Macro Briefing - Tuesday, Dec. 2

US manufacturing contracted for a ninth straight month in November, based on the ISM Manufacturing Index. “The manufacturing sector continues to be weighed down by the unpredictable tariffs landscape,” said Stephen Stanley, chief U.S. economist at Santander U.S. Capital Markets.Contrasting with the weakness in the ISM Manufacturing Index (see above), the S&P US Manufacturing PMI reflects moderate growth in November. Despite the stronger reading, Chris Williamson, chief business economist at S&P Global Market Intelligence, advises: ““Although the headline PMI signaled a further expansion of factory activity in November, the health of the US manufacturing sector gets more worrying the more you scratch under the surface. The main impetus came from a strong rise in factory production, but growth in new order inflows slowed sharply, hinting at a marked weakening of demand growth.”Japan’s 2-year bond yield rises to highest level since 2008 after comments from the Bank of Japan chief highlights a possible December rate hike. The rise in Japanese yields reverberated across global fixed-income markets, triggering declines in bonds from the US to Germany. “Global bonds are feeling the butterfly effect following the Bank of Japan’s hawkish signal to prepare for a December rate hike,” said Matt Miskin, co-chief investment strategist at Manulife John Hancock Investments.The Organization for Economic Cooperation and Development upgraded its outlook for global and U.S. economic growth this year. The group’s revised forecast for US growth this year is 2%, up from the 1.6% it had forecast in June.Fed funds futures continue to price in a high probability that the Federal Reserve will cut interest rates again at next week’s policy meeting. Meantime, the US 10-year yield rose sharply on Monday, jumping to 4.09%.(Click on image to enlarge)More By This Author:Total Return Forecasts: Major Asset Classes - Tuesday, Dec. 2Macro Briefing - Monday, Dec. 1Major Asset Classes November 2025 Performance Review