Investment Update November 12, 2025

Last Week on Wall Street

Economic data was again limited due to the federal government shutdown, but included improvements in ISM services and ADP employment, while ISM manufacturing and consumer sentiment fell back to varying degrees.

Equities were largely down around the world, led by a pullback in the technology group. Bonds were flat with little change in Treasury yields. Commodities were also relatively flattish for the week, and oil fell slightly.

U.S. stocks experienced on off-week, as technology experienced the bulk of the declines, down around -4% (led by down Nvidia, Microsoft, and Salesforce), followed by communications. On the positive side, gains were seen in energy, health care, and financials.

Sentiment turned against technology last week, with signs of skepticism about AI-related company valuations and massive capital spending on those expensive endeavors. While it was one of the biggest pullbacks since April for growth stocks, such retrenchments are far from unusual after strong upward movements in short periods of time. The government shutdown, now into its second month, is assumed to likely trim about a percent off of U.S. production for the fourth quarter. However, missing growth from the shutdown could be made up in first quarter 2026, as postponed payrolls and spending are restarted. Signs of perhaps even weaker labor conditions weighed on sentiment as well.

Foreign stocks were mixed, with flattish results in the U.K., and negative returns in Japan and Europe, and more notably in emerging markets. The Bank of England met, and decided to keep the bank rate at 4%, with a close 5-4 vote, wanting more information to ensure inflation was moving in a downward trajectory. In emerging markets, gains in Brazil of several percent offset sharp declines in Taiwan and South Korea—each of which has been closely correlated to the U.S. technology and communications sectors.

Bonds were very flat on the week overall, with minimal change in the U.S. Treasury yield curve. Floating rate bank loans outperformed investment-grade and high yield corporates by a few basis points. Foreign bonds experienced a bit more variation, with emerging market local currency bonds outperforming, as the U.S. dollar fell slightly.

Commodities were flattish on the week, with a small gain in precious metals offset by a decline of over a percent in industrial metals. Crude oil fell about -2% last week to just under $60/barrel, with no major headline news to report, but higher supplies continuing to weigh on prices.

(Source LSAConnect)

Fact of the Week

The United States has officially stopped producing pennies, causing retailers to adjust prices and round cash transactions. The U.S. isn’t the first country to eliminate low-value coins. Canada, Australia, Ireland, and New Zealand have all had similar phase-outs, rounding cash transactions to the nearest five cents (source: Reuters).