Key Takeaways
- The US trade deficit widened significantly to $56.8 billion in November, marking the largest month-over-month increase since 1992, driven by a sharp decline in exports and a rise in imports.
- Mastercard (MA) reported robust Q4 2025 earnings, surpassing analyst expectations with adjusted EPS of $4.76 on revenue of $8.8 billion, and projecting low-teens net revenue growth for Q1 2026.
- US initial jobless claims for the week ending January 24 rose to 209,000, exceeding estimates, while continuing claims saw a slight decrease to 1.827 million.
- Chinese tech giants Alibaba (BABA) and ByteDance are poised to launch new generations of AI models next month, intensifying competition in the global artificial intelligence landscape.
- Canada's economy experienced a contraction in payroll employment by 26.2K in November, alongside a widening international merchandise trade deficit of -2.20 billion CAD.
The US economy is showing mixed signals as the trade deficit expanded considerably in November, reaching $56.8 billion. This figure significantly surpassed expectations of -$44.0 billion and marked a substantial increase from the previous month's -$29.4 billion, representing the largest month-over-month widening since 1992. Exports declined by 3.6% month-over-month, while imports fell by 5.0%.
In the labor market, initial jobless claims for the week ending January 24 rose to 209,000, exceeding the estimated 205,000 and up from the prior week's 200,000. Conversely, continuing jobless claims saw a modest decline to 1.827 million, slightly below the estimated 1.850 million. Meanwhile, US nonfarm productivity for Q3 remained strong at 4.9%, with unit labor costs falling by 1.9%, both in line with estimates.
On the corporate front, Mastercard (MA) delivered a strong performance in Q4 2025, reporting adjusted earnings per share of $4.76, significantly beating the estimate of $4.25. Revenue also exceeded expectations, coming in at $8.8 billion against an estimated $8.78 billion. The company reported a 7% growth in gross dollar volume on a local currency basis, reaching $2.8 trillion, and anticipates low-teens net revenue growth for Q1 2026.
The technology sector is buzzing with anticipation as Alibaba (BABA) and ByteDance announced plans to launch new generations of AI models next month. This development underscores the ongoing fierce competition and rapid innovation in the artificial intelligence space among global tech giants.
In other tech news, YouTube (GOOGL) is set to allow creators to generate Shorts using their own AI likeness. Conversely, Microsoft (MSFT) faces scrutiny as its Windows 11 online account requirement means data encryption keys are backed up to the cloud and could be provided to the FBI if requested. Additionally, TikTok has seen a rapid increase in user deletions in the US, with removals jumping nearly 150% in the five days following the app's transfer to US ownership.
Across the border, Canada's economy showed signs of weakness in November, with payroll employment decreasing by 26.2K, a reversal from the previous month's increase of 21.2K. The country's international merchandise trade deficit also widened considerably to -2.20 billion CAD, significantly larger than the estimated -0.69 billion CAD.
Geopolitical and policy discussions continue to shape the global economic outlook. ECB is expected to keep rates unchanged on February 5 but may address the euro's recent strength, which could impact inflation and the likelihood of future rate cuts. SEC Chair Paul Atkins has indicated that it is the "right" time to open the $12.5 trillion 401k retirement market to crypto. Meanwhile, New York City is grappling with a projected $10 billion budget deficit, leading to calls for increased taxes on high-income individuals and corporations.
Former President Trump has reiterated his commitment to an anti-immigration mission, with his administration reportedly working on a drawdown plan in Minnesota involving CBP and ICE staff. Trump also commented on trade, stating that tariffs are bringing in "billions" to the US, and criticized Jerome Powell for not cutting interest rates, arguing it harms the country's economy and national security. Bank of America is reportedly matching $1,000 government deposits for Trump accounts.
International relations remain tense, with Ukraine's President Zelenskiy stating that the country has "significantly diversified" gas supplies following Russian strikes. Ukraine's Defence Minister also confirmed cooperation with SpaceX after Russian drones were observed using Starlink. A Kremlin aide suggested that territorial claims are not the only unresolved issue between Russia and Ukraine. China's Commerce Minister met with the UK Trade Minister, signaling ongoing diplomatic and economic engagements. An expert also suggested that the US and Israel could use Iraq for provocations against Iran, potentially leading to regional confrontations.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.