Stock futures are subdued and mixed this morning, as the FOMC kicks off their two-day rate meeting today. Nvidia shares are slightly higher pre-market after news the U.S. administration will allow the company to export its H200 chips, a more powerful version of the H20 chips currently permitted, though still short of its flagship model. Nothing comes free, however, as the U.S. government will take a 25% share of the sale, a so-called win-win for all parties. On the data front, the Fed gets more delayed jobs figures to parse ahead of tomorrow’s interest rate decision, with the October JOLTS report due later this morning. The market has all but priced in an interest rate cut at the final FOMC meeting of the year.
Short on memory. A global shortage of memory chips, ranging from basic flash storage to advanced high-bandwidth memory for AI data centers, is driving prices higher and forcing major tech companies, smartphone makers, and electronics retailers to fight for limited supply. As chipmakers like Samsung, SK Hynix, and Micron prioritize high-margin AI memory to meet growing demand from firms such as Nvidia, Google, Microsoft, and ByteDance, production of conventional chips has fallen behind, creating shortages across PCs, phones, and consumer electronics. Prices have more than doubled in some categories, and retailers in Japan are beginning to ration purchases, while Chinese smartphone manufacturers warn of steep price hikes. The shortage may derail major AI infrastructure projects, slow productivity, and has the potential to add to global inflationary pressures.
U.S. supply chains have found a way to diversify away from China, Hong Kong, and Korea, with the share of supplier volume dropping from 90% to 50% over the last few years, a trend that accelerated after Trump’s first term trade war with China. Vietnam, Indonesia, Thailand, and India have benefitted as companies moved midsize suppliers to South and Southeast Asia, while imports from China to the U.S. fell 26% year-over-year. Yet China’s overall trade picture remains resilient. Its trade surplus climbed above $1 trillion for the first time in November, with exports up 5.4% and imports down over the first 11 months of 2025, widening the surplus by more than 21% year over year. Exports to the U.S. fell for the eighth straight month, but strong demand from ASEAN and the EU more than offset the decline as Chinese firms diverted goods through third countries such as Vietnam. While the recent U.S./China trade truce eased tensions and boosted rare earth and soybean flows, economists warn that trade frictions could return as China’s growing surplus raises concerns. For now, exports remain the key bright spot for China, helping the country maintain its roughly 5% growth target despite weak domestic demand, even as policymakers are expected to deploy more stimulus to counter manufacturing and housing weakness.
Feeling bullish. Asset managers around the world appear bullish heading into 2026, with over 75% positioning portfolios for a risk-on environment driven by expectations of solid global growth, supportive monetary and fiscal policy, and ongoing momentum from AI. Most remain overweight equities, especially in emerging markets, the U.S., India, and small caps, arguing that strong earnings and early-stage AI adoption justify current valuations, despite how elevated they appear. Managers also see opportunities in sectors like health care and industrials, while clean-energy providers and small caps are set to benefit from lower rates. Still, there are plenty of risks, including potential disruption if the Fed halts its easing cycle, geopolitical shocks that could drive up oil prices, and uncertainty surrounding Trump’s trade policies. Despite these concerns, confidence remains high that equity markets can extend their multi-year rally.
Canada’s stock market is shrinking as delistings and take-private deals continue to outpace new IPOs, leaving the TSX with 45% fewer corporate listings than in 2008, even as its overall market value has nearly tripled. More than $100 billion in Canadian companies have gone private in recent years, driven by attractive private-equity valuations and an abundance of private credit, limiting public-market access to growth opportunities for ordinary investors. While only a handful of firms have gone public recently, bankers see growing investor appetite and expect the next few years to bring a healthier pipeline, with several high-quality Canadian companies preparing to list. With valuations improving and successful IPO examples beginning to re-emerge, the environment may finally be turning more favourable after a few weak years for deals.
The Canadian housing market remains under pressure despite close to a year and a half of Bank of Canada rate cuts, with U.S.–Canada trade war overshadowing cheaper borrowing costs and a growing number of new listings. Even with a 275 bps drop in the policy rate and significantly lower mortgage rates, national sales and prices are roughly unchanged from early 2024, suggesting that economic anxiety and not interest rates, is leaving potential buyers on the sidelines. First-time buyers appear reluctant to jump into the market, investors have disappeared, and major markets like Toronto and Vancouver are dragging despite pockets of strength in more affordable areas. Analysts also warn that 2026 could bring a tougher mortgage-renewal shock for households that locked in ultra-low 2021 rates and have since seen their home equity weaken. While major concerns like the trade conflict may ease, experts expect only a slow, uneven recovery rather than a rapid rebound.
As you’re making your way through all those holiday classics, keep this in mind. Inflation has risen so dramatically since Home Alone 2 debuted in 1992 that Kevin McCallister’s $967 Plaza Hotel room-service binge would now cost $2,233 (he did ask for 3 scoops and wasn’t driving). His entire New York adventure is estimated at about $8,511 in 2025, up from about $2,109 at the time. Next time you think about a New York get away, note that prices at the Plaza are up around 303% over 33 years, with an average suite now $6,244 a night, and some reaching $33,000. Even a sundae will put a dent in your wallet, with the hotel now selling a $350 “Home Alone Sundae” in honour of the film.
Diversion: It was him…
