The U.S. government officially reopened in mid-November, allowing key agencies to resume economic data releases that had been delayed during the shutdown. These catch-up reports continued to paint a picture of moderate but positive economic momentum. GDP estimates for the third quarter continue to point toward above-trend growth with inflation easing but still sticky around 3%. The market continues to closely follow the labor market that is cooling, with unemployment gradually drifting higher. Consumer confidence remains pressured by elevated prices and slower wage gains, but overall spending has yet to show meaningful deterioration.
With economic data now available again, markets quickly refocused on the Federal Reserve as Fed officials have signaled that they are increasingly comfortable with the direction of inflation, and the discussion continues to focus on the next rate cut. Rate cut expectations firmed throughout the month and helped drive several strong equity rallies, though performance was uneven across sectors. In particular, technology related names saw renewed volatility as investors debated whether earnings expectations remain too optimistic. Meanwhile, fixed income continued to stabilize as investors priced in a more accommodative policy path for 2026 and beyond.
The reopening of the government allowed analysts to update their economic models, and it is increasingly clear that AI infrastructure has become one of the single largest contributors to U.S. economic growth this year. While the long-term opportunity remains substantial, we are approaching the space cautiously with the believe that at some point the supply and demand imbalance will begin to shift. As always, we remain focused on maintaining balanced, quality-oriented portfolios that can participate in structural growth themes like AI without relying on them to carry the entire investment outlook.
Information in this commentary is gleaned from third-party sources, and while believed to be reliable, is not independently verified. This content is not intended to be tax, legal, investment, or fiduciary advice. It has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. The strategies and/or investments discussed in this material may not be suitable for all investors. Bernardo Wealth Planning recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a financial advisor. Past performance does not guarantee future results.