Authored by Lance Roberts via RealInvestmentAdvice.com,

This past week, Greg Feirman wrote an interesting article about “The Perils Of Adjusted EBITDA.” Before we get into his discussion, let’s discuss what EBITDA is.

EBITDA is an acronym that stands for “Earnings Before Interest, Taxes, Depreciation, and Amortization.” Over the years, EBITDA has become a go-to metric for evaluating corporate performance as it offers a simple way to assess a company’s profitability by removing non-cash charges and financing effects. However, the problem with EBITDA is that simplicity often comes at the cost of accuracy. Why do I say that? Because EBITDA ignores critical costs, such as depreciation, which can distort a company’s true economic picture in capital-intensive industries. When companies extend the lives of their assets to reduce depreciation expenses, EBITDA increases, even though the underlying cash outflows remain unchanged.

Read that last part again, because this is where Greg’s commentary hits home. Historically, capital expenditures tend to surge following recessions and economic downturns. This makes sense as companies expend capital to ramp up production as economic growth returns. You will notice a high correlation between economic and capital expenditures (CapEx) growth rates. Notably, this is particularly relevant in the AI sector, where firms are investing billions into chips, servers, and data centers, which will likely coincide with an increase in economic activity.

This is also where Greg’s comments are most relevant.

“On Monday morning, Michael Burry tweeted out more details about his AI Bubble thesis. He claims that the AI hyperscalers are “understating depreciation” by extending the period over which they are depreciating the Nvidia chips and all the other capital equipment they are buying to build out AI. This morning Jim Chanos applied the same logic to CoreWeave (CRWV). The first thing to understand is that Net Income is an accounting number. It is not the amount of cash that the company actually earns because it reflects certain approximations – one of the most important of which is depreciation.“

As Greg notes, a good example is CoreWeave (CRWV), which reported earnings this past week.

“Adjusted EBITDA more than doubled to $838 million from $379 million a year ago. On the surface, then, they are a profitable company – at least on this metric. But they backed out $630 billion in Depreciation and Amortization from their GAAP Net Loss of $110 million to arrive at that number. It’s only when we turn to the Cash Flow statement that we understand the how CoreWeave is financing their operations. Cash Flow from Operations in the first 9 months of 2025 was $1.5 billion. CapEx was $6.25 billion. Those are cash figures, not accounting ones. In other words, Free Cash Flow for the first nine months of the year was -$4.75 billion. That’s right: CRWV has burned up nearly $5 billion so far this year. How are they financing this? By selling debt. Essentially the whole difference is made up by their net debt issuance of ~$4.5 billion.”

This reveals the disconnect: EBITDA suggests “operating profitability looks good,” but the cash flow dynamics tell a very different story. If you rely only on EBITDA, you may miss the fact that the business is burning cash, depending on borrowing, or stretching asset lives unrealistically.

As Greg concluded:

“Clearly, the hyperscalers are spending an enormous amount of money on Nvidia chips and the other capital equipment required to build out AI. Their thesis is that the ROI on these investments over the long term will be excellent. If AI is truly the game changer many say it is, the returns may well outweigh any current concerns about the accounting. If not, a lot of this CapEx may be malinvestment and have to be written down in the future.

The overall point is that we are operating in the dark here because we don’t know the future returns on investment and we don’t know the appropriate rate to depreciate these huge Capital Expenditures to get the right Net Income numbers in the present.”

This is why investors need to be more realistic about understanding earnings reports and be cautious of the metrics they use to invest in companies. There are several pitfalls associated with EBITDA that you should be aware of. For example:

• It ignores capital expenditures (CapEx) and replacement needs.

• It omits changes in working capital—such as inventory, receivables, and payables—which can erode cash even when EBITDA is positive.

• It may mask interest and debt burdens—two very real cash drains. Since interest is excluded, two companies with similar EBITDA may have vastly different risk profiles.

• It allows for subjective “adjustments” (adjusted EBITDA) that reduce comparability across companies and time periods.

• It may mislead in asset‑intensive sectors where hidden replacement or upgrade costs are large.

However, it isn’t just EBITDA, but earnings in general, that require closer inspection.

Earnings Aren’t What You Think

Just like the hit series “House of Cards,” Wall Street earnings season has become rife with manipulation, deceit, and obfuscation that could rival the dark corners of Washington, D.C. What is most fascinating is that so many individuals invest hard-earned capital based on these manipulated numbers. The failure to understand the “quality” of earnings, rather than the “quantity,” has always led to disappointing outcomes at some point in the future. 

As Drew Bernstein recently penned for CFO.com:

“Non-GAAP financials are not audited and are most often disclosed through earnings press releases and investor presentations, rather than in the company’s annual report filed with the Securities and Exchange Commission.

Once upon a time, non-GAAP financials were used to isolate the impact of significant one-time events like a major restructuring or sizable acquisition. In recent years, they have become increasingly prevalent and prominent, used by both the shiniest new-economy IPO companies and the old-economy stalwarts.”

In the 1980s and early 1990s, companies typically reported GAAP earnings in their quarterly releases. If an investor dug through the report, they would find “adjusted” and “pro forma” earnings buried in the back. Today, GAAP earnings are buried in the back, hoping investors will miss the ugly truth.

These “adjusted or pro forma earnings” exclude items that a company deems “special, one-time, or extraordinary.” The problem is that these “special, one-time” items appear “every” quarter, leaving investors with a muddier picture of what companies are really making. This growing divergence between the earnings calculated according to accepted accounting principles and the “earnings” touted in press releases and analyst research reports has put investors at a disadvantage in understanding precisely what they are paying for.

As BofAML stated:

“We are increasingly concerned with the number of companies (non-commodity) reporting earnings on an adjusted basis versus those that are stressing GAAP accounting, and find the divergence a consequence of less earnings power. 

Consider that when US GDP growth was averaging 3% (the 5 quarters September 2013 through September 2014) on average 80% of US HY companies reported earnings on an adjusted basis. Since September 2014, however, with US GDP averaging just 1.9%, over 87% of companies have reported on an adjusted basis. Perhaps even more telling, between the end of 2010 and 2013, the percentage of companies reporting adjusted EBITDA was relatively constant, and since 2013, the number has been on a steady rise.

So, why do companies regularly report these Non-GAAP earnings? Drew has the answer:

“When management is asked why they resort to non-GAAP reporting, the most common response is that these measures are requested by the analysts and are commonly used in earnings models employed to value the company. Indeed, sell-side analysts and funds with a long position in the stock may have incentives to encourage a more favorable alternative presentation of earnings results.”

How much of a difference are we talking about? About $3.59/share in earnings, where revenue comprises only about 25% of the result.

