Risk Appetites Thrive on Eve of Thanksgiving: Nov. 26, 2025

Stocks are going on a Thanksgiving Eve rally as a 32-week low in initial unemployment claims alongside anecdotal evidence suggesting that Kevin Hassett is the front-runner to become the next Fed Chair is being cheered by investors. With Wall Street penciling in a rate cut at the December meeting, data reflecting labor market strength is bolstering confidence that the economic expansion remains alive and well. The subdued level of layoffs reported by the government is countering a plethora of private-sector statistics that depicted worse conditions on a relative basis. Meanwhile, rising expectations of an increasingly dovish Fed subsequent to the end of Jerome Powell’s term at the helm and a durable goods beat lifted by robust capital expenditures are also supporting bullish sentiment. Every equity sector and sub-category is advancing, helped by heavier growth prospects and the holiday spirit. Additionally, commodity majors minus lumber are higher, but stronger activity projections are raising yields across the curve in bear-flattening fashion, led by the monetary policy sensitive shorter tenors. Volatility protection instruments are dropping in value due to risk-on postures in markets, while the greenback take modest losses.

Unemployment Data Eases Job Market Fears

Unemployment claims remained range bound in the past two weeks, although the initial filing segment marked its lowest level since early April. Indeed, first-time applications decreased to 216k during the seven-day period ended Nov. 22, beneath the 225k median estimate and the 222k from the prior interval. Continuing filings rose slightly to 1.960 million from 1.953 million, meanwhile. Four-week moving averages changed modestly from 224.75k and 1.955 million to 223.75k and 1.956 million.

Past performance does not guarantee future results.

Durable Goods Post Strong Beat

September Durable Goods orders posted a beat as broad-based growth was reported across categories. Transactions rose 0.5% month over month (m/m), better than the 0.3% expected but slower than August’s 3%. Results were helped by the third consecutive month of business investment strength, which rose 0.9% m/m. The more granular categories experienced the following m/m increases:

• Electrical, 1.5%
• Primary metal, 1.4%
• Computers, 0.5%
• Fabricated metal products, 0.5%,
• Automobile, 0.4%
• Other, 0.3%
• Machinery, 0.1%

Defense capital goods also contributed positively at 23% m/m while passenger aircraft was a drag, dropping 6.1% m/m.

S&P 500 Poised For Santa Rally, Just 1.4% Below Peak

Today’s Thanksgiving Eve rally places the S&P 500 just 1.4% below its all-time Oct. 29 high. The ferocious equity recovery is occurring despite prior worries that the asset class could fall into correction territory; however, strengthening support from a potential December rate cut, which is believed to be significantly more likely following comments from several FOMC voting members, alongside news stating that Kevin Hassett is favored to be named the next Fed chair is underpinning risk appetites during the most bullish months of the year. Economic data has certainly been mixed, at times pointing to weaker consumers, decelerating labor conditions and sticky inflation, but investors have been paying more attention to the positive developments while covering their ears to the sound of anything adverse. Finally, participants can enjoy tomorrow’s feast with equities up above 15% in 2025 while taking a break from wondering how much runway is ahead.

International Roundup

Australia Price Pressures Pick Up

Australia’s Consumer Price Index depicted modestly accelerating price pressures in October with housing, food, and pass times contributing to higher living costs on a year-over-year (y/y) basis, according to the Australian Bureau of Statistics. The metric was up 3.8%, exceeding the economist consensus estimate of 3.6% following September 3.6% print.

The gauge was also up 0.3% m/m. The following items and the extent of their increases had the largest impacts on the m/m result:

• Recreation and culture, 1.7%
• Furnishings, household equipment and services, 0.9%
• Clothing and footwear, 0.5%
• Insurance and financial services, 0.4%
• Education, 0.4%

Alcohol and tobacco, which was up 4.4% y/y, posted the largest decline relative to September, slipping 0.5%. Housing, meanwhile, was 0.4% less expensive than in the preceding month despite being up 5.9% y/y. Communication services also slipped m/m, falling 0.1% but were up 0.8% y/y.

While Completed Construction Plummets

Completed construction during the third quarter sank 0.7% quarter over quarter, the first negative print since early 2024. Spending on engineering sank 5.8% while overall building, residential construction and non-residential work increased 4%, 4.2% and 3.7%.

UK Tax Hike Unveiled

Chancellor of the Exchequer Rachel Reeves proposed £26 billion ($34 billion) of tax increases this morning, a change that the country’s Office of Budget Responsibility (OBR) believes will have no impact on economic output by 2030. That statement is contrary to concerns of fiscal conservatives who maintain that higher taxes will dampen gross domestic product growth. The OBR believes the increase will cause taxes to represent 38% of GDP, up from 35% in the 2024-2025 period. Reeves is proposing the tax hikes in response to slowing economic growth, which has contributed to the decline in government revenues. In pitching her proposals, she claimed that Covid, Brexit, a lack of sufficient investment by her opposition party, the Tories, account for the UK’s disappointing economic performance.

Singapore Industry Surpasses Expectations

Singapore’s industrial production in October slowed m/m from 26.4% to 11.5% but easily beat the economist consensus expectation for a 3.5% drop. Relative to the year-ago period, production was up 29.1%, much stronger than the economist estimate of 9.5% and September’s 16.2% result.

The country’s biomedical manufacturing industry and pharmaceutical segment powered much of the y/y gains with growth of 89.6% and 122.9%, respectively. Growth also occurred in the following categories:

• Transport engineering, up 29.5%
• Electronics, up 26.9%
• Precision engineering, up 12.2%
• Chemicals, up 2.2%

Conversely, general manufacturing contracted 5.6% with its food, beverages and tobacco segment sinking 8.2%.