly personal and may not align with any organization with, I may be associated.
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