Edgen Stock·Nov 24 2025, 12:57
[1] How major US stock indexes fared Friday, 11/21/2025 (https://www.seattletimes.com/business/how-maj ...)[2] Stock Market on Nov. 21, 2025: Dow, S&P 500, Nasdaq end higher ... (https://www.marketwatch.com/livecoverage/stoc ...)[3] Weekly Systematic Trading Update - by Michael Harris (https://priceactionlab.substack.com/p/weekly- ...)
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Nov 24 2025, 13:38
Federal Reserve Remains Cautious on AI-Driven Productivity Gains Amid Job Market Concerns
## Executive Summary The U.S. Federal Reserve is maintaining a cautious policy stance regarding the economic impact of Artificial Intelligence. While preliminary data suggests AI is beginning to deliver measurable productivity gains, the central bank remains hesitant to alter its monetary policy framework. This reluctance stems from the profound uncertainty surrounding AI's long-term effects on the labor market and a strategic decision to avoid the policy missteps of the dot-com era, when premature bets on technology-fueled growth contributed to economic instability. ## The Data: A Nascent Productivity Boom? Several economic analyses have attempted to quantify the impact of generative AI since the widespread release of tools like **ChatGPT**. Research from the **St. Louis Fed** estimated that generative AI could increase U.S. productivity by 1.1% by the second half of 2024. Other studies have suggested a similar lift, with some finding a potential boost to labor productivity of as much as 1.3%. However, the data is not conclusive. Other research has found no significant corresponding changes in earnings or hours worked, suggesting that the productivity benefits have not yet translated into broad economic metrics. This divergence in findings underscores the difficulty in measuring the real-time impact of this rapidly evolving technology. ## Market Implications: A White-Collar Employment Crisis The primary source of the Fed's caution is the dual-sided nature of AI's effect on employment. While it can enhance worker productivity, it also poses a significant risk of job displacement. This concern is most acute for white-collar professions. According to a study by **OpenAI**, 19% of U.S. workers could see more than half of their tasks impacted by AI. This has fueled widespread anxiety, with one survey indicating that 43% of workers believe AI will significantly alter their jobs within five years. Expert commentary has amplified these concerns. **Dario Amodei**, CEO of the prominent AI company **Anthropic**, issued a stark warning about a potential "white-collar bloodbath," urging the government and technology companies to prepare for a significant societal shift. This sentiment challenges the narrative that AI will simply automate routine tasks, suggesting instead that it could replace entire roles that require advanced cognitive skills. ## The "Greenspan Precedent" and Broader Context The Fed's current approach is heavily influenced by the memory of the late 1990s. During that period, Federal Reserve Chair **Alan Greenspan** made a policy "gamble" by keeping interest rates low, based on the belief that the internet and new computing technologies were creating a productivity miracle that would keep inflation in check. While productivity did rise, the policy was also seen as having fueled the dot-com bubble. The current Federal Reserve is deliberately seeking to avoid a similar scenario, opting for a "watchful waiting" strategy until the data on both productivity and employment becomes clearer and more sustained. This conservative stance signals that the bar for adjusting monetary policy based on anticipated technology gains is now exceptionally high, introducing a layer of prolonged uncertainty for markets.
