Good morning investors,
We kick off Tuesday with the November Jobs report at 8:30 AM with just 50,000 jobs expected as the labor market continues its "low-hire, low-fire" freeze that's making job seekers miserable. The jobs market has been further adding to the K shaped economy we have been experiencing where the higher end of society has been fine while the lower end are pinched.
Ford's stunning $19.5 billion EV write down while killing multiple battery models marks the industry's most dramatic retreat from electrification yet and the Nasdaq filed with the SEC to enable 23-hour trading, bringing Wall Street closer to crypto's always-on model. Tesla surged 3.6% to 2025 highs on confirmed driverless Robotaxi testing in Austin, pushing Musk's net worth to $600 billion.
Lets dive in.
Opening Bell: Tech Rotation Continues
Dow ($DIA ( ▲ 2.48% )) futures down 72 points with S&P ($SPY ( ▲ 1.92% )) futures off 0.3% and Nasdaq ($QQQ ( ▲ 2.11% )) futures falling 0.4%. ServiceNow plunges 11.5% premarket despite nearing $7 billion Armis acquisition as markets punish any AI-adjacent spending. Broadcom extends losses, down another 5.6% Monday as margin concerns persist.
The rotation trade accelerates with money flowing into financials, healthcare, and small caps while tech bleeds. This near-highs rotation signals strength, not weakness, as markets aren't folding, they're broadening.
Ford's $19.5 Billion EV Capitulation
Ford's ($F ( ▲ 0.58% )) massive write down and model cancellations represent complete strategic reversal. Killing the F-150 Lightning electric version for extended range hybrid, scrapping the T3 next-gen truck, and abandoning commercial EV vans shows Detroit accepting reality: consumers want hybrids, not pure EVs.
CEO Jim Farley citing "the market really changed over the last couple of months" understates the disaster. Ford bet the company on electrification, spent billions on capacity, and now admits defeat. The Trump administration's pro-oil policies provide political cover, but weak demand killed these models.
A whole industry that pushed towards EVs prior to the demand or infrastructure being in place to do so.
Nasdaq's 23-Hour Trading Revolution
Nasdaq seeking SEC approval for 9 PM to 4 AM additional session would leave just one hour daily without trading. Following crypto's 24/7 model makes sense given two-thirds of global equity value trades in U.S. markets with $17 trillion in foreign holdings.
Lower liquidity overnight creates volatility but improves price discovery. Banks reluctantly preparing infrastructure despite concerns about costs and risks. The genie's out that global demand for US equity access makes round the clock trading inevitable.
Tesla's Robotaxi Validation
Driverless Model Ys navigating Austin streets without safety drivers marks crucial milestone. The stock's approach to record highs reflects investors pricing in autonomous reality, not promises. At 100x forward earnings, Tesla ($TSLA ( ▲ 3.5% )) trades on Robotaxi dreams becoming tangible, and large scale advancements in their robotics division giving them a lead in that field.
Every successful autonomous mile justifies the valuation premium over legacy automakers, but at what point does the 100x get justified. The videos of empty Teslas driving themselves transform speculation into demonstration, and the technological advancement has been cool so see.
Tesla must continue to lead here and continue its push into AI and Robotics if it wants to remain alongside the other tech companies and try to justify this multiple.
Jobs Report: The Frozen Market
Today's November report expects just 50,000 jobs added with unemployment at 4.4%, but the real story is beneath headlines. Healthcare represents 47.5% of all 2025 job growth, any pullback there crashes the entire market. The hiring rate sits at pandemic and Great Recession lows while quits remain depressed.
Indeed Hiring Lab's question isn't whether the frozen market thaws but whether it cracks. Young Americans face especially brutal conditions with over half of employers rating the 2026 graduate market as poor or fair, matching pandemic depths.
This will be one of the biggest things the market and the Fed are watching into 2026.
Fed's Surprising Optimism
NY Fed President John Williams declaring the economy "poised to return to solid growth" seems disconnected from job market reality. His view we're near neutral rates and will "pick up steam next year" conflicts with businesses' hiring freeze and workers' pessimism.
Powell acknowledging "significant downside risks" and job creation "may actually be negative" sounds more realistic. The disconnect between Fed officials' public optimism and private concerns grows wider.
October Retail Sales Preview
October retail sales expected up 0.3% from September's 0.2%, providing first official consumer spending data since shutdown. With control group expected at 0.4%, any disappointment could trigger selling given stretched valuations.
S&P Global PMIs for December should show services around 54 and manufacturing near 52, confirming modest expansion. But with official data still playing catch-up, markets rely on imperfect private surveys.
Market Uncertainty Peak
December 15th marks the average yearly December low historically, and we're right on schedule for maximum uncertainty. AI spending concerns, inflation questions, Fed chair drama, and frozen job markets create perfect uncertainty storm.
Yet the markets rotating near highs rather than folding. Money isn't leaving, it's shifting from overvalued tech to undervalued sectors. This resilience despite multiple concerns suggests underlying strength.
Final Thought
Ford's $19.5 billion EV write down perfectly captures this market's brutal efficiency in punishing bad bets while rewarding adaptation. The company admitting defeat on pure EVs while pivoting to hybrids shows pragmatism trumping ideology. Markets reward honesty about failure over stubborn persistence.
The rotation from tech continues with companies like Broadcom and ServiceNow getting crushed while healthcare, financials, and small caps gain confirms broadening participation. This isn't bearish, it's healthy evolution from narrow speculation to sustainable advance.
Today's jobs report will likely confirm the frozen market persists, not catastrophic but certainly not healthy. Young workers facing pandemic level hiring difficulties while Fed officials proclaim optimism highlights the disconnect between Wall Street and Main Street.
My conviction remains: we'll see a Santa Claus rally before a choppy 2026's which contains an inevitable pullback at some point. The rotation near highs shows strength, not weakness. The market's resilience through peak uncertainty suggests higher prices ahead once clarity emerges.
December 15th as the typical December low means we might be through the worst already.
As always, feel free to reach out with questions about navigating this rotation.
Best regards,
Dan Sheehan
This newsletter is for informational purposes only and should not be considered as investment advice. Please consult with your financial advisor about your specific situation.