After six weeks, the macroeconomic data that disappeared during the shutdown will begin to flow once more. The question Wall Street is asking is, will it be good, bad, or indifferent for the markets?

 

Readers should pay attention to the slew of expected government reports that are expected to be released this coming week. The Consumer and Producer Price Indexes, average hourly earnings, average weekly earnings, factory orders, durable goods, retail sales, housing starts, building permits, and the most important number of all, the non-farm payrolls (NFP) report, are expected to be announced on Friday. The markets are worried.

 

The NFP report will be critical. Investors believe that the Federal Reserve Bank will base its decision on whether to cut interest rates again at its Dec. 10 meeting on the state of the job market. Given that missing October inflation and jobs data may never be reported, according to the White House, it leaves the markets hanging and elevates the importance of the coming deluge of data.

 

At present, the Federal Open Market Committee is a hung jury, split roughly down the middle between voting members who want another rate cut and those who don't. The betting markets have dropped their view of a December rate cut from almost a sure thing to a little below 50/50.

 

The stock market has yet to discount those lower odds but is in the process of doing that right now. The Fed has made it clear that the health of the jobs market is just as crucial as reigning in inflation, if not more so. If the number of jobs continues to rise, that will give the Fed a reason to stand down and wait. The bulls are hoping to see some job losses, but not too many, just enough to reduce rates by another quarter point.

 

The bears contend that employment is dropping like a stone, and the numbers will prove it. They argue the Fed will need to cut by 50 basis points. Why would that be bearish for stocks? Because it could mean that a sharp decline in job growth would indicate the economy is rolling over. That would panic the markets. Oh, the webs we weave.

 

As readers surely know by now, the government shutdown is over, at least until Jan. 31. Then we get to do this all over again. If it were to happen again, markets, which had basically ignored the drama in Congress, might not be as understanding the second time around. What was the point of this one? Let me know if you figure it out. Otherwise, the country has lost billions of dollars or more in growth with nothing to show for it.

 

My own forecasts indicate that we will see less inflation over the next 2-3 months. While economic growth will moderate, it will not lead to a recession. Employment should decline somewhat. This is due to the ongoing labor disruption caused by the president's immigration policies and the displacement of jobs by AI. If I am right, the chances of another Fed cut are higher than the market anticipates.

 

On a side note, the CPI basket of items has been pared back under both the Biden and Trump administrations. The government has removed some of the worst inflationary components, including meat, coffee, new cars, trucks, and motorcycles, as well as long-term care and vehicle insurance, electricity, natural gas, and energy services. Given this list of excluded items, it is a mystery why anyone really believes that the CPI accurately reflects inflation.

 

Did you notice that the Trump administration is rolling back tariffs on beef, coffee, and bananas? I have been writing about how Trump tariffs are not only a tax but a tax on the food we eat, among other things. Donald Trump, his Treasury Secretary, and most Republican members of Congress have denied this, claiming that tariffs are not the cause of higher prices — until now.

 

Finally, the truth is coming out. Trump recently acknowledged that U.S. consumers are "paying something" for his tariffs. Don't look for him to admit the truth on his tariff taxes, especially in front of a Supreme Court decision on that subject.

 

In my last column, I mentioned that investors were worried that the AI boom in stocks had reached a peak. This week, we see the results of that narrative. AI darlings have led the decline, taking the rest of the market with them. Remember these two key points: the markets will remain volatile, and I expect a 4 to 6 percent decline in the averages.

 

This coming week, we also have the AI King of Kings, Nvidia, reporting earnings on Wednesday. At this juncture, where Nvidia goes, the market follows. Remember, do not think "down" when I use that word. Volatility cuts both ways, and given the global flows of money, that means both big up and big down moves. Strap in, stay invested, and hold off on buying dips for now.   

 

Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.

The president was correct last week when he stated that the cost of a Thanksgiving meal at Walmart will be lower this year. He neglected to add that this year's dinner contains six fewer products than its 2024 basket and only 22 items, compared to 29. I guess that is no surprise.

 

By this time, shrinkage is everywhere among products. This is a common tactic used by manufacturers to give the appearance of a larger product when, in fact, you're getting less. In the food category, it is running rampant, so why not at Thanksgiving? Cans are smaller. There are fewer items in smaller packages, and, of course, the "fool you" trick of keeping the package size the same but filling it with air.

 

Walmart, among other grocery stores, has announced a 25 percent drop in its 2025 Thanksgiving basket, serving 10 people. This means you, the savvy shopper, can save money this year and still provide a hearty meal for your family.

