Launch Pad

Okay? The U.S. economy is looking more K-shaped as higher-income earners continue to benefit from rising wealth and equity market gains while lower-income households face slowing wage growth, and affordability pressures. This dynamic has re-emerged as the post-pandemic wage catch-up for lower earners fades, hiring cools, and inflation eats into household budgets. In response, companies are tailoring products to both ends of the income spectrum, as affluent consumers drive spending while lower-income groups pull back and rely more on credit. Meanwhile, AI-related stocks have boosted equity returns but generated fewer jobs, further benefitting wealthier households who hold most equities. Economists warn that an economy driven mainly by top earners is unstable, though some expect incoming tax (and tariff?) refunds and the prospect of future rate cuts under a new Fed chair to provide relief and support broader growth. 

U.S. factory activity declined in November at the fastest pace in four months, with the ISM manufacturing index falling to 48.2, marking the ninth straight monthly decline as weaker orders, shrinking backlogs, and falling employment point to continued demand softness. Firms are citing uncertainty around Trump’s tariffs, which now include a 25% tariff on medium- and heavy-duty trucks, as a major drag on activity. While a few sectors tied to AI investment showed resilience, most manufacturers reported soft business conditions, supply chain disruptions, and cautious hiring, with 67% managing headcount reductions rather than expanding. The prices-paid component increased for the first time in five months, while trade policy uncertainty weighed on sentiment. Although production rebounded modestly, growth was limited to just four industries (the fewest in a year), highlighting how uneven output remains across the sector. 

Canadians are still shopping, but where? Canadian online sales for the weekend following Black Friday rose 9% from last year, driven by a 6% increase in order volumes and deeper discounts, with average markdowns around 30%. A recent report notes that Canadian shoppers enjoyed some of the best deals globally and made greater use of AI shopping tools. The strong weekend built on a solid Black Friday, when online sales grew 7% and orders rose 6% compared to last year. As we enter the heart of the holiday season, the question is where will Canadians choose to shop? Retailers say the rise in patriotic “buy Canadian” sentiment since April, is starting to fade. New reports suggest there are limits to loyalty, with shoppers prioritizing price and convenience. While surveys still show a desire to support homegrown brands and local businesses, spending data and anecdotes from local retailers is painting a different picture. 

Consumers in the U.S. also opened their wallets over the weekend, shaking off weak confidence and tariff-driven inflation to spend $43.7 over the holiday weekend. Big discounts and increased use of short-term buy now, pay later loans helped fuel demand, particularly among wealthier shoppers, while lower-income consumers showed more caution and fewer impulse buys. Retailers like Amazon, Walmart, and Target broadened their deals (extending to essentials), suggesting that consumers are becoming more price conscious. AI-driven shopping rose, with traffic from chatbots and assistants jumping nearly eightfold from last year and 40% of surveyed shoppers using AI tools to find deals. Despite overall strength, slowing growth rates and rising reliance on financing may point to underlying financial strain for many households. 

Bitcoin and Ether continued their decline yesterday as the crypto sell-off intensified, with Bitcoin dropping nearly 6% to around $85,800 and Ether falling over 9% to roughly $2,770, alongside similar declines in Solana and other major tokens. The downturn followed a warning from China’s central bank about illegal digital currency activity, pressuring crypto-linked stocks in Asia and adding to broader risk-off sentiment. Analysts pointed to heavy leverage (up to 200x on some exchanges) and a $400 million liquidation as key drivers of the volatility. Bitcoin’s recent correlation with tech indexes, macro uncertainty around U.S. rate cuts, and weak trading volumes across exchanges all suggest that short-term pressure and volatility in crypto markets may continue. 

Some of us may know how difficult it is to find the right flowers for the special someone, but this takes the cake. A biologist in Indonesia had the discovery of a lifetime after finding the ultra-rare Rafflesia hasseltii, a giant parasitic “corpse flower” after searching for over 13 years. Joined by a team from Oxford, the group trekked through tiger-patrolled rainforest to find the species, which blooms only for a few days after developing for up to nine months. So you can understand why he was a bit emotional after the discovery.  With more than 40 species of Rafflesia threatened by habitat loss, researchers are now working to establish the first dedicated conservation group to protect the endangered flowers.  

Soybean futures rose in Chicago amid expectation that China will step up purchases from the U.S. in the coming weeks. State-owned importers including Cofco will take more soy shipments to meet a pledge to buy at least 12 million tons by the end of the year, according to traders from commercial and state buyers. China’s soy buying has been a focal point in its fraught trade relationship with Washington, and the volumes will help Beijing’s fulfill commitments made in late October, though the timing and scale of shipments remains uncertain. Soybeans climbed as much as 0.7% on Tuesday, heading for a fourth gain in five sessions.