Buckle up, because this week is about to serve up more economic data than a Netflix binge session. Markets are basically sitting on the edge of their seats waiting for some delayed homework assignments from November – namely, the jobs report and inflation numbers that got pushed back thanks to that government shutdown drama.
Here’s the deal: The November jobs report was supposed to drop ages ago, but Uncle Sam’s temporary office closure meant we’re all still waiting to see if the job market is thriving or just pretending everything’s fine (like most of us on Monday mornings). Economists are expecting a measly 50,000 new jobs, which honestly sounds about as exciting as watching paint dry.
But here’s where it gets interesting – and by interesting, I mean potentially profitable for your portfolio. Wall Street is currently in what Morgan Stanley calls a “bad is good regime.” Translation: If the jobs numbers suck, stocks might actually party because it means the Fed will keep cutting interest rates like they’re handing out free samples at Costco.
Speaking of the Fed, they just cut rates by another 0.25% last week and basically said, “Hey, we’re more worried about people having jobs than we are about your grocery bill getting more expensive.” Which is… a choice.
Thursday brings us the inflation report, and everyone’s expecting headline inflation to hit 3.1% year-over-year. Core inflation (that’s the fancy version that excludes food and energy because apparently those don’t count?) is expected at 3.0%. These numbers matter because they help determine whether the Fed keeps playing Santa with rate cuts or decides to be the Grinch.
And if all that wasn’t enough entertainment, we’re getting a parade of Fed speakers this week. It’s like a TED Talk series, but instead of “How to Find Your Purpose,” it’s “How We’re Going to Mess with Interest Rates Next Year.” Key players include Fed Governor Chris Waller and New York Fed President John Williams, who will probably say a lot of words that boil down to “we’ll see what happens.”
The market is currently pricing in a 26% chance of a jumbo 0.5% rate cut in January, which would be like the Fed saying, “You know what? Let’s really commit to this whole stimulus thing.”
Meanwhile, tech stocks are having an identity crisis. After getting absolutely demolished in November, they’re still trying to figure out if they’re actually worth their sky-high valuations or if we’re all just living in an AI bubble that’s about to pop like a kid’s birthday balloon.
The bottom line? This week’s data dump could set the tone for how we finish 2025 and kick off 2026. Will the jobs report be weak enough to keep the Fed dovish? Will inflation behave itself? Will Fed speakers actually say something useful instead of speaking in riddles?
Stay tuned, because in the world of markets, the only thing more unpredictable than the data is how investors will react to it.