To The Moon

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Overview

The US government shutdown officially ended on November 12th, lasting a record breaking 42 days. The government is now funded through January 30th, 2026, though no long-term agreement has been reached. For the final quarter of 2025, estimated GDP impact is 0.4% due to lost productivity and delays in contractor payments. The market overall rallied slightly, though given the agreement still ends with a fiscal cliff early in 2026 there was not much enthusiasm, especially given that October jobs data will likely not be available any time soon.

Equity markets were flat overall, ending the month up just 0.1% before the Thanksgiving holiday weekend.

The CBO released the full report for the Government’s fiscal year ending September 2025. The deficit as a percentage of GDP declined to 5.9%, still highly elevated compared to the pre-2020 average of 3.8%. Federal outlays grew by 4.0% with revenues rising 6.0%. A decline in corporate tax receipts was offset by tariff payments and income tax increases.

September payrolls beat expectations, with the US economy adding 119,000 jobs compared to just 50,000 expected. However, the unemployment rate did rise to 4.4%, compared to 4.3% in August and January’s 4.0%.

Shutdown impact will likely cloud data for November and October. Morningstar estimates that total annualized payroll additions will be 0.4% for the year, which is far slower than the annual average of 1.5% from 2017-2019, or 2024’s 1.5%. Excluding healthcare and social assistance, total employment has declined by 28,000 people.

Black Friday Gives Insight into Consumer Situation

Despite worries about consumer sentiment, Black Friday shoppers increased online shopping by 9.1% year over year in 2025, with overall shopping up 4.0% year over year. Retail likely saw decreases in real sales, with Mastercard estimating just a 1.7% increase nominally. The average discount rate was unchanged from 2024, with the average discount being 28% off.

While there was a record turnout for sales over the weekend, 58% of shoppers surveyed indicated that they had begun buying for the holidays sooner as retailers began rolling out deals earlier and keeping them later. Kantar noted that the major trend of the year thus far has been fewer impulse buys, with consumers focusing more heavily on pre-planned items. This is especially evident with younger shoppers, according to an impact.com survey, only 19% of Gen-Z customers see themselves making an impulse purchase this year.

In the pricing data, this was evident. Average selling price was elevated 7% year over year, with volumes down 1% according to Salesforce data. So, while discounts were still an average of 28%, the deals felt shallower than last year. Additionally, tariffs and the minimis exception repeal certainly limited consumer spending on typically imported items like fast fashion clothing or electronics.

BNPL (Buy Now Pay Later) service usage is estimated to reach another record, with a Bankrate survey indicating that 30% of consumers planned to spend less on the holiday season this year than last year. Around 41% of those who have used a BNPL service have paid late at least once (though 76% were late by only a week), with no single income group having a significant incidence above the mean. High ticket items like accessories, clothes, and electronics are still the highest volume BNPL items, with the majority of survey respondents only having 1-2 BNPL loans active at once. The most notable increase is 25% of respondents, compared to just 14% last year, have used a BNPL loan to pay for groceries. While the volume of BNPL loans is quickly growing and it is indicative in our view that more consumers are seeing it as a bridge to their next paycheck, it still does not appear consumers are engaging in risky credit behavior.

Yellowcake Bull Market

While oil prices remain depressed, Uranium prices have continued their price increases up 28% from march lows and settling at the end of November at $76.40/lb.

A supply crunch has derived from the largest supplier in the world Kazatoprom (controlling around 21% of the global market) exporting most production to Russia and China and signaling a 10% production decrease for 2026. This leaves just Cameco as the major supplier for the western world, controlling 17% of global output. While there are some private mines and some green/brownfield miners seeking startup, the immediate supply shortfall is difficult to meet given the extra strict regulation in Uranium mining and refining.

On the demand side, tech majors have continued to signal their interest in PPAs with SMR (small modular reactor) operators, in order to provide uninterrupted power to datacenters increasingly constrained by grid capacity. However, these SMR providers are also bogged down with both technical issues and the NRC’s (Nuclear Regulatory Commission) rigorous approval requirements.

The Neutrality Premium

With trade tensions between the US and China continuing into 2026 and renewed sanctions on Russia, commodity-rich countries that are seen as ‘neutral’ economies like Indonesia, Chile, and Kazakhstan have seen outsized gains. Countries that have avoided the brunt of US-tariffs have also surged, such as the broader Latin American market.

In the case of tariffs, multinationals diversifying the supply chain away from China while still wanting to utilize lower operating costs have rotated investment to Mexico, Vietnam, India, Indonesia and other regional manufacturing and shipping hubs. Ironically, according to research from Collins, it appears that China is also ‘nearshoring’ to the US, with Chinese linked companies drastically ramping planned foreign direct investment in Mexico.

For commodity rich nations, while geopolitical flexibility and a more neutral trade posture does provide benefits, it is not always a golden ticket. Despite a friendly trade environment and being rich in minerals and food exports decades of domestic mismanagement have left Argentina playing catch up.

GLP-1 Grocery Spending Down

The percentage of US adults taking GLP-1 weight loss drugs such as Ozempic and Wegovy has doubled to 12.4%. A further 24% state they’d consider doing so if certain conditions, usually cost, are met. In fact, most who stop GLP-1 stop because of cost prohibition reasons.

A PwC survey shows GLP-1 users spend 6-8% less on groceries within the first year of being on the drug, though most of that spending is reallocated elsewhere showing overall household spending only 2-3% as spending on other categories like wardrobe increases. Morgan Stanley estimates that overall spending on ultra processed foods could decline 3.0% by 2035 due to GLP-1s. While still limited to a smaller portion of the population, Walmart CEO stated during the November 2024 earnings call that GLP-1s were putting some margin pressure on the grocery segment of the company.

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