NAB Morning Call Too much is not enough
Nov 20, 2025
Ken Crompton, NAB Markets economist, shares insights on equity markets, focusing on NVIDIA's recent earnings and the subsequent market reactions. They dissect the cautious sentiment surrounding fluctuating job data and how mixed signals complicate the Fed's outlook. Crompton also highlights rising retail spending trends in Australia and discusses Japan's significant stimulus package, revealing global market dynamics. Additionally, they touch on oil price declines, geopolitical factors, and the upcoming PMI releases that could influence markets.
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AI Earnings Versus Frosty Valuations
- NVIDIA's strong AI earnings highlight rapid demand but market valuations look frothy and profit-taking followed the initial rally.
- Ken Crompton suggests enthusiasm faded as investors reassessed stretched AI valuations despite record revenue and upbeat guidance.
Conflicting US Jobs Signals
- US labour data painted a mixed picture with unemployment ticking up while payrolls showed solid hiring, creating ambiguity for markets.
- Ken Crompton notes this mixed signal helps explain why two-year Treasury yields fell and markets price less chance of a December Fed hike.
Claims Signal Slow Weakening
- Weekly initial jobless claims were released in bulk and hovered around the mid-220,000s with continuing claims rising to about 1.9 million.
- Crompton says the slowly rising ongoing claims are consistent with a low-hiring, low-firing economy and a gradual unemployment uptick.