Weekly Market Sparks – November 3, 2025
Talking Points for The Week That Was and The Week Ahead
Executive Summary Sparks
• Last Week: The Federal Open Market Committee (FOMC) delivered the widely-anticipated 25 bp cut, moving the federal funds target to 3.75 %-4.00 %. But the accompanying tone was more hawkish than many expected as Chair Jerome Powell stressed the path isn’t predetermined.
• The Week Ahead: Markets will dial in carefully on incoming PMI data, pending home-sales and labour market updates, plus commentary from global central banks (ECB, BoJ, BoE) that could sway sentiment.
• Market Wisdom: Stay invested. Stay diversified. Stay disciplined. In times of policy ambiguity, the best defense for long-term investors is adherence to a thoughtful plan.
Sparks From the Week That Was
• Market Performance: Equities closed last week at record territory, propelled by enthusiasm for tech, strong earnings, and policy signals. While the broad market moved modestly (the S&P 500 was up ~2 % for the week per recent data) the advance was narrow and led by a handful of mega-cap names.
• Economic Data: Housing prices surprised to the upside. The FHFA Home Price Index rose +0.4% m/m in August, the first rise after four declines and its highest monthly move since December 2024. Meanwhile the S&P/Case‑Shiller 20‑City Home Price Index also rose +0.2 % m/m in August, breaking five straight monthly declines. Both indexes continue to decelerate on a year-on-year basis.
• Sentiment & Confidence: The Consumer Confidence Index (via The Conference Board) drifted lower in October, at ~94.6, with the Present Situation sub-index ticked up but Expectations fell to ~71.5. Inflation expectations also edged higher (1-yr avg ~5.9 %).
• Bond & Credit Markets: Despite the rate cut, yields rose as the 10-year Treasury yield climbed back toward ~4.1 % and the 2-year popped above ~3.6 %. The hawkish tone and dissension at the FOMC undercut the easing-celebration story.
• Sector/Style Sparks: Large-cap tech remains the engine. Smaller-cap and equal-weighted indices lagged, underscoring breadth concerns: it’s a “narrow advance.”
• Other Noteworthy Sparks: The FOMC announced the end of its balance-sheet runoff beginning December. Trade-geopolitical dynamics, including U.S.-China truce chatter and the U.S. shutdown, also weighed on the backdrop.
Sparks for the Week Ahead
• Economic Data: Watch early-week PMIs, Tuesday’s trade-balance & JOLTS data, and Thursday’s productivity/ULC readings. These will help fill data gaps left by the government shutdown.
• Fed & Policy: All eyes remain on the FOMC. Not for a rate cut this week but for signals on December and 2026. The mixed message from Chair Powell means markets must calibrate expectations carefully.
• Markets & Earnings: Corporate earnings remain supportive, but near record highs mean the next leg may need broader participation. Global central-bank policy moves (ECB, BoJ, BoE) and any surprise from China or geopolitics could reset sentiment quickly.
Sparks of Market Wisdom
• The market’s upbeat tone masks two under-appreciated realities: (1) policy is not on autopilot, and (2) breadth is narrow. Those two serve as gentle reminders to stay diversified.
• When the crowd leans bullish, true discipline is rarely about doing something bold. It’s about keeping your plan in place and resisting the urge to chase momentum.
• If you’re invested, stay invested. If you’re diversified, stay diversified. If you’re disciplined, stay disciplined. These aren’t just clichés. They are the guardrails when clarity is low and complexity is high.
“It's a lot easier than you think to 'beat the odds' because the odds are based on average people. Show up and elevate.” — Dr. Julie Gurner (via Shane Parrish)
Invest Well, Be Well.
Rusty Vanneman | www.rustysbridge.com