Good morning, investors. As much as AI has stolen headlines in recent months, a quiet and equally as important story is that of the K-shape economy.

We’re breaking down what to know today.

The economy isn’t working for everyone but you likely won’t hear stock market investors complaining much. 

Even with the latest tech sell-off, asset owners have fared extremely well against history over the last several years, with the S&P 500 on pace to notch a rare third consecutive 20% annual return. 

At the same time, many middle- and low-income households feel restricted by slow wage growth, sticky inflation and high borrowing costs. 

That shows up in historically-negative consumer sentiment data. 

“The divide between households with wealth and those without it has always existed, but today that divide is actually increasing,” Sam Ro, founder and author of the financial newsletter TKer, told me on my show, Full Signal. 

The economic split is evident in the stock market itself. 

The S&P 500’s Consumer Discretionary sector — tied to households with high disposable incomes — has climbed over recent months, diverging from Consumer Staples, a proxy for everyone else. 

Torsten Slok, chief economist at Apollo, pointed out in a note that stocks and home values keep climbing while cash flow from fixed income and private credit hover at multi-decade highs. 

“The economy is unfolding in such a way that it happens to be benefitting the businesses generating earnings in the stock market and those who are exposed to that stock market,” Ro said. 

This tension — worsening sentiment alongside booming markets — forms the crux of the K-shaped narrative. 

That said, Ro noted that even as household finances may be deteriorating directionally, they remain relatively strong on an absolute level. 

That suggests the gap between how people feel and what the data says depends heavily on whether you’re on the rising or falling branch of the “K.”

These days, however, positioning on the branch largely comes down to whether you own assets. 

Tune in to our latest episode of Full Signal featuring Sam Ro on Spotify, Apple, or YouTube.

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📈Nvidia earnings could revive the tech rally. While skepticism about AI spending has climbed in recent weeks, another blowout quarter from the chip king could juice markets once again. Nvidia has said it expects roughly $500 billion in chip sales over the next year. (Barron’s)

🚀 Alphabet stock hit a new record. Shares of the Google parent rallied 3% Monday, the first trading day after Berkshire Hathaway revealed a $4.9 billion stake in the company. (CNBC)

🗓 November 18, 2010: General Motors re-listed shares in a $15.8 billion IPO after its government-backed bankruptcy, marking a key milestone in the post-crisis restructuring of Detroit.

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📰 I’m Phil Rosen, co-founder and editor-in-chief of Opening Bell Daily. I’ve published books, lived on three continents, and won awards for my journalism, which has appeared in Business Insider, Fortune, Yahoo Finance, Bloomberg and Inc. Magazine.

I write our flagship newsletter to prepare you for each trading day — unpacking markets, economic data and Wall Street with analysis you won’t find anywhere else.

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