But here is the real question:

“If non-GAAP reporting is used as a supplemental means to help investors identify underlying trends in the business, one might reasonably expect that both favorable and unfavorable events would be “adjusted” in equal measure.”

However, research presented by the American Accounting Association suggests that companies engage in “asymmetric” non-GAAP exclusions of mostly unfavorable items as a tool to “beat” analyst earnings estimates.

So, why has there been such a rise in all these accounting gimmicks? Money, of course.

Better Earnings = Higher Stock Prices = Higher Compensation via Stock Buybacks

Why Munger Said “EBITDA is BullS***”

Wall Street is an insider system where the practice of legally manipulating earnings to create the best possible outcome and increase executive compensation has run amok. The adults in the room, a.k.a. the Securities & Exchange Commission, have “left the children in charge,” but will most assuredly leap into action to pass new regulations to rectify reckless misbehavior AFTER the next crash.

For investors, the manipulation of EBITDA and earnings not only skews valuation analysis but also specifically impacts any analysis involving earnings, such as P/E ratios, EV/EBITDA, and PEG.

Ramy Elitzur, via The Account Art Of War, expounded on the problems of using EBITDA.

“One of the things that I thought that I knew well was the importance of income-based metrics such as EBITDA, and that cash flow information is not as important. It turned out that common garden variety metrics, such as EBITDA, could be hazardous to your health.”

The article is worth reading and chock-full of good information; however, here are the four crucial points:

1. EBITDA is not a good surrogate for cash flow analysis because it assumes that all revenues are collected immediately and all expenses are paid immediately, leading to a false sense of liquidity.

2. Superficial common garden-variety accounting ratios will fail to detect signs of liquidity problems.

3. Direct cash flow statements provide a more detailed insight into the operating cash flows than indirect cash flow statements. Note that the vast majority (well over 90%) of public companies use the indirect format.

4. EBITDA, just like net income, is very sensitive to accounting manipulations.

The last point is the most critical. As Charlie Munger once stated:

“I think there are lots of troubles coming. There’s too much wretched excess. I don’t like when investment bankers talk about EBITDA, which I call bulls*** earnings. It’s ridiculous. EBITDA does not accurately reflect how much money a company makes, unlike traditional earnings. Think of the basic intellectual dishonesty that comes when you start talking about adjusted EBITDA. You’re almost announcing you’re a flake.”

In a world of adjusted earnings, where every company consistently outperforms its peers, investors often lose sight of what truly matters in investing.

“This unfortunate cycle will only be broken when the end-users of financial reporting — institutional investors, analysts, lenders, and the media — agree that we are on the verge of systemic failure in financial reporting. In the history of financial markets, such moments of mental clarity most often occur following the loss of vast sums of capital.” – American Accounting Association

Imaginary worlds are nice, but it’s just impossible to live there.

Where To Look Instead

So, if “operating earnings” and EBITDA are enough, where should you look? The answer is to focus on metrics that reflect real cash generation and sustainable operations. Free cash flow, which is operating cash flow minus capital expenditures, is one of the most important. It shows what’s left over after a business funds its maintenance and growth needs. A positive free cash flow tells you the company is generating more cash than it needs to sustain itself. A negative one warns that it’s living on borrowed money.

You should also examine trends in working capital, specifically, changes in receivables, payables, and inventory, to determine if the company is overextending itself to maintain operations. Asset lives and depreciation schedules should be realistic, not inflated to improve margins. Debt levels and interest costs matter too. EBITDA ignores both, but if a company’s cash flow can’t cover its debt service, that’s a red flag.

Here are the key metrics to prioritize over EBITDA:

• Free Cash Flow (operating cash flow minus CapEx)
• CapEx trends and whether they are delivering returns
• Depreciation policy and asset life assumptions
• Working capital changes in inventory, receivables, and payables
• Debt and interest obligations
• Reconciliation of EBITDA to net income and cash flow

When companies show a large gap between EBITDA and these real-world numbers, investors should be skeptical. In a capital-intensive sector like AI, where the future remains uncertain, the risks of relying on EBITDA are amplified. It may look clean on paper, but it can leave you blind to the business’s real financial health.

The US and China are still hashing out the details of how Beijing will loosen rare-earth export restrictions, weeks after a trade truce that Washington said would boost shipments, according to Bloomberg. 

In other words, there’s still no rare earth mineral trade deal, despite the “truce” between the two countries. 

Negotiators have until the end of November to finalize terms for “general licenses” China promised to issue for US-bound rare earths and other critical minerals, though the reason for the delay is unclear.

The White House framed the pledge as the “de facto removal” of China’s curbs imposed since 2023, calling it a major win for supply chains. Washington has already eased tariffs and paused some national-security measures, but China hasn’t publicly addressed the licensing promise, even as it confirmed other parts of the deal, including a one-year halt to new rare-earth controls.

Bloomberg writes that the outcome remains uncertain. Alicia Garcia Herrero said, “The deal is far from done,” noting Beijing can use licenses as leverage. Exporters say they’ve received no new guidance, with Christopher Beddor commenting, “Everyone is still in wait-and-see mode… I would not characterize the general licenses as a de facto removal of controls.”

The general-license system would allow repeated shipments over as long as three years, unlike the current requirement for case-by-case approvals. But buyers would still need to pass government vetting. The White House says these licenses will apply to restricted rare earths and metals such as gallium, germanium, antimony, tungsten, and graphite; China has also agreed to lift its ban on direct shipments to the US for the first three.

Recall days ago we wrote that disagreements were emerging over the deal and we have been skeptical that a deal would take place since the “truce” was first announced. We wrote that the so-called US–China “truce” looked far too fragile to last, and recent developments have only reinforced that view.

Even as both sides publicly celebrated their agreement, Beijing immediately began laying down new “red lines” — and Washington just as quickly took steps guaranteed to test them. Analysts, exporters, and investors all saw the same thing: a deal heavy on spin and light on substance, with China able to wield licensing power as leverage and the US racing to secure alternative supply chains.

In short, we argued that this ceasefire was never more than a temporary pause before the next escalation, and nothing since has suggested otherwise.

We haven’t heard much in corporate media about short-term, flexible, on-demand work, otherwise known as the gig economy, but a new Goldman note offers color into what’s happening with these part-time jobs as the labor market cools.

Let’s take a look at the news cycle for mentions of “gig economy.” Notice how the topic surged in the early days of the Covid pandemic, when it became all the rage as people lost their jobs due to government-mandated shutdown of the economy. Many quickly turned to gigs for supplemental income, like driving for Uber or delivering for DoorDash. Now, mentions in corporate media have fallen back to roughly 2016 levels.

