US Economic Activity Little Changed Ahead of Next Fed Meeting, Beige Book Report Shows

Central Bank

Economic

Summary:

Published two weeks ahead of each Fed policy meeting, the report is meant to help central bankers assess the U.S. economy's health with more timely, and often more colorful, insight than is available in the official statistics.

U.S. economic activity was little changed in recent weeks, though employment was weaker in about half of the Federal Reserve's 12 districts and consumer spending declined, the U.S. central bank said on Wednesday, likely reinforcing concerns about labor market softening.

"Economic activity was little changed since the previous report, according to most of the 12 Federal Reserve districts, though two districts noted a modest decline and one reported modest growth," the Fed said in its latest "Beige Book" report, a compendium of survey results, interviews, and other qualitative data from its 12 regional banks.

"Employment declined slightly over the current period with around half of districts noting weaker labor demand," the report said. "Despite an uptick in layoff announcements, more districts reported contacts limiting headcounts using hiring freezes, replacement-only hiring, and attrition than through layoffs."

With the data vacuum left by the record 43-day government shutdown that extended into mid-November, the Beige Book should get more weight than usual in the deliberations among deeply divided Fed policymakers, following their decision last month to cut rates by a quarter of a percentage point for the second consecutive meeting. The policy rate now stands in the 3.75%-4.00% range.

The data flow has resumed since the shutdown ended, but most of the reports issued over the past two weeks have been significantly dated, covering the period just before the shutdown began on October 1, and have offered almost no fresh insight into the health of the economy.

MARKETS BETTING ON ANOTHER RATE CUT NEXT MONTH

One of the most current indicators, however, suggests the job market remains in a stable, gradually softening state.

New claims for unemployment benefits fell last week to the lowest level since April, though the ranks of those remaining on benefits beyond a first week of assistance has plateaued near the highest level in about four years. Together, the figures point to no notable increase in layoffs despite a wave of job-cut announcements from big employers like Amazon.com, though those out of work are finding it harder to land a new job.

Interest rate futures markets are reflecting a high probability of a third straight quarter-percentage-point reduction in borrowing costs at the Fed's December 9-10 meeting.

Until last week it had been seen as a coin-toss decision amid deep divisions among Fed officials about whether more easing is needed to protect the job market or is too risky in light of inflation that remains above the central bank's 2% target. But the probability shifted sharply in favor of a rate cut after New York Fed President John Williams last week said he saw room to lower rates "in the near term."

Whatever the decision at next month's meeting, it is likely to be made over the objections of several policymakers, and will come alongside a fresh batch of forecasts from Fed officials that will show how inclined they are to bring rates down further next year.

Source: Reuters

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Manuel

Cryptocurrency

Political

Texas has taken the first formal step toward becoming the first US state to hold Bitcoin as a strategic reserve asset.

On Nov. 25, Lee Bratcher, president of the Texas Blockchain Council, reported that the world’s eighth-largest economy, valued at $2.7 trillion, purchased $5 million worth of BlackRock’s spot Bitcoin ETF, IBIT.

He added that a second $5 million allocation is already lined up for direct Bitcoin acquisition once the state finalizes a custody and liquidity framework required under a new reserve law.

The two tranches create a bridge between today’s institutional rails and a future in which governments do not just buy Bitcoin but hold it.

Texas builds the first state-level blueprint

The initial exposure did not go directly on-chain. Instead, Texas entered via IBIT, which has become the default wrapper for large allocators seeking Bitcoin access within familiar regulatory and operational infrastructure.

This purchase was enabled by Senate Bill 21, a law signed by Governor Greg Abbott in June that established the Texas Strategic Bitcoin Reserve.

The framework allows the state Comptroller to accumulate Bitcoin so long as the asset maintains a 24-month average market capitalization above $500 billion. Bitcoin is the only cryptocurrency that meets the threshold.

The structure places the reserve outside the state treasury, sets governance channels for how the assets are held, and introduces an advisory committee to monitor risk and oversight.

Meanwhile, the first $5 million is small relative to the scale of state finances, but the mechanics matter more than the number.

Texas is testing whether Bitcoin can be formalized as a public reserve instrument within a state-level financial system that already manages hundreds of billions of dollars across different pools.

Once the operational processes are in place, the second tranche will involve self-custodied Bitcoin, which introduces very different implications for liquidity, transparency, and audit practices.

The state is designing procedures that resemble sovereign-grade custody rather than institutional brokerage. The reserve will require a qualified custodian, cold-storage capacity, key management protocols, independent audits, and reporting schedules.

