Markets ended the week mixed despite an anticipated rate cut from the Federal Reserve. The Fed cut its benchmark rate by 0.25%, but investors rotated out of high-flying AI names, leaving the Nasdaq 100 with the week’s biggest loss while the Dow 30 Industrials posted the strongest gain.
This week’s Fed meeting delivered plenty to digest. Policymakers lowered the federal funds rate to a 3.50%–3.75% range, though the decision came with three dissents: Stephen Miran pushed for a larger 0.50% cut, while two members preferred no cut at all. The committee’s updated projections show only one expected cut in 2026, signaling a more cautious path ahead.
The Fed also announced that its balance-sheet runoff—letting bonds mature without replacement—has reached what it considers “adequate levels.” Beginning Friday, the Fed will shift to purchasing short-term Treasuries, starting with $40 billion. Purchases are expected to remain high for several months before tapering off.
Adding to the week’s surprises, Chairman Powell revealed the Fed believes job creation has been significantly overstated—by roughly 60,000 jobs per month. While the Labor Department shows an average 40,000 monthly job gain since April, the Fed estimates the real number may reflect a monthly loss of around 20,000 jobs.
Elsewhere, the Bank of Canada chose to hold its benchmark rate steady at 2.25%.
Trade data continued to show improvement on a month-to-month basis, but the U.S. trade deficit remains 17.2% higher year-to-date compared with the same period in 2024, reflecting strong import activity ahead of tariff changes.
Government economic releases continue to trickle out, but ongoing delays are adding an extra layer of uncertainty to the broader outlook.
Market & Rate Highlights
Treasury Yields (Higher on the Week)
- 30-year: 4.852%
- 10-year: 4.190%
Mortgage Rates
- Average 30-year (Freddie Mac): 6.22% (higher)
Commodities & Currency
- Crude oil: $57.48 per barrel (lower)
- Natural gas: $4.124 (lower)
- U.S. dollar index: 98.40 (lower)
- Gold: $4,333.70 per ounce (higher)
Treasury Department
Released the November report detailing monthly and fiscal-year receipts and outlays.
Source: U.S. Treasury Department
Commerce Department
US Trade Deficit (September)
- Monthly: -10.9%
- Exports: +3.0%
- Imports: +0.6%
- Year to date: +17.2% vs 2024
Wholesale Inventories (September vs. August) +0.5%.
Labor Department
Job Openings and Labor Turnover (October)
-
- Job Openings rose to 7.67MM, driven mostly by retail and wholesale trade.
- Separations 5.1MM or 3.2% of the workforce.
- Layoffs rose to 1.85MM, or 1.2%, highest since early 2023.
- Quits 2.9MM, or 1.8%.
- Hiring was steady at 3.2%.
Jobless Claims (Week Ending Dec 6th)
- Initial claims: 236,000 (+44,000)
- Four-week average: 216,750 (+2,000)
- Total unemployed: 1,838,000 (–99,000)
Energy & Industry Data
EIA Petroleum Report
- U.S. crude output rose to 13.853 million barrels/day.
- Natural gas storage: Fell 177 bcf remains near five years for this date.
Baker Hughes Rig Count
- Oil rigs: +1 to 414
- Gas rigs: –2 to 127
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Loren Rex – Emeritus
Erik A Smith, AIF® – President & C.E.O.
Nicholas Acri, CFP® – Partner & Wealth Advisor
Dylan Thomas, CFP® – Partner & Wealth Advisor
Jack Zeeb – Wealth Advisor
These are the opinions of Loren Rex and Erik Smith and are not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice. The Indices mentioned are unmanaged and cannot be invested into directly. The Dow Jones Industrial Average, Dow Jones, or simply the Dow, is a stock market index of 30 prominent companies listed on stock exchanges in the United States. The DJIA is one of the oldest and most commonly followed equity indexes. The Nasdaq Composite is a stock market index that includes almost all stocks listed on the Nasdaq stock exchange (more than 2500 stocks).
Sources:
https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WCRFPUS2&f=W
https://ir.eia.gov/ngs/ngs.html
https://www.freddiemac.com/pmms
https://www.wsj.com/market-data?mod=nav_top_subsection
