CWS Market Review – November 10, 2026

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CPI Comes in Higher than Expected

This morning, the Bureau of Labor Statistics said that inflation increased by 0.4% last month. That was 0.1% higher than expected, but it’s better than September’s increase of 0.6%.

The core rate, which doesn’t include food or energy costs, rose by 0.3% which was also 0.1% more than expected. That’s unchanged from the September report. The report didn’t have year-over-year comparisons due to last year’s government shutdown.

The takeaway is that inflation has been beaten down, but it’s still a problem. Here’s a look at inflation:

Real earnings didn’t increase at all. In other words, inflation ate up the entire gain for workers. Energy costs were up 0.7%, and gasoline was up a full 1%.

Here are some details from the report:

“Food costs accelerated 0.5%, pushed higher by increases of 1% for snacks, 0.9% for beef and 0.5% for meats, poultry, fish and eggs. Transportation services jumped 0.8%. New vehicle prices increased 0.2% but used cars and trucks fell 1.2%.

Shelter costs were higher by 0.3%, which the BLS said accounted for more than 30% of the headline increase.

Apparel, a tariff-sensitive sector, rose just 0.1% though medical care commodities prices increased 0.5%. Airline fares accelerated 0.4%.”

Today’s report is more ammo for the interest rate hawks who want to raise rates. At the Fed’s last meeting, the central bank voted 10 to 2 to keep rates at the range of 3.75% to 4%. The two dissenting votes wanted to hike rates immediately. They may soon get their wish,

In the trading pits, traders pushed expectations for a December to 100%. Fed Governor Christopher Waller said that a rate hike next month is likely. He even said that a 0.5% increase is on the table. That’s not extreme. Traders think there’s an 11% chance of a 50-point hike.

My view is that the Fed will raise rate by 0.25% next month and then raise again by 0.25% in January or March. Traders think that the Fed will raise three times by June. That could be true, but it’s a little early to say.

What do higher rates mean for us? In general, higher interests are a net negative for stocks. Higher yields are stiff competition against stocks. Higher yields also impact consumers’ pocketbooks. They make it hard for companies to raise money.

Short-term rates often rise when defensive stocks lead the market. In fact, defensive stocks started to lead the market several weeks ago. I suspect that this rotation has just begin.

Tuesday’s CPI report comes shortly after last week’s jobs report. On Friday, the government said that the U.S. economy created 165,000 net new jobs last month. Wall Street had been expecting a gain of 59,000. The unemployment rate fell to 4.1%. The numbers for August and September were also revised higher.

Average hourly earnings rose by 0.4% which was higher than expected (and again, eaten up by inflation). Over the last year, wages are up by 3.1%. The broader U-6 rate rose by 0.3% to 7.9%.

Now let’s look at one of the more unusual stories that’s gripped Wall Street in recent days.

Nvidia CEO Admits Affair with Chinese Spy

This weekend, Jensen Huang, the CEO of Nvidia (NVDA), acknowledged to his board that he had intimate relations with a business executive.

I’ll confess that I always feel a bit queasy with writing about such events. Afterall, people’s private lives, especially their marital issues, are their own business. In this case, however, the details are a bit more complicated since U.S. intelligence has determined that the business executive was a Chinese spy.

Well, that kinda changes things.

Of course, the issue is complicated because Huang is one of the richest people in the world, and Nvidia is one of the most valuable companies in the world. Nvidia is at the heart of the AI revolution.

The company is currently worth more than $4 trillion, trailing only Apple. Mr. Huang will stay on as CEO. Nvidia has an unusual business structure in that Mr. directly controls huge part of the business. Undoubtedly, he’s a brilliant guy and he’s been a tremendous leader. He skipped two grades in high school.

Over the weekend, Jensen Huang wrote a message to the entire company. In it, he said, “there is no excuse for what I did. I am deeply sorry.” Nvidia has said it has no reason to believe that national security has been compromised, but the company is investigating the issue, and it is cooperating with the government.

I assume we’ll get more details soon, but apparently, the government found that the business executive, Alice Huang, had been sending information directly to Beijing. The spy allegations were first reported last month. At the time, he said there was nothing unusual about their relationship. We know Ms. Huang got info from Jensen Huang, but the big question is, how far did she go?

The chip buyer was Ms. Huang or Huang Le, whose biography said she worked in China as a TV reporter before becoming a top executive at a Singapore-based data center company that had become one of Nvidia’s biggest customers in Southeast Asia. It bought more than $4.8 billion in chips since June 2024.

Nvidia has continued doing business with Ms. Huang’s company, Megaspeed, even after The Times reported last year that the Commerce Department was investigating whether the company was helping China smuggle restricted A.I. chips. (Mr. Huang and Ms. Huang are not related.)

The U.S. government had Ms. Huang under surveillance for over a year, and they knew it was an intimate relationship, despite what Mr. Huang claimed. The Chinese Ministry of State Security recruited Ms. Huang and she was to target Mr. Huang. The U.S. government has limited what AI chips can be sold to China. It appears that the Trump administration approved chip sales to a Chinese firm that may not exist.

Shares of Nvidia dropped at Monday’s open despite the overall tech sector rallying. At its low on Monday, Nvidia had shed $400 billion in market value. By the closing bell, NVDA traded down by 4.4%.

The shares dropped another 5.5% today on the news that Chinese spy linked aided China with $7.5 billion in chip shipments. The U.S. government identified Ms. Huang as a spy three years ago. The AI sector was already nervous, and this news certainly doesn’t help. Since October 6, the Nasdaq 100 has lost $5 trillion. I suspect this is another reason that defensive stocks will continue to prosper.

That’s all for now. There aren’t many economic reports this week, but the retail sales report will be out next Tuesday. I’ll have more for you in the next issue of CWS Market Review.

– Eddy

Posted by on November 10th, 2026 at 4:19 pm


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.