However, as the labor market cools, analyst Jessica Rindels said gig-platform hours have increased, suggesting displaced or underemployed workers are turning to Uber, DoorDash, and other gig opportunities.

Estimates suggest that 5% to 15% of Americans work gig jobs, with 2% to 4% involved in platform-based gigs. Overall, gig work has grown only modestly in recent years, but platform gig work has expanded at a 5% to 8% annual pace. 

Here are the key takeaways about current gig economy trends via Rindels (full report can be viewed by ZeroHedge Pro subs in usual place): 

• This Analyst takes a deeper look at the gig economy, including both traditional gig work as well as platform-based opportunities such as Uber. With the labor market cooling, we ask whether the gig economy provides a meaningful source of income support to those who experience job loss or reduced hours and what it can tell us about the current state of the labor market.

• Estimates of employment in the gig economy are wide-ranging, but the most credible suggest that 5-15% of the US population participates in gig work, broadly defined as any income-generating work outside of standard, long-term, direct-hire employment. Estimates of participation in platform-based gig work such as Uber are lower at 2-4% of the population. Most surveys that have been run for multiple years suggest, perhaps surprisingly, that growth in total gig employment has been modest at best, though growth in the number of platform gig workers has been much faster at roughly 5-8% annualized over the past few years.

• How do gig workers compare to workers in traditional jobs? Recent Fed research using the NY Fed’s Survey of Informal Work Participation (SIWP) finds that gig workers are more likely to be younger, female, work part-time, and to hold multiple jobs compared to workers in traditional jobs. Unique data from Gridwise, an app that allows platform gig workers to compare potential earnings across services, show that platform gig workers spent 14 hours per week on average doing gig work this year and earned roughly $18 per hour of work.

• How is gig work reflected in the official employment statistics? While only a subset of gig workers should be captured by the establishment survey, they should all in principle be captured by the household survey. That said, the SIWP suggests that some gig work is not reported in the household survey and that roughly 15% of people reported as unemployed or not in the labor force actually do some gig work, which implies that the employment to population ratio would be roughly 65% rather than 60% if it fully included gig workers.

• Recent academic research shows that many lower-wage workers face high income volatility due to unpredictable changes in the weekly hours their employers give them. Does the gig economy—especially platform-based work—offer a meaningful new source of income support with a low barrier to entry to those who face job loss or reduced hours? Data from the SIWP indicate that nearly 50% of gig workers do gig work to earn extra money versus just 15% who do it as a primary source of income, and that 20% of people who took a pay cut, lost their job, or had their hours reduced took up gig work in response. However, gig workers only earn 50-65% as much per hour of work as they did in previous traditional jobs, and the support available to some workers in normal times would likely be inadequate for all job losers in a recession.

• What can the gig economy tell us about the current state of the labor market? As the broader labor market has cooled this year, platform-based gig work opportunities have held up so far. We find that hours worked on gig platforms increased more this year in cities where payroll growth has slowed, suggesting that some workers might have taken up gig work to cushion negative labor market outcomes.

Earlier on Monday, White House economic adviser Kevin Hassett told CNBC hosts about “mixed signals in the job market …” 

“I think that there could be a little bit of almost quiet time in the labor market because firms are finding the AI is making their workers so productive that they don’t necessarily have to hire the new kids out of college,” Hassett said.

This all suggests that a cooling labor market could push more workers into the gig economy, which in turn could increase the conversation around gig jobs.

After the resolution of the US government shutdown, markets face a packed calendar of delayed and scheduled releases this week, although maybe the most important event will be Nvidia’s earnings after the closing bell on Wednesday.

According to DB’s Jim Reid, one of the most interesting developments last week in the world of tech was the widening out of AI related CDS spreads, something we had been warning about for the past month. For example, Oracle 5yr CDS widened +18bps to 105bps and CoreWeave around +100bps to 630bps last week even as a volatile week for the Mag-7 ended in only a small -1.19% loss. The tights for the year for both were 33bps and 360bp respectively with the CoreWeave contract only starting trading in September. Some of this is concern about AI corporate bond supply over the next few quarters after a surprise surge in recent weeks. However, it seems that they are also being used as a general hedge for all sorts of positive AI positions. There aren’t many credit names to use to hedge AI lending (private and public), or general exposure, so these are bearing the brunt.    

The US calendar dominates this week as agencies work through the backlog caused by the 43-day shutdown. The headline event is Thursday’s September employment report. DB’s economists expect payrolls to rebound sharply, with headline and private payrolls both forecast at +75k versus consensus of +50k, prior readings of +22k and +38k respectively, leaving unemployment steady at 4.3%. Indicatively, Goldman is also above consensus, at +80k. Average hourly earnings should rise 0.3%, while hours worked edge up to 34.3. If realised, these figures would lift annual nominal compensation growth to 4.9%, though quarterly growth may slow to 3.7%, its weakest pace since the pandemic.

Beyond jobs, several delayed releases will inform Q3 US GDP estimates: August construction spending (today), factory orders (Tuesday), and the trade balance (Wednesday). Earlier data suggested 2.8% annualised growth for Q3 GDP, but this week’s numbers could tilt forecasts higher. More timely indicators include the Empire State manufacturing index (today), NAHB housing market index (tomorrow), Philadelphia Fed survey and October existing home sales (both Thursday). Consumer sentiment from the University of Michigan rounds out Friday, with inflation expectations within that survey remain a key watchpoint for policymakers.

Fed communication will be another major theme. A broad slate of officials speaks throughout the week, including Vice Chair Jefferson, Governor Waller (both today), and regional presidents Williams, Kashkari (today), Barkin and Collins. Markets will scrutinise these remarks for clues on the pace of rate cuts. Jefferson may be the most interesting to see whether he continues to suggest a slowing of rate cuts as the Fed approaches neutral.  

The October FOMC minutes, due Wednesday, should shed light on internal debates and the conditions for a potential December move. Recent commentary suggests a more cautious tone, with some officials signalling that a December cut is far from assured, and on Friday December futures priced in a less than a 50% chance of a cut for the first time. ECB President Lagarde also speaks on Friday, adding a European angle to the policy debate.

Globally, attention will centre on flash November PMIs due Friday. Canadian (today) and UK (Wednesday) CPI figures are released, with UK retail sales and consumer confidence rounding out Friday. In Asia, Japan reports October CPI on Thursday, while China announces lending rates the same day. Corporate earnings will also feature prominently, with Nvidia in the spotlight on Wednesday, joined by Palo Alto Networks and major US retailers such as Walmart, Home Depot and Target. Chinese tech names Baidu and Xiaomi will also report.

