Brace for More Volatility on a Holiday-Shortened/Thin-Liquidity Week

We’ll get new (but stale) data on Tuesday in a short Thanksgiving week.

Key Takeaways

Pent-Up Data Finally Being Released: Trading activity typically is light over Thanksgiving week (the market will obviously be closed on Thursday and only open until 1:00 p.m. ET on Friday), which means the recent wide gyrations in this increasingly volatile market are very likely to persist. We have key data on Tuesday (retail sales, PPI, consumer confidence, and pending home sales) and the slate of retail sector reports on how the holiday shopping season is playing out.

The AI Boom Masks Weakness Elsewhere: The must-read over the weekend goes to The A.I. Boom Is Driving the Economy. What Happens if It Falters? on page B6 of the Sunday NYT, with the tagline “A windfall for companies that build data centers and their suppliers is overshadowing weakness in other industries.” As we have been saying for some time now, strip out all the AI and related business spending so far this year, and the rest of the capex space has posted a -3% annualized volume decline.

AI Use Is Widespread but Not Yet Boosting Profits: In keeping with the KPMG survey of Canadian businesses that we highlighted last week, a McKinsey study just found that in the United States, 80% of firms state they have deployed A.I. technologies, but get this: 80% commented that these new technologies had “no significant bottom-line impact.”