Wholesale Inflation Hits 6.5% as a December Fed Hike Looms
October wholesale inflation hits 6.5% and traders price in a December Fed hike. Also: Jensen Huang resigns from Nvidia, SpaceX and Tesla merger talks advance, and Microsoft's outage enters a second day.
Transcript
Alex: Welcome to Finance TL;DR Daily, the podcast where we break down the biggest stories in finance. It's Friday, November thirteenth. Wholesale inflation ran hotter than anyone wanted, and the bond market is feeling it.
Riley: Here's what's moving today: wholesale inflation at six and a half percent and a likely December rate hike, Jensen Huang's sudden exit from Nvidia, SpaceX and Tesla edging toward a merger, and a Microsoft outage now in its second day.
Alex: Stocks slipped at Thursday's close, the S&P down about a third of a percent, but futures are pointing higher this morning, up more than half a percent.
Riley: Wholesale prices first, since they're what's moving bonds this morning.
Alex: And they reach your wallet. Higher yields push up mortgage and car-loan rates, and they squeeze stock valuations. October producer prices, meaning what businesses pay at the wholesale level, rose 0.3% on the month. That's a touch below the 0.4% forecast. Core, which strips out food and energy, also rose 0.3%.
Riley: So a cooler-than-expected month. Yet you opened by calling it hot.
Alex: Because the annual rate is 6.5%, the highest since November 2022, up from 6.3% in September. It's a hair under the 6.6% forecast, but still the highest in almost four years.
Riley: The monthly miss is a small relief and the yearly figure isn't. It also lands on top of a hot CPI reading.
Alex: And hawkish Fed talk. New York Fed President John Williams said the central bank still has "work to do" on inflation.
Riley: How have bonds taken it?
Alex: The 10-year yield is about 5.13% this morning. The 2-year is near 4.85%, up more than 30 basis points this week.
Riley: What I'd watch is the December pricing. CME FedWatch has almost 87% odds of a quarter-point hike and about 13% for a half-point. So the question isn't whether, it's how big.
Alex: A slightly soft monthly print didn't change that. A hike is expected at either size.
Riley: Next, a story with a very different kind of shock. Nvidia's chief executive has resigned.
Alex: Walk me through it.
Riley: It matters because Nvidia is a roughly four-trillion-dollar company at the center of the AI trade, and it reports earnings on Tuesday with no permanent CEO. On Thursday, Jensen Huang resigned effective immediately. That followed his November eighth admission of an affair and a New York Times report of a second. CFO Colette Kress becomes interim CEO, and Harvey Jones is the board's first-ever chair.
Alex: There's also a China angle in the reports.
Riley: Reports link him to a woman U.S. officials suspected of ties to Chinese intelligence, though that's unconfirmed and China denies it. What's confirmed is the market damage. Nvidia's market value went from about $4.5 trillion last week to just over $4 trillion Thursday, a loss of roughly $490 billion.
Alex: Half a trillion dollars gone in a week. Thursday was a recovery of sorts, though?
Riley: It was. The stock was down as much as 14% at the open, its lowest since June 2025, and ended about 4% lower. It's rebounding in pre-market trading.
Alex: What are analysts saying?
Riley: Gil Luria at D.A. Davidson cut his price target to $200 from $300, though he kept his buy rating. He wrote, "we expect a challenging transition for NVIDIA over the next few months."
Alex: So he thinks the business is fine and the leadership is the problem.
Riley: That's how I read it. The test is whether key-person risk spreads to other AI names. Nvidia has also pledged $10 billion around Anthropic's IPO next week.
Alex: Another giant story, this one about two of Elon Musk's companies. Bloomberg reports that SpaceX and Tesla are advancing merger talks, and a deal could be announced as soon as December.
Riley: Why should a Tesla shareholder care?
Alex: Because it would be the largest corporate merger ever, and it touches Tesla stock directly. SpaceX is valued at more than $1.9 trillion since its June IPO, and Tesla at about $1.5 trillion. Tesla shares rose on the report.
Riley: And no terms exist yet. Neither company has disclosed an exchange ratio or a date, and both declined to comment.
Alex: Right, and the ratio is the whole game, since it decides what each side's holders get.
Riley: Then there's control. Musk owns about 20% of Tesla but controls roughly 85% of SpaceX's votes through super-voting shares. Merge them and the question is whose rules survive.
Alex: Then there's the assets. Tesla has a large, profitable manufacturing business in China. SpaceX has U.S. government and defense contracts. Sources say the companies have to work out how to keep those apart.
Riley: And Democrats take control of Congress in January and have pledged to probe Musk's business and political dealings.
Alex: So a signed agreement would be the first hard data point. Until then, the exchange ratio is the number to wait for.
Riley: Last, a different kind of risk. Microsoft's Outlook outage has stretched into a second day, and it's also hit Teams and Copilot.
Alex: Who's affected?
Riley: Nearly everyone who works in an office. It matters to investors because it raises questions about how reliable the cloud and AI services are that so much work now runs on. Bloomberg says it paralyzed government offices, traders and businesses globally. Downdetector logged more than 130,000 Outlook problem reports in the U.S. at the peak, and users in 74 countries were affected.
Alex: And it spilled into AI.
Riley: OpenAI and Anthropic both said their Microsoft connectors were hit. Microsoft has given no timeline for full recovery.
Alex: Microsoft is talking about "encouraging recovery signals."
Riley: That wording referred specifically to Asia Pacific. Not a full restoration.
Alex: Two days of no email. Somewhere an inbox is very, very full.
Riley: It will be full of apologies. The stock is lower in pre-market trading, down about 3% by some measures. Investors were already asking what Microsoft's heavy AI spending will return, and an outage that hits Copilot gives that question a face.
Alex: Inflation, leadership and plumbing all got tested this week.
Riley: And all three come back to who can be relied on when it counts.
Alex: This has been Finance TL;DR Daily. If it was useful, follow the show wherever you're listening. We'll see you on Monday.
In this episode
- Wholesale inflation runs hot: October PPI is up 0.3% on the month and 6.5% from a year ago, the biggest annual gain since late 2022. Treasuries are on pace for their worst week since 'liberation day', and traders see a December Fed hike as nearly certain. — source
- Nvidia CEO Jensen Huang resigns after reports of affairs, including one with a woman US intelligence believes is a Chinese spy. CFO Colette Kress steps in as interim CEO, and the stock is down nearly $500 billion in value this week. — source
- SpaceX and Tesla merger talks are advancing, and a deal could be announced as soon as December. It would be the largest corporate merger ever, though early 2027 is also possible. — source
- Microsoft's Outlook outage stretches into a second day. It also hits Teams and Copilot, and Microsoft shares are down about 3% in premarket trading. — source
Educational content only — not financial advice.