Below is a day-by-day look at the week ahead, courtesy of DB.

Monday November 17

• Data: US November Empire manufacturing index, construction spending, Japan September capacity utilisation, Canada October CPI, existing home sales, housing starts, September international securities transactions
• Central banks: Fed’s Williams and Kashkari speak, ECB’s Guindos, Sleijpen, Lane and Cipollone speak, BoE’s Mann speaks

Tuesday November 18

• Data: US November New York Fed services business activity, NAHB housing market index, September total net TIC flows, Japan October trade balance, September core machine orders
• Central banks: Fed’s Barkin speaks, ECB’s Dolenc speaks, BoE’s Pill and Dhingra speak
• Earnings: Home Depot, Baidu, Xiaomi, PDD

Wednesday November 19

• Data: US trade balance, UK October CPI, RPI, PPI, September house price index, Italy September current account balance, ECB September current account
• Central banks: FOMC minutes, Fed’s Williams, Barkin and Logan speak
• Earnings: Nvidia, Palo Alto Networks, Target, Lowe’s, TJX
• Auctions: US 20-yr Bonds ($16bn)

Thursday November 20

• Data: US September nonfarm payrolls, unemployment rate, hourly earnings, October leading index, existing home sales, November Philadelphia Fed business outlook, Kansas City Fed manufacturing activity, Japan October national CPI, Germany October PPI, Eurozone November consumer confidence, September construction output, Canada October industrial product and raw materials price index, Denmark Q3 GDP
• Central banks: China 1-yr and 5-yr loan prime rate, Fed’s Hammack, Goolsbee and Paulson speak, BoJ’s Koeda speaks, BoE’s Dhingra speaks
• Earnings: Walmart, Gap, Intuit, Copart
• Auctions: US 10-yr TIPS (reopening, $19bn)

Friday November 21

• Data: US, UK, Japan, Germany, France and the Eurozone flash November PMIs, US November Kansas City Fed services activity, US consumer sentiment, UK November GfK consumer confidence, October retail sales, public finances, France November manufacturing confidence, October retail sales, Canada September retail sales
• Central banks: Fed’s Williams and Logan speak, ECB’s Lagarde, Guindos, Kocher, Muller and Nagel speak, BoE’s Pill speaks

Finally, looking at just the US, Goldman writes that with the government now open, it expects the statistical agencies to continue updating their data release schedules over the coming days. There are several speaking engagements from Fed officials this week, including a speech on the economic outlook by Vice Chair Jefferson on Monday. The minutes to the FOMC’s October meeting will be released on Wednesday.

Monday, November 17 

• 08:30 AM Empire State manufacturing survey, November (consensus +5.8, last +10.7)
• 09:00 AM New York Fed President Williams (FOMC voter) speaks: New York Fed President John Williams will deliver welcoming remarks at the New York Fed’s 2025 Governance and Culture Reform Conference. In an interview with the Financial Times published on November 9th, Williams described the FOMC’s interest rate decision at its December meeting as “a balancing act,” reflecting the fact that “inflation is high” while the labor market was “gradually cooling.” He noted that “Something could happen that cuts into confidence, or consumer spending growth that we’re seeing at the aggregate level may not be as robust, if you will, as it would be otherwise, given that a lot of folks are really, again, living month to month.”
• 09:30 AM Vice Chair Jefferson speaks: Fed Vice Chair Philip Jefferson will deliver a speech on the economic outlook and monetary policy at an event hosted by the Kansas City Fed. Text and moderated Q&A are expected. On November 7th, Jefferson said that it “makes sense to proceed slowly as we approach the neutral rate.” Jefferson said he takes a “meeting-by-meeting approach” to policy decisions, which he said was “especially prudent because it is unclear how much official data we will have before our December meeting.”
• 10:00 AM Construction spending, August (GS flat, consensus -0.1%, last -0.1%)
• 01:00 PM Minneapolis Fed President Kashkari (FOMC non-voter) speaks: Minneapolis Fed President Neel Kashkari will moderate a fireside chat with Christophe Beck, CEO of Ecolab. On November 13th, Kashkari said that “the anecdotal evidence and the data we got just implied to me underlying resilience in economic activity, more than I expected.” He said he could “make a case—depending on how the data goes—to cut [at the FOMC’s December meeting], I can make a case to hold, and we’ll have to see.”
• 03:35 PM Fed Governor Waller speaks: Fed Governor Chris Waller will deliver a speech on the economic outlook at The Society of Professional Economists’ annual dinner. Moderated and audience Q&A and text are expected. On October 31st, Waller said that “the biggest concern we have right now is the labor market.” He added that “we know inflation is going to come back down, so this is why I’m still advocating that we cut policy rates in December, because that’s what all the data is telling me to do.”

Tuesday, November 18 

• 08:15 AM ADP employment weekly preliminary estimate, average for the four weeks ended November 2 (last 11.25k)
• 10:00 AM Factory orders, August (GS +1.3%, consensus +1.4%, last -1.3%); Durable goods orders, August final (GS +2.9%, consensus +2.9%, last +2.9%); Durable goods orders ex-transportation, August final (consensus +0.4%, last +0.4%); Core capital goods orders, August final (consensus +0.6%, last +0.6%); Core capital goods shipments, August final (last -0.3%)
• 10:00 AM NAHB housing market index, November (consensus 36, last 37)
• 10:30 AM Fed Governor Barr speaks: Fed Governor Michael Barr will deliver a speech on bank supervision at the Kogod School of Business at American University. Moderated and audience Q&A and text are expected. On October 9th, Barr said that “although several data points indicate that the labor market may be roughly in balance, we also know there has been a sharp drop in job creation since May, which suggests risks to the labor market going forward.” However, he noted that the “Federal Reserve’s price stability goal faces significant risks,” adding that he is “skeptical of assurances that we should fully look through higher inflation from import tariffs.”
• 11:00 AM Richmond Fed President Barkin (FOMC non-voter) speaks: Richmond Fed President Tom Barkin will deliver a speech on the economic outlook at the Top of Virginia Regional Chamber at Shenandoah University. Text and audience Q&A are expected. On October 16th, Barkin said he remained “sanguine” on the economic outlook, noting that “the ground may look shaky today” but there were “countervailing forces that will limit the downside.”
• 07:55 PM Dallas Fed President Logan (FOMC non-voter) speaks: Dallas Fed President Lorie Logan will deliver closing remarks at the Dallas Fed’s Global Perspectives conference. On November 16th, Logan said she would find it “hard to support another rate cut unless we were to get convincing evidence that inflation is really coming down faster than my expectations or that we were seeing more than the gradual cooling that we’ve been seeing in the labor market.”