These are the building blocks of a repeatable template that other states could adopt without reinventing the governance architecture.

Why BlackRock’s IBIT comes first

The decision to enter through IBIT was not a signal of preference for ETFs over native Bitcoin. It was an operational workaround.

IBIT is only in its second year, yet it has emerged as the most widely held Bitcoin ETF among major institutions. The fund is the largest Bitcoin ETF product, with cumulative net inflows of more than $62 billion. Why Texas is Buying Bitcoin From BlackRock Before Building a Real Reserve_1

Why Texas is Buying Bitcoin From BlackRock Before Building a Real Reserve_1

Moreover, the apparatus for public-sector self-custody does not exist in most jurisdictions, and creating that infrastructure requires procurement, security modeling, and political signoff. So, the state used IBIT as a placeholder, a temporary facility that allows it to express exposure while finalizing the permanent structure.

This detour is instructive because it mirrors the trajectory of other large allocators.

Harvard University disclosed that IBIT became one of its largest US equity holdings in the third quarter. Abu Dhabi Investment Council tripled its IBIT exposure over the same period, reaching roughly eight million shares. Wisconsin’s pension system disclosed more than $160 million across spot Bitcoin ETFs earlier this year, also routed through IBIT.

The pattern is clear. Large institutions with different mandates, geographies, and risk frameworks are gravitating toward the same instrument. IBIT offers custody through a known intermediary, simplified reporting lines, and a clean accounting presentation under the new fair-value rules that took effect in 2025.

These conveniences have turned the ETF into a de facto entry point for public and quasi-public entities. Texas is unique only in the fact that its IBIT exposure is meant to be temporary.

What happens if others follow?

The broader question is whether Texas becomes an anomaly or a blueprint.

Bitcoin analyst Shanaka Anslem Perera said: “The cascade is mathematical. Four to eight states are positioned to follow within eighteen months, collectively commanding over $1.2 trillion in reserves. Institutional inflows projected between $300 million to $1.5 billion in near-term mimicry. This is not speculation. This is game theory in motion.”

Already, politically aligned states like New Hampshire and Arizona also have Bitcoin reserve laws because they view the top crypto as a strategic hedge to the global financial system.

More states could follow, as they could use their structural surpluses to allocate to Bitcoin for diversification, especially under the new accounting standards that neutralize earlier mark-to-market penalties.

Moreover, the implications of state-level involvement extend beyond symbolism. ETF purchases do not alter the circulating supply because the trust structure issues and redeems shares without removing coins from liquid markets.

Self-custody does the opposite. Once coins are purchased for cold storage, they leave the tradable float, reducing the supply available to exchanges and market makers.

This distinction matters if Texas scales the reserve beyond its initial $10 million. Even modest state-level demand introduces a new type of buy-side participant, one that behaves countercyclically to noise traders and does not churn positions.

The effect resembles a stabilizing anchor rather than a source of volatility. If other states adopt similar policies, the Bitcoin supply curve becomes more inelastic, increasing price sensitivity.

Source: Cryptoslate

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Adam

Economic

Key financial metrics

Alibaba reported RMB247.8 billion in revenue (versus consensus estimate of RMB242.7 billion) for the second quarter of fiscal year 2026, representing a 5% year-on-year (YoY) increase whilst remaining flat quarter-on-quarter. However, non-GAAP diluted earnings declined 71% year-on-year to RMB4.36 per American Depositary Share (ADS), approximately 20% below analyst expectations. This substantial contraction in profitability reflects the company's aggressive capital allocation towards strategic growth initiatives.

Cloud business exceeds expectation

The Cloud Intelligence Group sustained its position as the primary revenue growth driver, advancing 34% YoY to RMB39.8 billion during the quarter. AI-related products demonstrated triple-digit growth for the ninth consecutive quarter, underscoring sustained momentum in this critical segment.

Chief Executive Officer Eddie Wu addressed market concerns regarding an AI bubble during yesterday's earnings call, indicating the company maintains confidence in the sector’s prospects in the next three years. He articulated Alibaba's strategic commitment to expanding AI infrastructure capabilities to accommodate surging market demand and navigate intensifying competitive pressures within the rapidly evolving technology landscape.

The company is positioning itself to establish leadership within China's consumer AI applications sector, particularly given the absence of Google's Gemini and OpenAI's ChatGPT in the domestic market. Alibaba's proprietary AI application Qwen achieved over 10 million downloads within four days of launch this month, surpassing the initial adoption trajectory of DeepSeek upon its market entry.