 

Wells Fargo's Agri-Food Institute provides an annual run-down of the year's prices for the typical Thanksgiving meal. This year, they predict that consumers will pay 2-3 percent less for their Thanksgiving meal, despite food-at-home prices increasing 2.7 percent so far in 2025. The latest Consumer Price Index report indicated that beef, bananas, and coffee were responsible for much of that increase, and (Praise Be) none of them are Thanksgiving staples.

 

As always, those numbers will depend on a shopper's strategies and food choices. For example, if you exclude beef and eggs from the menu, chances are the dinner will be cheaper. If you stick to store brands, a typical menu will come in at $80 versus $95 for a meal of national-name brand items.

 

Some national brands, however, use certain loss-leader items to keep in the running for your holiday dollars. Cranberries and frozen vegetables, for example, may be cheaper than store brands, so do your homework. As for dessert, stick with pumpkin pie, which is down about 3 percent in price from last year,

 

The dinner's pièce de résistance, the turkey, will also drop in price this year. Retail turkey prices are down 3.7 percent. Additionally, keep an eye out for sales. As of last weekend, I scored a 67 cents a pound frozen turkey and an 87 cents a pound ham at my local supermarket chain. Given that I am a bit of a skinflint, I usually buy several turkeys during the holiday season.

 

It is not that I especially crave the taste of a 20-pound big bird, but my dog loves them. At the current price of a 12-ounce can of dog food (between $2-$3), or a premium brand ($3-$7), the price of a turkey is a steal. I throw it in the oven, often while I am writing this column. Once done, I chop it up into bite-sized chunks and freeze it in baggies, except for the drumsticks, which my wife loves. But I digress.

 

Donald Trump has claimed that the only grocery item that has increased in price is beef. We all know that is not true. Why would the nation's president try to pull the wool over our eyes when dozens of food items continue to increase in price? One word — affordability.

 

He knows that consumers are faced with the rising cost of everything. It is an increasing hardship that has become even more difficult lately. Millions of Republicans as well as Democrats depend on SNAP to eat. The same can be said for those enrolled in Obamacare who face massive premium hikes.

 

 Tariffs, immigration, and peace deals may be nice, but they only go so far. The opposition is aware of this. Increasingly, Democrats have used this issue effectively, as evidenced by last week's elections. I suspect that this message of affordability is beginning to ring loud and clear in the Oval Office. I'll leave it at that because my oven (and my dog) are telling me my first roast turkey of the season is done.

 

For several years,  readers have asked me to establish a website where they can read my past columns and interviews. I am thrilled to announce that "The Retired Investor," a comprehensive collection of my writing and videos, past and present, is accessible online at www.schmicksretiredinvestor.com. I invite you to check it out and share your thoughts. Your feedback is invaluable to me.

 

Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.

It wasn't supposed to happen this way. Historically, November and December have been considered the best months of the year for stocks. The problem is that history has been turned upside down this year.

 

Take the fact that the U.S. Supreme Court is hearing a case on tariffs that have not been this high for 100 years. And then there are the lofty valuations of companies that are investing trillions of dollars in artificial intelligence. Many investors believe AI will usher in a new age for the world. And in case that doesn't convince you, the sudden weakening in private jobs for October was the lowest in years. That may not qualify as history, but the present administration's immigration policy and its impact on employment certainly do.

 

Now, some might argue that a decline would be beneficial for markets, as this melt-up in the averages has persisted for weeks. It has been so long since we have had more than a one- or two-day decline that most investors are conditioned to buy any dip, no matter how shallow.

 

But why now, you might ask. Perhaps because markets didn't decline as expected in September and October. Then there is the "what-if" scenario surrounding one of the lynch pins of Donald Trump's economic policy. "What if" the court rules against him? "What if" the government is forced to refund billions of dollars in collected tariffs? And if so, what will happen to the deficit that has been declining?

 

If you believe the president, who claims an adverse ruling on his tariffs could "literally destroy the United States," then you are most likely one of those who sold stocks this week. I suggest you read my latest column, "Trump's tariffs and the holidays," for my thoughts on any fallout from this court case.

 

Thanks to the continued government shutdown, which has now become the longest in history, the dearth of government data has forced markets to focus instead on private sector research data. One such data point released this week was from global outplacement firm Challenger, Gray & Christmas. It showed that last month was the worst October for layoffs announcements since 2003.

 

In the absence of the non-farm payroll data, which was scheduled to be released on Friday but wasn't, investors took the weak employment numbers at face value. Investors worry that, given the weakness was among existing job holders, rather than the absence of immigrants (legal or otherwise) seeking jobs, economic growth overall may be slowing.

 

At the same time, however, another service, ADP Private Payrolls, said the number of jobs added grew by 42,000 last month. The jobs were gained in the old economy, specifically in trade, transportation, and utilities. Great news for some, but none of those jobs came from AI-related industries.