Wednesday, November 19 

• 08:30 AM Trade balance, August (GS -$68.0bn, consensus -$60.3bn, last -$78.3bn)
• 10:00 AM Fed Governor Miran speaks: Fed Governor Stephen Miran will deliver a speech on the US financial regulatory framework at the Bank Policy Institute. Text and moderated Q&A are expected. On November 14th, Miran said that since the September meeting (where the median projection in the Summary of Economic Projections (SEP) showed three interest rate cuts in 2025) “all the data that we’ve gotten have been dovishly inclined.” On November 10th, Miran said the FOMC should cut 25bp in December “at a minimum.”
• 12:45 PM Richmond Fed President Barkin (FOMC non-voter) speaks: Richmond Fed President Tom Barkin will deliver the same speech on the economic outlook that he will give on November 18th at the University of Richmond’s Jopson Alumni Center. Text and audience Q&A are expected.
• 02:00 PM FOMC meeting minutes, October 28-29 meeting: At its October meeting, the FOMC lowered the target range for the funds rate by 25bp to 3.75-4% and announced that balance sheet runoff would end at the start of December. At the post-meeting press conference, Powell emphasized that policy is not on a preset course (“far from it”), acknowledged that there are “strongly different views” on the FOMC about a December cut, and noted that some participants might see the lack of official data as a reason not to cut in December. We suspect there is substantial opposition on the FOMC to the risk management cuts, and we expect the minutes to the FOMC’s October meeting to reflect those concerns. Powell himself noted that “there’s a growing chorus now of feeling like maybe this is where we should at least wait a cycle, something like that, … and … you can expect that in the minutes.”
• 02:00 PM New York Fed President Williams (FOMC voter) speaks: New York Fed President John Williams will deliver welcoming remarks at an event titled “Making Missing Markets: Connecting Communities and Capital” at the New York Fed.

Thursday, November 20 

• 08:30 AM Initial jobless claims, week ended November 15 (GS 230k, consensus 225k, GS estimate of last 228k): Continuing jobless claims, week ended November 8 (GS estimate of last 1,936k)
• 08:30 AM Nonfarm payroll employment, September (GS +80k, consensus +50k, last +22k): Private payroll employment, September (GS +85k, consensus +60k, last +83k); Average hourly earnings (MoM), September (GS +0.2%, consensus +0.3%, last +0.3%); Unemployment rate, September (GS 4.3%, consensus 4.3%, last 4.3%): We estimate nonfarm payrolls rose 80k in September. On the positive side, big data indicators indicated a sequentially firmer pace of private sector job growth. On the negative side, we expect a 5k decline in government payrolls, reflecting a 10k decline in federal government payrolls and a 5k increase in state and local government payrolls. We suspect August payroll growth will be revised higher, as has been typical over the last decade, though revisions so far this year have been disproportionately downward. We estimate that the unemployment rate was unchanged at 4.3% on a rounded basis, reflecting the stabilization in continuing claims over the September reference period, though the bar for rounding up to 4.4% is not high from an unrounded 4.32% in August. We estimate average hourly earnings rose 0.2% (month-over-month, seasonally adjusted), reflecting negative calendar effects.
• 08:30 AM Philadelphia Fed manufacturing index, November (GS -1.0, consensus 2.0, last -12.8)
• 08:45 AM Cleveland Fed President Hammack (FOMC non-voter) speaks: Cleveland Fed President Beth Hammack will deliver opening remarks at the 2025 Financial Stability Conference hosted by the Cleveland Fed. Q&A is expected. On November 13th, Hammack said that she thought the FOMC needed to “remain somewhat restrictive to continue putting pressure to bring inflation down toward our target,” which would involve keeping rates “around these [current] levels.”
• 10:00 AM Existing home sales, October (GS flat, consensus +0.5%, last +1.5%)
• 11:00 AM Fed Governor Cook speaks: Fed Governor Lisa Cook will take part in an event on financial stability hosted by Georgetown University. Moderated and audience Q&A and text are expected. On November 3rd, Cook said that inflation was “on track to continue on its trend toward our target of 2 percent once the tariff effects are behind us” and that “the slightly rising unemployment rate indicates the labor market is softening, but only modestly so.” Cook also noted that the labor market “can deteriorate very quickly. There can be non-linear effects. So I’m watching this very, very carefully.”
• 12:40 PM Chicago Fed President Goolsbee (FOMC voter) speaks: Chicago Fed President Austan Goolsbee will take part in a moderated discussion at a lunch hosted by the CFA Society of Indianapolis. Moderated Q&A is expected. On November 6th, Goolsbee said that the lack of data during the government shutdown meant that if there were “problems developing on the inflation side, it’s going to be a fair amount of time before we see that,” which he said made him “even more uneasy.” Goolsbee said he “lean[s] more toward the, ‘When it’s foggy, let’s just be a little careful and slow down.’”
• 06:15 PM Fed Governor Miran speaks: Fed Governor Stephen Miran will take part in an event hosted by the American Investment Council. Moderated Q&A is expected.
• 06:45 PM Philadelphia Fed President Paulson (FOMC non-voter) speaks: Philadelphia Fed President Anna Paulson will deliver a speech on the economic outlook at the Philadelphia Fed’s 80th Annual Field Meeting Capstone. Text is expected. On October 13th, Paulson said she did not see “the type of conditions, especially in the labor market, which seem likely to turn tariff-induced price increases into sustained inflation.” At the same time, Paulson noted that “momentum in the labor market is to the downside.” Paulson said she viewed “easing along the lines of the median Summary of Economic Projections (SEP) policy path as appropriate” over the rest of the year.

Friday, November 21 

• 07:30 AM New York Fed President Williams speaks: New York Fed President John Williams will deliver a keynote speech at the Annual Conference of the Central Bank of Chile. Text and Q&A are expected.
• 08:30 AM Fed Governor Barr speaks: Fed Governor Michael Barr will deliver welcoming remarks at the Fed Challenge finals. Text is expected.
• 08:45 AM Fed Vice Chair Jefferson speaks: Fed Vice Chair Philip Jefferson will deliver a speech on financial stability at the Cleveland Fed’s 2025 Financial Stability Conference. Text and audience Q&A are expected.
• 09:00 AM Dallas Fed President Logan (FOMC non-voter) speaks: Dallas Fed President Lorie Logan will take part in a moderated panel at The SNB and Its Watchers 2025 conference in Zurich. Text and Q&A are expected. 
• 09:45 AM S&P global US manufacturing PMI, November preliminary (consensus 52.0, last 52.5); S&P Global US services PMI, November preliminary (consensus 55.0, last 54.8)
• 10:00 AM University of Michigan consumer sentiment, November final (GS 50.0, consensus 50.8, last 50.3); University of Michigan 5-10-year inflation expectations, November final (GS 3.6%, last 3.6%)

Source: DB, Goldman

Just before the US cash session, Novo Nordisk A/S announced it will slash prices on Wegovy and Ozempic in a direct challenge to Eli Lilly’s obesity drug, aiming to regain market share. The announcement comes just weeks after President Trump finalized a deal with Novo and Lilly to reduce costs as part of the administration’s affordability push ahead of next year’s midterms.