Core retail business demonstrates resilience

Supported by government consumption stimulus measures and enhanced marketing expenditure, Alibaba's local e-commerce segment recorded 16% revenue growth – the fastest expansion rate since 2021. The company prioritised operational efficiency improvements within its quick commerce operations, yielding enhanced customer retention metrics and elevated average order values.

The Singles' Day Shopping Festival successfully generated double-digit consumer growth YoY on the Taobao platform, substantially supported through promotional discounts underwritten by the retailer. These outcomes will be reflected in third quarter financial results.

Marketing spend and AI investment constrain profitability

However, the robust revenue growth trajectory came at considerable cost. Sales and marketing expenses more than doubled to RMB66 billion as the company competes for market share against rival quick commerce platforms including JD.com and Meituan. Adjusted EBITDA for the China E-commerce Group contracted 76% YoY. We anticipate marketing expenses will remain elevated in the near term.

Alibaba's balance sheet position has deteriorated, reflecting a net cash flow outflow of RMB21.8 billion last quarter. An 80% YoY increase in capital expenditure served as the primary driver, as the company pursues aggressive investment in AI infrastructure development.

Share price analysis

Alibaba's ADR initially advanced approximately 3% during US pre-market trading following the results, though this optimism swiftly reversed as investor concerns regarding AI expenditure and margin compression intensified. Hong Kong-listed shares also opened lower today. Despite closing 2.3% lower in US markets yesterday, the security has delivered 86% year-to-date gains, significantly outperforming the MSCI China Index.

From a fundamental analysis perspective, the stock's 12-month forward price-to-earnings ratio has expanded considerably from 12 times to 18 times over the past six months. As market participants increasingly focus on profit-taking ahead of year-end, a retracement following the sustained rally since April appears unsurprising.

From a technical analysis standpoint, the share price has rebounded from $148.6, approximately a 50% Fibonacci retracement level from the recent upward wave. The recovery trajectory will encounter resistance around $182.5. Maintaining support above the 200-day moving average at $135.1 remains critical for sustaining the ascending medium-term trend. Failure to hold this level may trigger further downside towards the $115–$120 range.

Figure 1: Alibaba daily price chart

as of 26 November 2025. Past performance is not a reliable indicator of future performance.

Source: ig

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Manuel

Bond

Central Bank

Mortgage rates dropped slightly this week amid new signals that the labor market is weakening and the Federal Reserve will cut interest rates again next month.

The average 30-year mortgage rate was 6.23% through Tuesday, according to Freddie Mac data, down from 6.26% a week earlier. The average 15-year mortgage rate was 5.51%, from 5.54%.

The 10-year Treasury yield, which mortgage rates closely track, has been falling as odds of a benchmark rate cut in December are on the rise. In recent days, New York Fed president John Williams, San Francisco Federal Reserve president Mary Daly, and Federal Reserve Governor Christopher Waller have all signaled in interviews or speeches that they would support cutting next month.

Consensus about a December rate cut is growing as new data suggests the labor market continues to weaken. This month, job losses at private employers sped up, according to data released on Tuesday by payroll processor ADP.

Traders now see an 83% chance of a 25-basis point cut at the Fed’s Dec. 9-10 meeting, according to CME FedWatch. Although mortgage rates aren’t directly controlled by the Fed, they do move based on expectations about future Fed interest rate policy.

Another cut "could bring mortgage rates near 2025-lows just as the year comes to a close," Jake Krimmel, Realtor.com senior economist, said in a statement.

"This would give homebuyers something to be thankful for heading into 2026, while potentially buoying a housing market which has seen some light tailwinds of late," he added.

Treasury yields and mortgage rates also moved lower on Tuesday after Bloomberg News reported that White House National Economic Council Director Kevin Hassett, a close ally of President Trump and a supporter of lower rates, is seen as the likely frontrunner to succeed Jerome Powell as Fed Chair.

Mortgage rates have been hovering around year-to-date lows of 6.2% to 6.3% for most of this fall, bringing some buyers back into the market. Contract signings jumped 1.9% in October from a month earlier, new National Association of Realtors data showed. Applications to purchase a home were up 8% through Friday compared to a week earlier, according to the Mortgage Bankers Association.

Source: Yahoo Finance

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Justin

Economic

The U.S. Supreme Court postponed on Wednesday a decision on whether to let Donald Trump remove the government's top copyright official in the latest battle over the Republican president's targeting of federal officials.

The action by the justices temporarily leaves in place Shira Perlmutter as the U.S. register of copyrights and director of the U.S. Copyright Office after a lower court blocked Trump's firing of her while her legal challenge to her removal proceeds.