Nov 24 2025, 13:01
Novo Nordisk Shares Fall 10% as Oral Semaglutide Fails in Alzheimer's Trial
## Executive Summary **Novo Nordisk** (NOVOb.CO) announced on Monday that its phase 3 clinical trials, evoke and evoke+, for an oral version of semaglutide in treating early-stage Alzheimer's disease, failed to meet their primary endpoints. The news triggered a significant sell-off in the company's shares, which fell by over 10% in Copenhagen. The trial's failure represents a considerable setback in the search for effective Alzheimer's treatments and raises questions about the broader potential of GLP-1 class drugs in treating neurodegenerative conditions. ## The Event in Detail The two late-stage trials, known as **evoke** and **evoke+**, were global, randomized, placebo-controlled studies designed to assess the efficacy of a once-daily 14 mg dose of oral semaglutide. The primary goal was to demonstrate a statistically significant reduction in the progression of cognitive decline in patients with early-stage symptomatic Alzheimer's disease. The primary endpoint was measured by the change in the Clinical Dementia Rating – Sum of Boxes (CDR-SB) score from baseline over a 2-year period. According to the top-line results released by **Novo Nordisk**, the trials did not confirm the superiority of semaglutide over a placebo in slowing the disease's progression based on this metric. The failure was a significant disappointment for a trial that was being closely watched by the medical and investment communities. ## Market Implications The market reaction to the announcement was immediate and severe. **Novo Nordisk's** shares plummeted by as much as 12% in Copenhagen trading before recovering slightly to a loss of approximately 10.3%. This sharp decline reflects investor disappointment and a re-evaluation of the drug's potential market beyond its established uses in diabetes and weight management. The failure negates a potential multi-billion dollar market expansion for semaglutide and puts more pressure on the company's pipeline. It also provides a relative advantage to competitors in the Alzheimer's space and those developing other GLP-1 drugs, as the focus shifts to alternative mechanisms and molecules. ## Broader Context The outcome of the evoke trials has wider implications for the pharmaceutical industry. There was considerable hope that **GLP-1** agonists, a highly successful class of drugs for metabolic diseases, could be effectively repurposed to combat neurodegenerative disorders like Alzheimer's. The failure of oral semaglutide in this large-scale trial tempers those expectations significantly. While the result is a blow to **Novo Nordisk's** ambitions in neurology, it also underscores the profound difficulty of developing effective treatments for Alzheimer's disease, a condition that has seen numerous high-profile clinical trial failures. This event will likely lead researchers to reconsider the specific pathways through which GLP-1 drugs might affect brain health and whether different formulations or related molecules could yield a different result in the future.
Nov 24 2025, 12:59
Federal Reserve Governor Waller Advocates for December Rate Cut, Citing Weakening Labor Market
## Executive Summary Federal Reserve Governor Christopher Waller has signaled strong support for an interest rate cut at the December Federal Open Market Committee (FOMC) meeting. Citing significant concerns over a weakening U.S. labor market, Waller advocated for a 25 basis point reduction to the federal funds rate. This position is based on his analysis that hiring has slowed sharply and that risks to employment are rising, warranting a preemptive policy adjustment to provide "additional insurance" against a more severe downturn. ## The Event in Detail In public remarks, Governor Waller articulated a clear case for monetary easing. "My focus is on the labor market," he stated, emphasizing that months of weakening data have solidified his view. He explicitly endorsed a "0.25 percentage point reduction in the benchmark interest rate at the December Federal Open Market Committee (FOMC) meeting," scheduled for December 9-10. Waller noted that data, including rising state unemployment claims and an increase in layoff announcements, indicates the job market is near "stall speed." He dismissed the idea that any forthcoming data would likely alter his assessment, suggesting a firm conviction in his dovish stance. ## Financial Mechanics of the Proposed Cut The proposed action involves a **25 basis point (0.25%)** reduction in the target range for the federal funds rate, the benchmark that influences borrowing costs across the economy. Such a move is considered a dovish monetary policy action, designed to stimulate economic activity by making it cheaper for businesses and consumers to borrow money. By advocating for this cut, Waller aims to move the policy stance "toward a more neutral setting" that is less restrictive, thereby supporting employment without, in his view, risking a reacceleration of inflation. ## Market Implications Waller's comments provide a clear signal to financial markets about the potential direction of U.S. monetary policy. A December rate cut, if enacted, would likely be interpreted by investors as a confirmation that the central bank is prioritizing its mandate for maximum employment over inflation concerns, which Waller believes are subsiding. While lower interest rates are generally supportive of equity valuations, the underlying reason—a weakening labor market—could temper investor optimism. The remarks build a public case for a policy pivot and will increase market focus on upcoming employment data as a key determinant for the FOMC's final decision. ## Broader Context This advocacy for a rate cut occurs amid a broader debate within the Federal Reserve regarding the appropriate policy path. Waller's focus on the labor market highlights a shift in perceived risks. He noted that U.S. firms have begun discussing layoffs more frequently, partly as they plan for weaker demand and potential productivity gains from **Artificial Intelligence (AI)**. By urging the Fed to put more weight on risks to the job market, Waller is positioning himself as a proponent of proactive measures to sustain the economic expansion, even as core inflation approaches the Fed's target.