Bear & Bull Bulletin- Week of November 14th

📊 Weekly Market Recap

• S&P 500 return Year-to-date were approximately 14.81%
• S&P 500 3 month return were approximately 4.16%
• S&P 500 return over the past month were approximately 1.40%
• S&P 500 return over the past 7 days were approximately 0.26%

This Week in the Markets- 4 Things to know

1. Government Shutdown Done, But Not Without Fallout- The government may have reopened, but the impact from the longest shutdown in history is still rippling through the markets as of today. Investors spent the early part of the week preparing for a drawn-out political fight, only to be hit with a sudden reversal when funding was restored. The relief was welcome but hardly enough to erase the damage already done. The brief halt froze several key government functions and, more importantly, delayed critical economic data. The absence of the CPI report created an unusual and uncomfortable blind spot for markets. Inflation data is the anchor for nearly every major rate expectation, and without it, both traders and corporations were forced to operate without one of the most important signals in the entire macro environment.
2. “Burry”ing The Boom – The debate over whether the AI rally is quietly evolving into a bubble came roaring back this week. As mega-cap tech stocks kept pushing to new highs, many analysts pointed to valuations that look increasingly disconnected from earnings reality. Some argue we’re witnessing the early stages of a technological revolution that truly justifies elevated multiples. Others counter that profits simply aren’t keeping pace with the hype, and the market is repeating familiar bubble-era patterns. The conversation gained even more momentum when Michael Burry (of “Big Short” fame)  publicly confirmed he was holding put positions against NVIDIA and Palantir, two of the most iconic names in the entire AI ecosystem. Anytime the word “bubble” hit a headline, volatility jumped instantly. Investors spent the week wrestling with whether this is genuine long-term innovation or speculative excess dressed up as a growth story.
3. Holiday Spending Might Be a Silent Night- Several major retailers reported weaker foot traffic this week, signaling that the consumer may finally be running out of steam after months of surprising resilience. Discretionary spending especially in apparel, electronics, and home goods slowed noticeably, which caught analysts’ attention immediately. This shift is particularly important because retail strength has been one of the biggest buffers against broader economic slowdown. Now, with the holiday season approaching, soft consumer momentum becomes a much bigger deal. If shoppers pull back during November and December, it could have a sizable impact on CPI, since holiday pricing trends heavily influence the goods component of inflation. Retailers are already responding with earlier discounts, bigger promotions, and aggressive inventory clearing to lure hesitant buyers. That means we could see downward pressure on goods inflation, which the Fed will watch very closely.
4. The Next Big Catalyst– Data-center construction stayed flat for over a decade, but the moment AI demand spiked, build-outs went vertical. Markets have been pricing in AI growth for the past two years, and this chart explains why: companies are racing to add massive computing capacity to keep up. Most of 2025’s market gain has unsurprisingly came from these AI players… contradicting the AI bubble which tells investors there’s still a huge pipeline of AI-related infrastructure spending ahead. Even the stalled portion is tiny compared to what’s coming, meaning supply constraints not demand are the real issue. Overall, the AI trade is still picking up and this build-out shows it’s still in full effect and likely to fuel the another leg a market rally.

Markets Want a Map, The Economy Hands Them a Puzzle.

The U.S. market is heading into the final stretch of the year with a macro backdrop that feels more like controlled turbulence than a steady flight path. The economy is sending conflicting signals at every turn: retail spending is cooling, discretionary categories are weakening, and households are becoming more selective as savings buffers shrink. Services and travel remain firm, but goods demand is choppy and manufacturing keeps slipping in and out of contraction. Businesses are adapting by leaning harder into efficiency, automation, and AI investment moves that support profitability but also reveal a landscape shaped by high borrowing costs.

At the center of this unease is the Federal Reserve, whose path has narrowed just as the year draws to a close. Inflation is dramatically lower than its peak, but the “last mile” remains stubborn, and a gap in key data has effectively given policymakers more justification to wait. Elevated Treasury yields and steady though not booming growth allow the Fed to push potential rate cuts deeper into 2025. Volatility remains elevated, positioning stays conservative, and risk appetite is capped until there is evidence that inflation is finally breaking lower or growth is definitively stabilizing.

Corporate America is also signaling a market caught between two narratives. Earnings have generally held up, but guidance has turned more cautious across housing, autos, and rate-sensitive industries. The bond market can’t settle on a story, swinging week to week as incoming data alternates between softening and stabilization. The labor market is cooling just enough to ease wage pressure but not enough to force the Fed’s hand. All of this creates an environment where markets can move, but not with confidence where every rally feels tentative and every pullback feels reactive rather than structural.

What this means for the rest of the year is a market preparing for both possibilities at once. In the good scenario, inflation continues drifting lower, yields stabilize, holiday spending surprises modestly to the upside, and equities can stage a controlled year-end rally. In the bad scenario, inflation flattens out, growth softens further, credit tightens, and a weak consumer holiday season sparks renewed downside pressure. The truth is likely somewhere in between, the economy isn’t contracting, but momentum is clearly slowing; inflation isn’t rising, but it’s not falling fast enough and the Fed isn’t easing, but it isn’t tightening either.

S&P 500 SECTOR SNAPSHOT- Past Week