Well, well, well. After more than a month of political theater that would make reality TV producers jealous, senators finally decided to do their actual jobs last night. They voted 60-40 to advance a stopgap funding bill that would reopen the government and keep the lights on through late January.
The market’s reaction? “Thank God, adults are back in the room!” All three major indexes are partying in green, with the Nasdaq leading the charge up nearly 2%. Because here’s the thing about Wall Street – it can handle bad news like a champ, but uncertainty? That’s kryptonite.
But Friday’s Consumer Mood Check Was… Yikes
Before we get too celebratory, let’s talk about Friday’s University of Michigan consumer sentiment survey. Americans’ economic mood has basically fallen off a cliff, hitting near-record lows with a reading of 50.3. That’s a 30% drop from last year – ouch.
Why the doom and gloom? Inflation worries, sky-high borrowing costs, the government shutdown drama, and people watching their savings accounts shrink faster than a wool sweater in hot water. We’re seeing that “K-shaped economy” everyone talks about – if you own assets, you’re floating; if you don’t, you’re drowning.
The Job Market Is Getting Spicy (And Not in a Good Way)
Here’s where things get really interesting. October’s job cuts report showed hiring at 14-year lows, but the real kicker? A jaw-dropping 153,000 announced layoffs – up 175% from last year. That’s well above the “uh-oh” threshold of 120,000 that historically screams “recession incoming.”
The culprits? “Cost-cutting” and “AI” – which are basically the same thing. Companies are discovering that robots don’t need health insurance or vacation days. Surprise!
Big Tech’s Trillion-Dollar Debt Party
Speaking of AI, the Magnificent Seven are throwing money at data centers like it’s confetti – we’re talking $6.7 trillion worldwide by 2030. But here’s the plot twist: they’re funding much of this with debt, and some of it’s happening off their balance sheets.
Meta just raised $27 billion in private debt for a Louisiana data center through a partnership that keeps it off their books. Sound familiar? If you’re getting Enron vibes, you’re not wrong. Sure, today’s accounting rules are tighter, but the structural similarity is… let’s call it “interesting.”
The Smart Money Play? Follow the Shovels
Instead of betting on who wins the AI race, why not invest in the companies selling the shovels? The AI buildout needs massive amounts of copper, aluminum, and platinum. Trump’s administration just added 10 minerals to the “essential for national security” list, including copper.
One trader recently scored 544% on a satellite company trade, and another made 700% on rare earth metals this summer. Not bad for playing the infrastructure angle.
Bottom line: Washington’s dysfunction is (temporarily) resolved, but the underlying economic tensions are still bubbling. The smart money is positioning for the long-term infrastructure plays while everyone else is still figuring out what just happened.