Beginning immediately, introductory doses of Wegovy and Ozempic will cost just $199 per month for the first two months for cash-pay patients. After that, the price rises to $349 per month. This makes Novo’s obesity drugs approximately 30% cheaper than Lilly’s low-dose Zepbound and dramatically lower than the more than $1,000 per month many patients paid last year.

In the eyes of the consumer, $1,000 monthly payments for obesity drugs made little financial sense. However, now $349 per month could be viewed as “cheap” considering the average new car payment is $749 and the average used car payment is $529, according to the latest Experian data. 

Novo pointed out that the price cut aligns with a recent agreement with the Trump administration to expand access to medicines for patients living with obesity and other chronic conditions like diabetes, while lowering prices in the direct-to-patient, self-pay channel for 2026, adding “Novo Nordisk is bringing these prices to consumers months in advance of that commitment.” 

Earlier this month, Novo and Eli Lilly struck deals with the Trump administration to lower the prices of their blockbuster obesity drugs.

“I call it the fat drug … we’re offering it at drastic discounts,” Trump told reporters at the time. 

Happening Now in the Oval Office with a behind the scenes view—President Trump: “Pharmaceutical companies @EliLillyandCo and @NovoNordisk have agreed to offer their most popular GLP-1 weight loss drug, I call it the fat drug…at drastic discounts…” LIVE @WhiteHouse @X! pic.twitter.com/3uJVTP96Ah

— Dan Scavino (@Scavino47) November 6, 2025

Novo shares in Copenhagen fell on the news, down about 2%. The stock is down roughly 51% for the year.

Goldman analysts recently mapped out the next wave of obesity-drug catalysts in a report to clients (read the report). 

By Benjamin Picton, Senior Market Strategist at Rabobank

US stocks closed mixed on Friday to cap off a week where concerns over valuations caused substantial wobbles. The NASDAQ was in the red for the week while the Dow Jones and S&P500 managed to eke out minor gains. Markets have seemingly begun to pay attention to the heroic P/E multiples that many AI-adjacent names are trading on, with more questions being raised about the ability of AI hype to be converted into tangible profits for shareholders.

Scion Capital’s Michael Burry (of Big Short fame) made headlines last week by shutting down his hedge fund, telling investors that “my estimation of value in securities is not now, and has not been for some time, in sync with the markets”. Burry had been critical of tech darlings Palantir and NVIDIA, disclosing on X that he had spent $9.2m buying up puts against Palantir stock as he questioned the economics of the AI boom and suggested that some accounting practices concerning depreciation schedules looked rubbery. News emerged this morning that Palantir co-founder Peter Thiel has sold his entire stake in NVIDIA and substantially trimmed his position in Tesla while adding to longs in Microsoft and Apple.

There was also a geopolitical element to risk-off sentiment last week. Crude oil prices lifted after Iran’s Revolutionary Guard Corps seized a tanker in the Strait of Hormuz – the first such seizure since the end of the war between Iran and Israel in June – and Donald Trump said that he had “made up [his] mind” on Venezuela, hinting that the 15,000 US troops and more than a dozen warships (including the US’s largest warship, the USS Gerald R. Ford carrier) recently moved to the area as part ‘Operation Southern Spear’ could see action to oust the Maduro regime. Maduro, clearly sensing the danger, broke into a rendition of John Lennon’s ‘Imagine’ (yes, really) at a rally on Saturday as he urged peace.

Events in the Russia-Ukraine war also added to pressure on energy markets. Ukrainian strikes on the Russian Black Sea port of Novorossiysk has reportedly interrupted up to 2% of Russian oil supply while drone strikes on a refinery near Ryazan south of Moscow put further pressure on Russia’s ability to produce refined hydrocarbons used as transport fuels. Consequently, European gasoil futures closed the week 2.86% higher.

According to the Guardian, Russia has responded to Ukrainian strikes by targeting Ukrainian rail infrastructure and train drivers. The Guardian cites a Ukrainian government Minister who says that there has been a threefold increase in strikes on the Ukrainian rail system since July. Degrading Ukrainian rail infrastructure makes it more difficult for Ukraine to move troops and supplies to the front lines, but it will also make it harder to move grain cargoes out of the country. RaboResearch’s Agri Commodity Market Research team have just published their 2026 annual outlook available here.

Geopolitical risks have also been rising elsewhere. Relations between China and Japan have deteriorated over recent comments by Japanese PM Takaichi suggesting that a Chinese strike on Taiwan could be considered “existential” for Japan, and therefore justify Japanese military intervention under the country’s pacificist constitution. Meanwhile, tensions between India and Pakistan have been rising following a series of bombings and the government of Thailand has said that it is suspending its ceasefire with Cambodia, accusing the latter of laying landmines at the border. The US has responded by suspending trade deal talks with Thailand in a bid to pressure the latter to recommit to the ceasefire.

Spot gold benefited from rising geopolitical risks to close more than 2% higher on the week at $4,082/oz. Bitcoin has been heavily sold off and is dealing just over $94,000/coin at time of writing. The DXY missed a safe-haven bid last week and US 10-year yields rose by almost 3 basis points on Friday to 4.15%. That’s a rise of just over 5 basis points on the week, but US 10s outperformed their counterparts in Australia and the UK after a strong jobs report all but dashed hopes of another rate cut in the former and the rolling political and budgetary shambles in the latter scared investors away. Yields on 10-year French OATs fell slightly on the week while Bunds performed similarly to Treasuries.

Having felt the sting of recent election losses, the Trump administration has moved quickly to shore up support via cost of living measures for America’s middle and working classes. Notable recent items include a $2,000 tariff “dividend” for low and middle-income Americans, a $1,000 tax-advantaged ‘Trump Account’ invested in US stocks for babies born from 2025 through 2028, hinted 50-year mortgages and mooted changes to health insurance arrangements to see government funding redirected from insurance companies direct to individuals’ accounts.