The Supreme Court's order indicated that it would issue a decision on Perlmutter's case after it hears arguments that have already been set in two other cases involving Trump's firing of a Democratic member of the Federal Trade Commission and his attempt to fire Federal Reserve Governor Lisa Cook.

Perlmutter was notified on May 10 by a Trump administration official that she had been fired. Her duties as the government's top copyright official have included serving as the primary adviser for Congress on copyright issues.

Trump's move to terminate Perlmutter came a day after her office circulated a report finding that some unauthorized uses of copyrighted works carried out by tech firms to train generative artificial intelligence systems may be unlawful. Her lawyers have said in legal papers that Trump sought to remove her from her job because he disagreed with the report's findings on AI.

Trump in mid-May also fired Librarian of Congress Carla Hayden, who has not challenged her removal. The president then moved to replace Hayden with Todd Blanche, his former criminal defense attorney and current deputy attorney general, the No. 2 role at the Justice Department.

Blanche, in his capacity as acting head of the Library of Congress, which oversees the U.S. Copyright Office, purported to ratify Trump's decision to remove Perlmutter.

Perlmutter on May 22 sued to block her firing. She argued among other things that Trump lacked the authority to appoint Blanche as acting Librarian of Congress because that office is not an executive branch agency, but rather is part of the legislative branch.

The U.S. Constitution divides the powers of the U.S. government among the executive, legislative and judicial branches.

Washington-based U.S. District Judge Timothy Kelly, a Trump appointee, in July rejected Perlmutter's request to preliminarily block her firing, finding she had not suffered "irreparable harm" that would justify reinstating her.

On appeal, a divided three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit in September embraced Perlmutter's argument and reinstated her while her case continued to play out.

Judge Florence Pan, an appointee of Democratic former President Joe Biden, wrote that Trump's purported ouster of Perlmutter amounted to an "attempt to reach into the Legislative Branch to fire an official that he has no statutory authority to either appoint or remove."

"The president's purported removal of the Legislative Branch's chief adviser on copyright matters, based on the advice that she provided to Congress, is akin to the president trying to fire a federal judge's law clerk," wrote Pan, joined by J. Michelle Childs, a fellow Biden appointee.

The D.C. Circuit's ruling prompted Trump's filing to the Supreme Court. Lawyers for the administration argued in court papers that Trump's appointment of Blanche as acting Librarian of Congress was authorized by federal law. They also argued that Trump's power under the Constitution's Article II, which delineates presidential authority, permitted him to fire Perlmutter directly because her office is part of the executive branch.

The administration has repeatedly asked the justices this year to allow the implementation of Trump policies impeded by lower courts. The Supreme Court, which has a 6-3 conservative majority, has sided with the administration in almost every case that it has been called upon to review since Trump returned to the presidency in January.

The court has in a series of decisions in recent months allowed Trump to remove various officials. It has scheduled arguments in two cases involving presidential powers to remove certain types of officials, including his moves to fire Federal Reserve Governor Lisa Cook and Federal Trade Commission member Rebecca Slaughter.

Source: Investing

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Adam

Economic

Risks remain, but the S&P 500’s (SPY) uptrend is intact. The November correction was more of a broad-market consolidation, setting the market up for another leg of the rally, likely to unfold in December. This is an examination of three major themes driving S&P 500 price action and why it’s set up to advance to new highs before year-end.

Will the S&P 500 Rally in December? These 3 Signals Point to a Big Move Ahead_1

Macro-Economic Headwinds Ease

Macroeconomic uncertainty has been causing significant concern among investors throughout the year. Uncertainty is linked to trade relations, tariff impacts, and, more recently, the government shutdown. The story for December is that the government shutdown is over, trade relations aren’t deteriorating, and there has been some relief regarding tariffs.

Primarily, the impact of tariffs on Q3 results was far less than expected. The average S&P 500 company outperformed its consensus estimate by more than 600 basis points, which is well above average, and the Q4 season is likely to follow a similar trend.

While the Q3 results outperformed, and most companies improved their guidance, the Q4 consensus forecast remained unchanged. The likely outcome is that Q4 results will outperform by a similarly large margin.

Meanwhile, the FOMC remains on track to cut rates in 2026. The outlook for cuts has dimmed, but there is still an expectation of another two to three 25-basis-point cuts by next summer. The odds for a cut in December are also significantly high and may increase as the month progresses.

With the government shutdown over, government-collected data is being released, and it aligns with healthy, albeit cooler, economic conditions compared to the previous year.

