Key Takeaways
- S&P Global lowered the probability of a U.S. recession to 20%–25%, down from 30% in September, citing resilient economic growth.
- Federal Reserve official Mary Daly stated the labor market has stabilized following 75 basis points of rate cuts, though she warned that tariffs are making the "last mile" of inflation difficult.
- Meta Platforms (META) is reportedly cutting staff stock awards for the second consecutive year to manage expenses amid heavy AI investment.
- HSBC (HSBC) is reducing its U.S. Debt Capital Markets team by 10% as part of a strategic restructuring under new leadership.
- President Trump criticized health insurance companies over recent stock gains and declared that his administration has "solved" the issue of national affordability.
S&P Global has significantly upgraded its outlook for the U.S. economy, reducing the probability of a recession starting within the next 12 months to a range of 20%–25%. This revision from the previous 30% estimate is driven by the firm’s Business Cycle Barometer, which highlights a resilient growth trajectory. Analysts noted that while tech and AI-related valuations appear "stretched," the broader economy is robust enough to absorb a potential equity market pullback without triggering a downturn.
San Francisco Fed President Mary Daly indicated that the central bank's recent policy shifts have successfully placed the labor market in a "better place." Following 75 basis points of interest rate cuts, Daly believes current monetary policy is well-positioned to maintain stability. However, she cautioned that price pressures remain persistent in sectors outside of goods, noting that the "last mile" of inflation control has been complicated by external shocks, specifically the impact of tariffs.
In the corporate sector, Meta Platforms (META) is moving to reduce staff stock awards for a second consecutive year, according to a report by the Financial Times. This move comes as the social media giant continues to funnel billions into AI infrastructure and headcount efficiency. Investors are closely watching how these compensation adjustments affect talent retention in an increasingly competitive Silicon Valley landscape.
Simultaneously, HSBC (HSBC) has initiated a 10% workforce reduction within its U.S. Debt Capital Markets team. The cuts are part of a broader restructuring effort led by CEO Georges Elhedery to streamline the bank's global operations and focus on core strengths. The move reflects a wider trend among global lenders to optimize their investment banking divisions amid shifting deal volumes and high interest rates.
President Trump took aim at the healthcare sector today, specifically criticizing health insurance providers such as UnitedHealth Group (UNH) and Humana (HUM) for their recent financial performance. The President expressed frustration over reports of significant stock gains within the industry, stating the news made him "upset." Despite these criticisms of the private sector, the President struck an optimistic tone regarding the broader cost of living, claiming that regarding affordability, "We’ve solved it."
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.