The administration also announced on Friday that it would be exempting certain food items from tariffs. Exempt items include beef, coffee, cocoa, bananas, tomatoes, avocadoes, coconuts, pineapples, oranges, tea, nutmeg and cinnamon. Many of these items share the characteristic of having little or no domestic supply source in the USA or, in the case of beef, supply that is heavily constrained by the lowest US herd numbers since the 1950s. Consequently, tariff protection is unlikely to induce a near-term domestic supply response and (contingent on demand elasticities) is likely to be passed through to consumers as higher prices.

The reduction in tariffs on imported foodstuffs is therefore likely to reduce inflation pressures. This will be an interesting point of consideration at the December FOMC meeting as Fed rate-setters sift through the backlog of data that had been delayed by the US government shutdown and try to guess at the path ahead for inflation, employment and growth while also weighing up threats from frothy asset markets and geopolitical risks. OIS futures are currently pricing a 41% probability of a 25bp cut at the December meeting…

… but perhaps lowering the cost of steaks raises the stakes for the FOMC?

Submitted by Eric Kulisch of FreightWaves,

The U.S. Postal Service lost $9 billion in fiscal year 2025, a $500 million improvement from the prior year that officials attributed to greater revenue intake and reduction in transportation and workers compensation costs. But controllable loss, essentially adjusted operating income that excludes expenses such as workers compensation that are out of management’s control, worsened from $1.8 billion to $2.7 billion.

Financial results for the year ended Sept. 30 were released Friday as the Postal Service ups its tempo for the busy holiday period, when package and greeting card volumes surge. 

The U.S. Postal Service needs to “execute flawlessly” during the peak shipping season before Christmas, and beyond, to demonstrate it can sustain improved service performance and win more parcel volumes necessary for the organization’s financial recovery, Postmaster General David Steiner said in a video address to employees this week.  Service levels are steadily improving this year and the Postal Service is regularly able to achieve on-time service in the high-eighty and mid-ninety percentiles for some of our products, he told the board of governors Friday. And nearly half of the packages and mail are actually delivered earlier than the service standard.

The national post said operating revenue increased $916 million, transportation expenses fell $422 million and worker’s compensation expense declined $1.1 billion, partially offset by increased compensation and benefits expense of $1.7 billion, including a voluntary retirement program, and higher other operating expenses of $221 million.  About 10,500 employees accepted early retirement offers leading to a $167 million expense provision.

Total operating revenue was $80.5 billion, an increase of $916 million, or 1.2 percent, compared to the prior year. The increase was due largely to continued growth of USPS Ground Advantage shipping service, which replaced first-class package services in 2023 and offers two-to-five day service standards for packages up to 70 pounds, as well as price increases in both mail and shipping categories.

First-Class Mail revenue increased 1.5% ($370 million) on a 5% volume decline year over year. Marketing Mail revenue increased 2.3% ($350 million), despite a 1.3% decline in volume. Shipping and packages revenue increased 1.0% to $32.6 billion despite a 5.7% volume decline, or 415 million pieces. 

The Postal Service is seeking further administrative and legislative reforms to get rid of outdated financial and regulatory burdens that other government agencies don’t face. These reforms include: changes in retiree pension benefit funding rules for the Civil Service Retirement System benefits, diversification of pension assets, raising the statutory debt ceiling, and workers’ compensation administration reform. The Postal Service Reform Act of 2022 repealed the requirement that the USPS annually prepay future retirement health benefits, but more structural changes are needed, postal officials say. 

Steiner, who has been on the job for a little more than 100 days, said he planned to build on the Delivering for America transformation plan of his predecessor, Louis DeJoy, saying the Postal Service is “generally on the right track in terms of network modernization strategies.”

He stressed the importance of generating more revenue by attracting parcel business, which postal watchers say is one of the few tools available since most costs are fixed and difficult to lower. In a news release last month, Steiner added that he expects the Postal Service to continue gaining market share in the parcel sector.

The USPS, which delivered an average of 23.9 million packages per day in 2024, controls more than 30% of the parcel market by volume. Despite being the market share leader, it only gets about 17% of the market’s total revenue, compared to UPS’s nearly 32% of revenues and FedEx, with 25% of the available revenue, according to ShipMatrix. 

“By any standard our financial situation is precarious. No organization, even the Postal Service, can lose billions every year without consequences. Over the coming 12 months, we are going to act with urgency to get on a financially sustainable path,” Steiner said in the video.

Peak season prep

Postal service officials say they are ready for the busiest mailing period of the year. 

Over the past four years, the U.S. Postal Service has invested nearly $20 billion in its facilities, logistics and processing capabilities, to streamline its mail and package network and improve delivery reliability. 

The USPS has added 94 high-tech package sorting machines this year. The installation of 614 total automated sorters over the past five years has increased daily processing capacity from 60 million to 88 million packages. The machines have automated scanning capabilities that allow tracking visibility for customers as packages move through the postal system and can handle larger packages than legacy machines, according to the semi-private agency. 

The Postal Service is hiring 14,000 temporary employees to help handle the surge in letters and parcels, down from 40,000 a few years ago. There is less need for temporary workers after the USPS in 2020 began converting 232,000 precareer employees to full-time positions. 

This year, the national post has opened new facilities in Dallas, Phoenix; Johnson City, Tennessee; and other locations, and will soon open buildings in Memphis, Tennessee; Birmingham, Alabama; Tampa, Florida; and San Antonio, Texas.  Within the past four years, USPS has opened nine regional processing and distribution centers; 19 regional transfer hubs (which now handle two thirds of three-to-five day Ground Advantage packages); 17 local processing centers and 133 sorting and delivery centers. 

At the same time the USPS is adding more efficient infrastructure, it is closing other facilities in an effort to consolidate operations. 

The U.S. Postal Service in 2021 had 427 facilities, many of them operated by contractors or under short-term leases, functioning in an uncoordinated manner. Under the transformation agenda initiated by former Postmaster General Louis DeJoy, the agency is moving to standardize operations by downsizing the network to 250 facilities — 60 regional processing and distribution centers, and 190 local  processing centers that sort letters, flats and parcels for final-mile delivery. Critics say the reorganization has negatively affected service in recent years.

Updated service standards this year allow the USPS to turn around mail within a region in two or three days, an improvement from the past, according to the USPS.

“Without a doubt, the Postal Service is in a better place today than it would have been without these initiatives. They dramatically improved our middle mile operations to transform the Postal Service into a logistics powerhouse,” Steiner said during the board meeting. “While we may change specific initiatives as we move forward and our execution needs improvement, I do not see the need for a fundamental reassessment of our processing and logistics modernization strategies at this time.”

The Postal Service said it has received nearly 29,000 new vehicles this year and deployed more than 24,000 of them on postal delivery routes. The Postal Service expects to acquire a total of 106,480 new vehicles, including 66,000 zero-emission electric vehicles, aimed at improving service reliability and reducing emissions. 

