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What has happened?
Yesterday's wave of optimism propelled the S&P 500 (+1.23%) and Nasdaq Composite (+1.86%) to fresh record highs, marking the S&P's strongest three-day streak since May. Tech stocks led the charge: Qualcomm surged +11.09% on a new chip challenging Nvidia's dominance, while Reuters highlighted a $1bn AI partnership between the US Department of Energy and AMD (+2.67%). This boosted the Philadelphia Semiconductor Index and gave the Magnificent Seven (+2.60%) their best day since May. In bonds, the yield curve steepened as short-term Treasuries sold off in the risk-on environment. Gold tumbled -3.18%, slipping below $4,000/oz, now down -8.59% from last week's peak.
Fed chair contenders emerge
US Treasury Secretary Bessent revealed the final five candidates for Fed Chair: Kevin Hassett, Kevin Warsh, Christopher Waller, Michelle Bowman, and Rick Rieder, with plans to submit the list to President Trump post-Thanksgiving. Trump, however, floated Bessent himself for the role, alongside Marco Rubio for Secretary of State and Jamieson Greer for US Trade Representative, raising questions about the shortlist's influence. While Trump’s comments might not be serious, investors should approach them cautiously.
Corporate layoffs signal broader labour market softening
Amazon is set to slash up to 30,000 corporate jobs starting Tuesday, aiming to curb costs from pandemic overhiring and affecting nearly 10% of its 350,000 corporate staff. This follows a flurry of layoff announcements last week, including Target (1,800 roles), Applied Materials (~4% of workforce), Rivian (~4%), Charter (~1%), Molson Coors (~9% of North American staff), and Meta (600 AI positions). While these feel company-specific, they align with ongoing signs of a cooling labour market.
What does Brooks Macdonald think?
Optimism is building around President Trump's upcoming Thursday meeting with President Xi, bolstered by Trump's comments: ‘I have a lot of respect for Xi. I think we’re going to come away with a deal.’ He also suggested a potential TikTok resolution during talks. That said, trade and macroeconomic outlook remains fluid.
Source: Brooks Macdonald
Brooks Macdonald is a trading name of Brooks Macdonald Group plc used by various companies in the Brooks Macdonald group of companies. Brooks Macdonald Group plc is registered in England No: 04402058. Registered office: 21 Lombard Street London EC3V 9AH. Brooks Macdonald Asset Management Limited is regulated by the Financial Conduct Authority. Registered in England No: 03417519. Registered office: 21 Lombard Street, London EC3V 9AH.
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