Retail Earnings Were Good, Guidance Was Increased

There were some areas of weakness in the retail sector’s earnings data, but the overall trend was bullish. Most retailers grew revenue and earnings, produced solid margins, and provided favorable guidance. The takeaway is that Black Friday and Cyber Monday sales events mark the beginning of the holiday shopping season and are likely to exceed forecasts.

As it stands, holiday spending is expected to increase by 3% to 3.5% with strength centered in eCommerce. Deals and value will be a driver, positioning off-price retailers and Walmart as winners. Among the critical factors for investors is that retail leaders like Walmart (NYSE:WMT) and TJX Companies (NYSE:TJX) have solid cash flow, pay attractive dividends, and repurchase shares, sometimes aggressively.

The next visible catalyst is the Q4 reporting cycle in January. Still, analysts could drive this sector higher before then with revenue, earnings, and stock price target revisions linked to Q3 results and early holiday spending data.

The AI Trade Is Reignited

Fears of an AI bubble bursting were laid to rest by NVIDIA’s (NASDAQ:NVDA) Q3 results, which showed stronger-than-expected growth, and by subsequent news that Amazon (NASDAQ:AMZN) plans to invest up to $50 billion in AI infrastructure for U.S. government contracts. Together, these developments reinforce the durability of AI demand across both commercial and public sectors.

The NVIDIA release confirms that its AI business is larger than initially thought, growing faster than anticipated, and accelerating in the second half of the year. This has it set up to outperform in the current and following quarters and to sustain strength long into the future.

The S&P 500 remains on course to hit the 7,300 mark soon. The move may not occur before the year’s end, but the rebound is likely to start by then, and new highs will quickly follow. Notable technical indicators include the stochastic oscillator, which has retreated to the middle of its range, indicating a market that has rebalanced itself and has ample room to move higher.

Source: investing

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Adam

Economic

Sales are dropping across the world's three biggest markets: Europe, China and the US. In Europe, yesterday the ACEA announced that Tesla registrations fell by 48.5% y-o-y in October. Since the start of the year, they are down 30%, even with the electric-vehicle market having grown by 26%. In October, the American group's market share slipped to 0.6%, with under 7,000 Teslas sold across Europe (EU, EFTA, UK).

Global Tesla sales are expected to decline by 7% in 2025, after an initial 1% drop in 2024, according to Visible Alpha - and this is despite a record Q3, boosted by a rush of US buyers ahead of the expiry of a tax credit. In Europe, sales are still suffering from calls for a boycott that erupted at the end of 2024 after Musk publicly backed far-right figures. Even though he has kept a lower profile since then, a rebound has yet to materialise. Analysts point to an ageing line-up facing a broader, often cheaper, competitive offering.

An ageing line-up

The situation in Europe is critical. Over a dozen electric models there sell for under $30,000, while Chinese brands are pouring in with boldly designed vehicles and a wide range of options. Tesla only offers two mass-market models in the region: the Model 3 and Model Y. An entry-level Model Y was launched to revive sales, with little effect. In October, China's BYD sold more than twice as many vehicles as Tesla. Volkswagen, which has long struggled to keep up, has seen its EV sales soar 78.2% this year to 522,600 units, three times Tesla's total (180,688). "The problem for Elon Musk is not just his cars or the Chinese brands," sums up Ferdinand Dudenhoeffer of the University of Duisburg-Essen. "The problem is that Europeans have caught up".

In China, Tesla's sales fell 35.8% in October and are down 8.4% for the year. The market is awash with fast-moving local brands such as Chery or Xiaomi, whose YU7 is overshadowing Model Y. In the US, after a peak in September (+18%), sales plunged 24% in October. With some rivals such as General Motors, Ford or Honda slowing their electric investments, Tesla could well benefit. The launch of cheaper versions of the Model 3 and Y could also help it defend its market share. However, with no new model on the horizon, as instead Musk focuses on robotaxis and humanoid robots, the outlook remains uncertain.

A stock trading at 327 times 2025 earnings

For now, investors are clinging to the idea that cars are not necessarily Tesla's future - at least not its main one. The share price is still up 4% this year. This is less than the broader market (15% for the S&P 500 and 19% for the Nasdaq 100), although is striking given the company's poor commercial performance and weakening results. The company's P/E multiple climbed from 34x in 2022 to 198x in 2023. It is expected to rise to 327x this year, and to fall only to 221x in 2026 and 148x in 2027, according to analysts. Such multiples would be justified only by strong growth - something hard to imagine in the current environment.