Launch Pad

Corporations feeling the pressure? Private-sector hiring in the U.S. weakened in November, with companies cutting 32,000 jobs, the largest drop since early 2023. ADP data released this morning signals softening in the labour market just days before the Fed’s final policy meeting of the year. With the official jobs report delayed by the government shutdown, this ADP release carries a lot more weight than unusual for policymakers, who remain split on whether to deliver a third consecutive rate cut amid slowing employment and still-elevated inflation. Experts have noted that hiring has turned choppy as businesses face cautious consumers and economic uncertainty, with small firms leading November’s pullback. 

More pauses in sight. Inflation in the euro-area rose to 2.2% in November from 2.1%, with core inflation holding at 2.4% and services prices rising slightly, reinforcing the ECB’s view that there’s little justification for further rate cuts. With inflation hovering near the ECB’s 2% target for nine months (although it still varies across member countries), most expect the deposit rate to remain at 2% through 2026 after this year’s series of cuts from a 4% peak. ECB President Christine Lagarde has emphasized confidence in current policy settings, while upcoming projections may show a temporary dip in inflation due to delayed EU carbon-pricing rules. Despite lingering wage-driven pressures in services, wage growth is moderating, supporting a continued downward inflation trend. In any case, the central bank appears ready to adjust policy if geopolitical or economic conditions change. 

Changing of the guard? The S&P 500 has rebounded over the last week and is now once again in striking distance of record highs. What’s interesting about the recent run up is that unlike earlier rallies, Big Tech is lagging while healthcare and industrial stocks such as Eli Lilly, Cardinal Health, and Biogen lead performance. Since the index’s last peak in October, the S&P 500 tech sector has fallen 4.2%, with major AI-driven names like Nvidia, Microsoft, and Meta declining as investors question high valuations and whether heavy AI infrastructure spending will actually translate into profits. The recent rotation into other sectors suggests broader confidence in the U.S. economy amid expectations of continued Fed rate cuts, though continued performance leadership outside tech would require stronger earnings growth from those non-tech industries. 

With a finish line now in sight for Jerome Powell’s term, we all knew he wasn’t going to last forever, but at least it appears he won’t be fired.  Powell, who was originally Trump’s choice to replace Janet Yellen as Fed chair, is set to see out his term. Trump said he will announce his choice for the next Fed chair in early 2026, matching the timeline suggested by Treasury Secretary Scott Bessent. Trump, who has repeatedly criticized  Powell as too slow to cut interest rates, is expected to select someone more aggressive in easing policy when Powell’s term ends in May. White House economic adviser Kevin Hassett is viewed as the leading contender, though other finalists include Fed Governors Christopher Waller and Michelle Bowman, former Governor Kevin Warsh, and BlackRock’s Rick Rieder. While Trump says he has already made his decision, the nomination (which requires Senate confirmation) remains open to last-minute shifts given his tendency to pick personnel based off his mood that day. 

Even with the release of delayed reports, not all the shutdown-affected data will be recovered. The September Job Openings and Labor Turnover Survey (JOLTS) was cancelled outright after the shutdown forced the Bureau of Labor Statistics (BLS) to halt survey operations, furlough staff, and miss its reference-month collection window. Several state employment and unemployment reports for September and October were dropped for the same reason. The gap left by these missing data points removes a key lens into labour demand, hiring momentum, and wage pressures. For analysts and markets, that means relying more on higher-frequency indicators, private surveys, and market pricing to assess economic direction. For the Fed, it may complicate the Fed’s near-term assessment of the economy at a time when policy decisions are particularly sensitive to the direction of job openings, wage pressures, and underlying demand. 

Automakers in the U.S. are beginning to feel the impact of losing federal EV tax credits, with Ford reporting a steep 61% drop in all-EV sales in November versus a year earlier, including significant declines for the Mustang Mach-E, E-Transit van and F-150 Lightning. This is playing out across the board, hitting other brands such as Hyundai and Kia, whose EV sales have more than halved. Meanwhile, hybrid sales are rising as consumers move towards cheaper, more practical alternatives amid high EV costs and the expired credit. Ford’s hybrid deliveries are up 19% year to date, and Hyundai posted a 42% jump in November. Automakers including Ford, Volkswagen, Toyota and Honda are now shifting strategy to emphasize hybrids, investing in expanded production and extended-range models to meet rising demand. 

Copper is hitting a record high as orders surged for metal on the LME compounded worries that potential U.S. tariffs will fuel a global supply squeeze. LME prices rallied as much as 2.6% to trade above $11,400 a ton, surpassing a peak struck on Monday, after data from the exchange showed a spike in orders for copper in LME depots. in Asia. Copper prices have been running higher in recent weeks as a growing number of analysts have warned that global inventories could soon be drained to critically low levels as huge volumes of metal are shipped to the U.S. in anticipation of tariffs. The LME’s global benchmark price is up more than 30% this year, but U.S. futures have rallied even further, with investors betting that President Trump will announce levies on primary forms of the metal. The decision has had huge ramifications in the physical copper market, with traders once again ramping up shipments to American ports as U.S. futures surge. Producers have also announced that they’ll charge record premiums to supply customers in Europe and Asia next year, with buyers in effect compensating them for the additional profits they could make selling to the U.S.