November 2025 Market Commentary | OnePoint BFG Wealth Partners

Monthly Update

If one went to sleep on November 1^st and woke up on November 28^th, the last trading day of the month, it would seem that nothing was missing and boring was the best way to describe stock market performance as the S&P 500 was about flat, up by .1%¹. For those of us who were awake and lived each trading day it was quite the wild ride instead. Intra month the index traded down by as much as 4.6%² from the October close to the intraday low on November 24^th, breaking below the 50-day moving average and testing the 100-day moving average. A vibrant five-day rally into the end of November saved the month. The NASDAQ fell 1.5%³ and was the main drag as something important I believe started to take place. The spectacular GenAI tech trade which started in earnest in early 2023 that brought so many stocks with it that touched this growing ecosystem, began to splinter where investors began the process of picking who will win and differentiated from those that might not. 

The main catalyst for the late month rally was the speech given by NY Fed president John Williams, a voter at every meeting. He said he favors another rate cut in the ‘near term’ which seems like code words for the December 10^th meeting. The rate cut odds prior to his speech were about 32%⁴. They immediately spiked after he spoke and as of this writing, they are at 78%⁵. We’ve clearly learned that Wall Street loves easier money and even long-term rates fell too. Whether long rates will continue to drop I’m skeptical because on the flip side, long term interest rates have been rising around the world, particularly in Japan where the Bank of Japan is expected to increase rates on December 19^th. And, while the Fed has cut interest rates, before the December move, by 150 basis points beginning in September 2024, the 10-yr yield is barely down from that summer.

I’m sure you’ve heard the question of whether we are in an AI bubble or not but that’s way too vague that needs important context and conciseness. The question should instead be, are we in a GenAI CapEx bubble as AI has been evolving for many decades and will continue to do so in the decades to come. To dig deeper, while the demand for computing power is growing tremendously, investors are beginning to ask the tough questions on whether companies building the physical infrastructure of this data center buildout are overspending on an unproven model in monetizing it. For context, the large hyperscalers have increased the rate of their CapEx to about 50-75%⁶ of EBITDA and relative to revenue, CapEx has gone up 2x-5x depending on the company from where it stood before 2022. And more of this spending now is being debt financed. For those students of market history, we know the winners that came out of the internet buildout in the late 1990’s were not the infrastructure builders but those companies that layered their business on top of it, aka, the users of the internet.

In the late 1990’s, Cisco Systems was considered the backbone of the internet, and its stock was well rewarded up until 2000 when it crashed along with everything else. What came back the quickest though were those businesses built using the pipes of the internet, such as Amazon. Many so called ‘picks and shovels’ companies like fiber optic builders, networking equipment, etc…needed to build the infrastructure, never made it out. Cisco stock by the way 25 years later is still below the March 2000 peak. Whether history is repeated or not we’ll of course have to see but maybe at least for now we are transitioning the GenAI tech trade to market differentiation between the perceived winners and losers. And then we’ll get to see who is best at integrating it into their businesses and households.

Also to think about is the growing competition coming from Chinese tech companies who are building out their own large language models with the growing compute help from their own semiconductor chips and infrastructure. While most of the US LLM models are close sourced, China is going down the path of open source which means they are essentially giving them away for free. In terms of getting customers around the world for these models, China is going to be an intense, price competitive challenger.

I bring this all up because it is important to understand how reliant the US economy and the US stock market has become on both the AI tech trade and the data center buildout. Within the S&P 500, the top 8 stocks make up almost 40%⁷ of the index, extraordinarily concentrated all with heavy exposure to GenAI’s ecosystem. With regards to the economic impact of the infrastructure buildout of GenAI, I’ve seen estimates that it made up about 50%⁸ of the first half GDP growth of 1.6%⁹. Thus, without this CapEx, GDP growth would have been less than 1%¹⁰ on an annualized basis over the first two quarters of 2025.

November also saw the end of the government shutdown, which wasn’t really a market concern anyway as we all knew it was eventually going to reopen. It was though a pain for travelers, those government workers who saw delays in getting paid and contractors to the government that had work disrupted. As taxpayers, I think it’s safe to say that we all pay for a government that should not close. Anyway, the GDP implications of the shutdown are negligible though in the context of a $30 trillion economy.

International stocks in November took a breather too but the year-to-date gains are still very impressive after years of underperformance relative to the US S&P 500. With the help of a weaker US dollar, here are some of the year-to-date index performance numbers as of this writing. For a US based investor, the Spanish IBEX is up 59%¹¹, the Italian MIB higher by 42%¹², the German DAX has rallied 33%¹³, the Hang Seng is up 29%¹⁴, the Japanese Nikkei higher by 25%¹⁵ and the South Korean Kospi is up a whopping 65%¹⁶ helped by large gains in Samsung and SK Hynix.

I highlight this to show that in 2025 investors widened their lens of investing opportunities with regards to not just geography, but even to small and medium size stocks that have done well, along with parts of the value parts of the market. Other asset classes too have had a good year, such as precious metals. I expect these trends to continue past 2025.

There really hasn’t been much change in global economic trends. The US economy still remains very mixed and uneven. The big positive, as stated above, is of course the data center buildout but the economy is also getting a lot of help from upper income consumers who are benefiting from owning stocks and their home. On the other hand, manufacturing and housing are in a recession while lower to middle income consumer spending remains muted especially for those that don’t own stocks and are renting their homes. With respect to the labor market, the pace of firing’s remains muted, but the rate of hiring’s has clearly slowed as seen in a variety of metrics.

Globally too the economy is mixed and uneven. Within Europe, Germany and France are seeing sluggish activity but Spain, Greece and Portugal are seeing strong growth. In Asia, China’s growth has slowed, though with pockets of strength, but Southeast Asia continues to power along.

Conclusion

Interesting times we are in with always so many moving parts and with much focus in particular on the GenAI tech trade and buildout. We are now all tech experts but as said earlier, the high dependency on it sort of forces us to be.

Something I say every letter, that regardless of what is going on out there, it remains vital that investors have adequate short-term liquidity over the next 2-3 years; knowing that period is covered can help separate the balance of one’s portfolio from the ups and downs of the market. Time horizon is always crucial and is always the best friend of any investor.

Disclaimer

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. The market and economic data is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. The information in this report has been prepared from data believed to be reliable, but no representation is being made as to its accuracy and completeness.

Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services.

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Certain statements contained herein are statements of future expectations and other forward-looking statements that are based on opinions and assumptions that involve known and unknown risks and uncertainties that would cause actual results, performance or events to differ materially from those expressed or implied in such statements. 

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 Peter Boockvar is solely an investment advisor representative and Chief Investment Officer of OnePoint BFG Wealth Partners.

^1-16 Bloomberg

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