Another Russian overnight massive drone and missile attack on Ukraine has had some serious spillover effects, as the Turkish flagged LPG tanker “Orinda” carrying thousands of metric tons of liquefied petroleum gas was reportedly struck at the port of Izmail in Odesa.

The Turkish vessel was reportedly struck directly by a Russian drone, prompting the immediate evacuation of all 16 crew members, with no casualties reported.

Other civilian vessels were also damaged, with firefighting and emergency crews quickly dispatch to try and contain the blaze. At least a dozen commercial vessels have previously been damaged in similar Russian drone attacks on the port.

Romania is alarmed as the impacted port lies just across the border from the NATO country, and it has ordered the nearby village of Plauru along the Ukraine border to be evacuated.

The Orinda carries 4,000 tons of gas, and so the dangerous incident presents the risk of a major explosion, and containing the fire has proven difficult.

Some are calling for Turkey to take definitive action against Russia. For example Turkish member of parliament Ulaş Karasu (CHP) pointed out on X that “The drone attack targeting the liquefied gas carrier named MT Orinda, flying the Turkish flag, in the Black Sea shows that the war is now targeting Turkish seafarers as well.”

The Turkish politician continued:

Turkish seafarers cannot be left alone in the midst of war! The absence of loss of life is certainly a consolation for us, but the government cannot brush off this attack by calling it “isolated.” The safety of our ships and crew must be ensured!

🇷🇴 Romania evacuates village near Ukraine after Russian drone hits LNG tanker

Residents near Plauru were evacuated after a Russian drone strike in Ukraine’s Izmail area set fire to the Turkish-flagged LNG tanker ORINDA, carrying around 4,000 tons of liquefied gas, Euronews… pic.twitter.com/yNidsVTFaV

— Visegrád 24 (@visegrad24) November 17, 2025

BBC says that it has verified the footage:

The footage appears to have been filmed from the small Romanian village of Plauru, just across the river.The village is now being evacuated due to the ship’s “proximity to Romanian territory and the nature of its cargo”, emergency services say.

Ordina is almost 125m (410ft) long and can hold up to 8292 cubic metres (1.8 million gallons) of fuel, according to ship tracking website Marine Traffic.

The incident demonstrates once again that the longer and more expanded the war on energy sites between Russia and Ukraine grows, the greater the risk of drawing external countries in. Various officials within NATO have long wanted Turkey to take harsher action against Russian shipping to international markets by cutting off access to the Bosphorus and Dardanelles Straits.

Brent crude prices were initially lower, and are now flat, after operations resumed at Russia’s key Black Sea export hub, Novorossiysk. This follows last Friday’s Ukrainian drone strike on the export hub, which had sent prices soaring.

Satellite images confirm major damage to the Sheskharis oil terminal in Novorossiysk after a combined drone and missile strike. Critical loading systems and pipelines were hit. With fires raging and infrastructure crippled, the port may be out of service for a long time. pic.twitter.com/waoSfx0qxj

— NOELREPORTS 🇪🇺 🇺🇦 (@NOELreports) November 15, 2025

Brent slid to $63 per barrel in Asia and Europe after Reuters and Bloomberg reported that crude-loading operations had resumed at Novorossiysk.

Bloomberg noted that two tankers were moored at the export hub on Sunday, while Reuters reported that loading had restarted.

Much of the overnight losses were cut by the time US traders woke up, as Brent prices inched above $64. Last Friday, the drone attack sent crude oil up more than 2%.

Here’s the chart:

“People were expecting a longer outage” at Novorossiysk following the strike, said Mukesh Sahdev, the founder and chief executive officer of Xanalysts Pty. Indications of a resumption are a “bearish signal,” he added. Sahdev was quoted by Bloomberg. 

Ukrainian forces have increasingly targeted Russian oil export chokepoints, including oil-refining, storage, and export infrastructure, using drones and missiles. Novorossiysk was targeted for several key reasons:

1. Russia’s Largest Black Sea Oil Export Terminal: Novorossiysk handles a major share of Russia’s seaborne crude exports, including Urals and CPC Blend. When it goes offline, millions of barrels per day are at risk.

2. Key Outlet for Sanctions-Crimped Russian Supply: With many European ports closed to Russian oil, Black Sea routes have become even more vital. Novorossiysk is one of Moscow’s few remaining large, reliable export points.

3. Gateway to Europe, the Mediterranean, and Global Markets: Tankers from Novorossiysk move oil toward Europe, Turkey, India, and increasingly China. Any disruption affects multiple downstream markets.

4. Linked to CPC Pipeline Exports: The Caspian Pipeline Consortium (CPC) routes Kazakh and Russian crude to Novorossiysk.

The broader oil market outlook heading into 2026 remains bearish (read report). 

By Stuart Chrils of FreightWaves.

The Port of Long Beach is moving containerized cargo ahead of the cumulative record-setting pace achieved in 2024 despite weaker demand that saw October volumes drop by nearly 20% from a year ago.

The hub, which along with the Port of Los Angeles forms the San Pedro port complex, the nation’s busiest, moved a total 839,671 twenty foot equivalent units (TEUs) in October, down 14.9% from October 2024 – the strongest month in its 114-year history.

Imports declined 17.6% to 401,915 TEUs and exports dropped 11.5% to 99,817 TEUs. Empty containers, an indicator of future import shipments, decreased 12.6% to 337,940 TEUs.

Long Beach has moved 8,229,916 TEUs through the first 10 months of 2025, ahead 4.1% y/y and on pace to better 2024’s all-time record volume of more than 9.6 million TEUs.

The port has maintained steady operations despite an uncertain outlook amid ongoing tariff and trade policies, Port of Long Beach Chief Executive Mario Cordero and Chief Operating Officer Noel Hacegaba said in a virtual media call.

In response to a question from FreightWaves about the effect on cargo of the now-paused U.S. port fees on Chinese ships, Cordero said, “I think that the volume speaks for itself. Hopefully this pause — whether it’s ship fees or tariffs — will help the parties find a pragmatic solution that’s not going to impact the American consumer.”

“The consumer has not seen significant tariff impacts given that manufacturers, retailers, and others have shared in incurring some of these costs and mitigating price escalation to the consumer, but that may change as we approach 2026,” said Cordero, who earlier announced his retirement as port chief.

“Consumers will likely see price escalation in the coming months as shippers continue to pass along the cost of tariffs on goods and a higher percentage of these costs will be passed on to the consumer.” 

Hacegaba said the port continues to work with its partners “to anticipate and mitigate issues before they arise to keep cargo and our economy moving.”