 

Why is this important? Trillions of dollars are being invested in AI each year, including this year, last year, and the year before. This is the area that the market agrees will become a primary driver of economic growth in the future, starting now. Instead, information services and professional and business services lost jobs in an industry that should be hiring like crazy in these early stages of build-out.

 

More than 85 percent of companies that have reported quarterly results have beaten estimates; however, there is a catch. I had thought that these stellar earnings results would support markets. They have to some extent, but something is changing. Many of the AI names have declined after their earnings results were released.

 

That is a new behavior. In the past, traders have been buying AI stocks regardless of the company's earnings, whether good, bad, or indifferent. Investors are now questioning the sustainability of the AI boom and the ability of companies to justify their high valuations based on profit growth.

 

I half suspect that consumer holiday spending was front-loaded this year to avoid tariff-induced price hikes. If so, flat spending may not be taken kindly after years of increased end-of-year sales. Combine that with the AI valuation fears, tariff court case, and the government shutdown, and this wall of worry has grown too high for the average investor.

 

And even though the government shutdown continues, I maintain that it will be resolved sometime this month. Due to the increasing air travel fubar brought on by the shutdown, starting today, the FAA will cut 10% of flights at the 40 biggest airports as it prepares for a worst-case scenario of delays and canceled flights. Until now, most Americans have not been unduly affected by the shutdown. As Thanksgiving approaches, the holiday flight schedules will become far more critical to the nation. I expect irate calls to Congressional representative offices are climbing by the minute.

 

Marketwise, this pullback is a good thing. I have written several times in the last month that we needed a break from the relentless climb that has created an extremely worrisome condition in the markets. Hopefully, we will see a 5-6% decline in the averages, which will prepare us for a year-end rally. 

 

Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.

It is that time of the year when consumers begin planning for the holidays. It will also be a time when prices on almost everything are expected to rise. You can blame that on tariffs. After several months of absorbing rising import costs due to Donald Trump's tariff policies, American corporations have had enough.

 

Currently, approximately half of all goods imported into the United States are subject to substantial tariffs. Considering duties, limits, and other aspects of the president's trade policies, more than 90 percent of imports have been impacted in some way. This tariff debacle is truly a historic event, not seen in this country in over 100 years.

 

Up until now, the impact on U.S. consumers, who are already reeling from unrelenting inflation, has been negligible. That is because exporters and U.S. corporations have borne the brunt of these tariffs and the associated higher costs. The bad news is that Goldman Sachs economists believe that companies will now begin passing on as much as 70 percent of tariff costs via higher prices to consumers.

 

As it stands, predictions by research firms regarding consumers' willingness to spend over the next two months are mixed. Deloitte expects holiday spending to decline by 10 percent due to economic uncertainty, whereas Visa anticipates a 10 percent increase in holiday gift-giving. Gallup expects neither, with consumers spending about the same as last year. However, these forecasts assumed prices would remain in about the same range as before during the gift-giving season.

 

This week, all eyes were turned toward the Supreme Court. On Wednesday, the justices heard arguments over President Trump's unilateral decision to impose these steep tariffs on the world. Three lower courts have already rejected these tariffs on the ground that Trump illegally used a 1977 regulation, the Emergency Economic Powers Act, that grants presidents the power to regulate the economy during an emergency. This act was originally intended to deal with national emergencies, such as war or natural disasters, and its use in this context is a point of contention in the case.

 

At stake is the possibility that the court rules the tariffs illegal. As it stands, the lower courts have allowed the president to continue to collect tariffs until the higher court decides the case. And if the court rules against the president, will they also demand that the tariffs be refunded? 

 

The exact cost of a refund depends on when the case is decided and the amount that has been collected. We know the federal government raised $195 billion in customs duties in Fiscal Year 2025. Analysts expect that roughly $90 billion is in jeopardy. That amount dwarfs any refund the country has refunded in the past.

 

The tariffs collected and paid for by U.S. companies and American consumers have been used to reduce the country's deficit. If that were to be undone, some on Wall Street would not take that lightly because the deficit would balloon higher almost overnight.

 

On the plus side, if a refund were to be issued, corporations and exporters would benefit. Their profit margins would expand since they have paid the lion's share of costs year to date, as for what to we, the consumers, who have paid higher prices because of those tariffs, I see no chance of anyone giving me a refund for the grill or washing machine I purchased at a stiff mark-up this year.

 

No one should be surprised at this situation. Voters have long been aware that their president often takes shortcuts in everything he does, whether in business or politics. The betting market believes that the Supreme Court will rule against Trump's attempt to end-run the rules. The president's actions tell me that they may be right. Trump is preparing a Plan B in the event he loses. There are several laws already on the books that allow him to levy tariffs (with congressional approval), although the rate of tariff and the length of time are not open-ended. This process would take more time, but in the end, he could reinstate about 80-90 percent of the existing tariffs at lower rates. His administration has been working furiously on this fallback plan over the last two months.

