Economic Cracks Widen

Written By Brian Schreiner

Weekly Investment Update | By Brian Schreiner

Last week stocks were down, bonds, commodities and gold were flat; bitcoin was down.

November kicked off with a wobble in equity markets, triggered by volatility in AI stocks. The top ten companies (by market capitalization) in the S&P 500, now represent 42% of the entire index. Only 2 of the top ten, ranked 9 and 10 by size, are not technology stocks. 

There is significant risk tied to overconcentration, even in the S&P 500, so investors should take care to make sure their portfolios are well diversified.

The largest stock in the index, Nvidia , recently became the first company in history to surpass a $5 trillion market cap. For context that’s

  • Larger than five of the S&P 500’s 11 sectors,

  • Equal to 60% of the entire Russell 2000 small-cap universe,

  • Half the size of the STOXX 600, (Europe's stock index) and

  • Bigger than Germany’s entire gross domestic product.

 U.S. Senate Advances Deal to End Shutdown

The federal government shutdown reached the longest on record during the week, but as of this morning, it seems lawmakers may be voting on a compromise. Senators need to agree on how long to debate before voting on the final bill. This could move quickly, or be held up by senators who want to drag out the process. The House will have to return and adopt the deal struck in the Senate before it is sent to President Trump to be signed.

Corporate Bankruptcies Increasing

Corporate bankruptcies have been increasing every quarter since June 2022. Over 23,000 American businesses filed for bankruptcy over the 12-month period ending March 31, 2025, 13% higher than the previous year.

In May of 2025, Rite Aid filed for bankruptcy protection for the second time in under two years. It is now in the process of selling off portions of its business piecemeal while closing all of its remaining stores in waves. Other major brands that have filed this year include Hooters, 23andMe, and Forever 21.

In the 12-month period ending on June 30, 117 more large companies made Chapter 7 or Chapter 11 filings. While that was a modest increase from 113 such filings during the prior 12-month period, it was 81% above the annual average rate of 44 from 2005 through 2024, Cornerstone Research reported.

October Layoffs Highest in Over 20 Years

With the ongoing shutdown continuing to limit government data releases, investors focused on several reports from alternative private-sector sources during the week, including ADP’s October employment report. On Wednesday, the private payroll processing firm reported that private employers added 42,000 jobs during the month, rebounding after two consecutive months of declines. However, the report also noted that hiring was not broad-based as employers in the professional business services, information, and leisure and hospitality industries shed jobs for the third month in a row, while pay growth was unchanged.

Meanwhile, a report released Thursday from consulting firm Challenger, Gray & Christmas indicated that employers have cut nearly 1.1 million jobs this year through October, a 65% increase over the same period last year and a 44% jump from the number of job cuts in the entirety of 2024. October’s 153,074 job cuts were the most for the month since 2003.

Consumer Sentiment Falls

The University of Michigan reported a preliminary reading of its November Index of Consumer Sentiment on Friday morning. The index reading dropped 3.3 points month over month to 50.3, the lowest since the index’s record low in June 2022, “led by a 17% drop in current personal finances and a 11% decline in year-ahead expected business conditions,” according to the report. Federal government shutdown worries were cited as a primary reason for the decline. Expectations for inflation over the next year rose to 4.7% from 4.6% in October. α


Interesting things I came across this week…

Download our Quarterly Investment Outlook

Alpha Rock offers a compelling alternative to traditional buy-and-hold investing by offering active, risk-managed portfolio management services focused on liquid alternative investments and risk management.

To learn more about how we are investing for clients and for our current views on the global investment landscape, download our Quarterly Investment Outlook.


We’d love to hear from you!

Your thoughts are important to us, so don’t hesitate to share them. They give us great motivation and encouragement.

IMPORTANT DISCLOSURE INFORMATION

This commentary reflects the personal opinions, viewpoints and analyses of the Alpha Rock Investments, LLC employees providing such comments, and should not be regarded as a description of advisory services provided by Alpha Rock Investments, LLC or performance returns of any Alpha Rock Investments, LLC client. The views reflected in the commentary are subject to change at any time without notice. Nothing in this commentary constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Alpha Rock Investments, LLC manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.

The S&P 500 Index or the Standard & Poor's 500 Index is a market-capitalization-weighted index of the 500 largest U.S. publicly traded companies. The S&P 500 is a float-weighted index, meaning company market capitalizations are adjusted by the number of shares available for public trading. Note: Investors cannot invest directly in an index. These unmanaged indices do not reflect management fees and transaction costs that are associated with most investments.

Alpha Rock Investments, LLC provides links for your convenience to websites produced by other providers of industry related material. Accessing websites through links directs you away from our website. Alpha Rock Investments, LLC is not responsible for errors or omissions in the material on third party websites, and does not necessarily approve of or endorse the information provided. Users who gain access to third party websites may be subject to the copyright and other restrictions on use imposed by those providers and assume responsibility and risk from use of those websites.

Brian Schreiner
Next

The Tide of Liquidity is Going Out