 

Readers should not expect a decision from the Supreme Court anytime soon. The case is a thorny one involving the extent of presidential power and authority. It will impact U.S. relationships with numerous countries and could significantly undermine one of Trump's major policy initiatives. The judges know that they are walking a fine line.

 

If their decision is too draconian (i.e., no tariffs, refunds, etc.), this could have serious ramifications for everything from stocks and bonds to commodities, the dollar, and financial markets in general. They will likely find a middle ground that restrains the president but does not cause undue havoc in the financial markets.

 

The first day of hearings reportedly did not go well for Team Trump. The justices seemed skeptical of the president's authority to impose his most sweeping duties. In any case, it is unlikely that the verdict will be announced in time to save the holidays, although some optimists believe it could happen before the end of the year.

 

Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.

It was a classic case of "buy the rumor, sell the news." Even though the Fed did cut interest rates again and a deal between China and the U.S. was announced, investors failed to celebrate.

 

Markets were bid up in anticipation of these events long before they happened. A Fed cut has been in the works for approximately a month. Expectations that the two largest economies in the world would reach a satisfactory arrangement were also well telegraphed as early as last week. On Sunday, Scott Bessent, the U.S. Treasury Secretary, all but said the deal is in the bag.

 

However, investors did not get all they wanted in either case. Markets had already priced in another rate cut in December with an 87 percent probability. And then came the comments by Fed Chair Jerome Powell in the Q&A session after the FOMC meeting. "A further reduction in the policy rate at our December meeting is not a foregone conclusion — far from it. Policy is not on a preset course."

 

Oops, said the markets. By the close on Wednesday, the chance of a cut dropped to roughly 60 percent and markets opened lower on Thursday as a result. It also didn't help that two of the largest tech stocks in the universe, Microsoft and Meta, disappointed investors, causing a loss of over 1 percent in the NASDAQ.

 

And then there was the deal between Presidents Trump and Xi on Thursday. The two leaders agreed to roll back a bunch of trade barriers that had never been implemented. These tit-for-tat, double-dare threats between the two nations ultimately proved to be just that. The sweeping controls on rare-earth magnets and draconian restrictions on Chinese companies disappeared like hot air, at least for the next year. However, there was some good news for soybean farmers (including Scott Bessent) as China will resume purchases.

 

The administration and the media hailed the latest truce as groundbreaking, but I don't see it. No agreements were committed to paper, so there is no legal binding on anything. Their fundamental differences over Taiwan, technological supremacy, and national security were not even mentioned.

 

 To me, this so-called framework allows both leaders a win. Beijing gets to continue stringing things along, buying itself even more time to mitigate any potential downside of U.S. actions against it. Evidently, the markets agreed, as both Chinese and American stocks fell after the announcements.

 

The shutdown continues. Supplemental Nutrition Assistance Program (SNAP) benefits cease at the end of Friday, impacting one out of eight Americans. Saturday marks the start of the open enrollment period for health-care programs under the Affordable Care Act. Look for numerous stories next week about the higher premiums for insurance that many of the 24.3 million on the ACA will need to pay.

 

The president, suddenly appearing concerned over the shutdown, posted that it is time to eliminate the Senate filibuster, stating, "The choice is clear — initiate the nuclear option." There has been a slight thawing of the congressional ice jam, but make no mistake, it is not about those issues.

 

The facts are, as I have said in the past, November marks a period leading up to Thanksgiving when air traffic increases. Air traffic controllers have not been paid. Newark already shut down for a day this week due to a lack of personnel in the tower. This is one area of the government shutdown that could generate significant blowback, as thousands of inconvenienced travelers are suddenly confronted with flight delays.

 

Fortunately for the markets, the earnings of Apple and Amazon beat expectations after the close on Thursday. That reversed the damage, and the markets recouped nearly all their losses only to drop gain. Strong third-quarter earnings are supporting the markets. With more than 60 percent of companies reported thus far, over 84 percent have beaten estimates by a wide margin.

 

Entering November, markets continue higher. The only difference that I can see is that the gains have slowed, and markets are alternating between some down and some up days. The same drivers, AI and tech, continue to lead, with a few other sectors alternating between gains and losses.

 

Precious metals have slowed their free-fall and are now consolidating. I suspect they could still see lower prices, so be careful. Cryptocurrencies are doing the same. Overall, I advise readers not to chase here but only add on dips like we had on Thursday (1 percent or more in the averages).

 

Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.