November 2026 Commentary and Economic Outlook

NOVEMBER 2026 EDITION:

Commentary and Economic Outlook

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• Economy

• Stock Market

• Bond Market

MARKET & ECONOMIC OUTLOOK WEBINAR

Be sure to register and attend our Monthly Market & Economic Outlook Webinar scheduled for Thursday, November 12th 2026 @ 1:30PM EDT. In the webinar, Jay Hatfield, Infrastructure Capital Advisors CEO and Portfolio Manager, will walk you through updated market commentary, and economic outlook for the coming months. SIGN UP!

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Economy:

• Despite headlines to the contrary, the recent strong 3.4% increase in GDP was driven by one-time events.  The strong print was driven by an anomalous 1% contribution from government spending driven by defense, and by above average spending from consumers, which contributed 3.1% to the increase. Investment spending only contributed a net .3% as most tech spending that comes from imports was largely offset by the 3.3% decline in housing investment that is primarily domestic spending driven.

• We are forecasting that economic growth slows to only 1.5% next year as the deepening recession in housing investment caused by hawkish Fed policy offsets the domestic portion of strong tech investment.  We also expect government expenditures to decline due to the wind down of the Iranian war and consumer spending to be flat contributing 1.6% to growth.

• France needs to FREXIT

  • France can no longer afford to be in the Euro Zone as its weak economic growth and large budget deficits cannot be sustained in the ECB’s tight money framework with an arbitrarily low 2% target. Historically, real economic growth is higher when countries run inflation in the 3-4%. 

  • France is running a budget deficit of almost 6% and debt to GDP is projected to be above 120% by next year.  Meanwhile economic growth is anemic at 0.5%. France’s budget deficit is twice the Euro Zone guideline of 3%. The ECB is pursuing an irrational monetary tightening as inflation is solely being driven by higher energy prices.

• In September, ICA’s real-time market inflation, CPI-R, is tracking at 1.36% YoY vs Core CPI of 2.57% YoY. Core CPI Shelter was 3.15% vs InfraCap’s ICA’s Realtime Shelter index showing 0.30% YoY.

Infrastructure Capital Real Time Consumer Price Index: CPI-R

• Annualizing the trailing 3 months of Core CPI results in inflation of only 1.64%.

• When adjusting Core PCE with our shelter index and excluding Financial Services and Airfares, PCE Core was +0.22% in September and +2.26% YoY. This compares to reported PCE Core of +0.32% in September and 3.12% YoY.

• Core PCE may never hit 2% as the methodology for calculating medical care costs results in much higher levels of inflation in the 3.5% range vs. CPI at 2.5% and the 20% weight in PCE means that it will be extremely difficult to ever hit 2% except if there is a deep recession or financial crisis.

• The Fed has failed to realize that the PCE Index has become highly distorted and should be abandoned as it preferred gauge. It also needs to incorporate the money supply in its inflation forecasting model and move its inflation target to a range of 2-3%.

• CPI Core Should be the Fed’s preferred inflation gauge as PCE core has become completely distorted:

  • CPI is measured using real consumption and real prices vs. PCE that uses 30% imputed consumption and imputed prices.

  • CPI is used exclusively in contracts such as Social Security indexing and TIPS whereas PCE is only used by bureaucrats at the BEA.

Stock Market:

• We are neutral on the stock market with a 7,400 - 8,000 year-end 2026 target on the S&P which represents 19x 2027 S&P earnings and assumes the 10-year in the 4.75%-5.00% range. Our target assumes oil price increases moderate and WTI trades in the $80-100 range.

  • The election combined with high oil prices and a hawkish Fed are likely to keep stock prices capped through year end.

  • Following the Democratic congressional sweep, proposed corporate and capital gains tax hikes will pressure stock prices.

• On May 12th we launched the Infrastructure Capital Nasdaq Option Income ETF, QVOL. The objective of the fund is to seek high income and outperform the Nasdaq on a total return basis by screening for reasonable valuations based on PEG ratios (Price Earnings ÷ Growth). We seek to eliminate the “Dogs of the Daq”, which are overvalued companies such as Tesla, SpaceX, Comcast, Charter, KHC, Mondelez, WMT and Costco.

• QVOL achieves a high level of income by writing single stock call options which provides theta above that of Index or ETF calls.

Bond Market:

• The Only Financial Condition that Matters is the 30-Year Mortgage:

  • The Fed controls short- and long-term interest rates which almost exclusively impact the housing sector.  The 30-year mortgage rate is over 7.6% and near 25-year highs. Eleven out of twelve US recessions were caused by a housing decline.

• Interest rate sensitive sectors of the stock market are extremely weak including residential and commercial real estate and only tech is supporting the stock market.

• The housing market will likely go into a major recession due to the recent 150bp increase in the 30-year Mortgage to over 7.5%.

• We estimate that Fed rate hikes will slow GDP growth to drop below 2% in 2027 vs. potential of over 3% as the drag from declining housing and construction investment offsets the boom in AI infrastructure and consumer spending moderates from higher oil prices and interest rates.

• High rates will cause a deep recession in housing with a likely violation of the Hatfield recession rule.  We will avoid a full recession as the boom in tech spending offsets the housing and construction recession.

• We expect the labor market to slow by year end as the impact of the 125bp increase in 10-year rates is felt in the housing market and other interest sensitive areas.

• The Fed should back off its irrational rate increase policy as monetary policy should focus on core inflation not inflation driven by oil prices.   The Fed should recognize its primary impact is on the interest sensitive sectors of the economy which is dominated by housing.  If the Fed had focused on the housing sector in early 2021 it would have avoided its historic “transitory” blunder as housing prices in early 2021 were surging by 20% Y/Y in response to the zero percent Fed Funds rate.  The Fed’s most recent policy error indicates a need for fundamental reform of its forecasting models, arbitrary 2% inflation target and the deeply flawed inflation indices it follows.  We are looking forward to the Fed’s task force results that may address some of these fundamental flaws.

DISCLOSURE

This information is not an offer to sell, or solicitation of an offer to buy any investment product, security, or services offered by Jay Hatfield, or Infrastructure Capital Advisors, LLC, (”ICA”) or its affiliates. ICA, will only conduct such solicitation of an offer to buy any investment product or service offered by ICA, if at all, by (1) purported definitive documentation (which will include disclosures relating to investment objective, policies, risk factors, fees, tax implications and relevant qualifications), (2) to qualified participants, if applicable, and (3) only in those jurisdictions where permitted by law. Jay Hatfield or ICA may have a beneficial long or short position in securities discussed either through stock ownership, options, or other derivatives; nonetheless, under no circumstances does any article or interview represent a recommendation to buy or sell these securities. This discussion is intended to provide insight into stocks and the market for entertainment and information purposes only and is not a solicitation of any kind. ICA buys and sells securities on behalf of its fund investors and may do so, before and after any particular article herein is published, with respect to the securities discussed in any article posted. ICA’s appraisal of a company (price target) is only one factor that affects its decision whether to buy or sell shares in that company. Other factors might include, but are not limited to, the presence of mandatory limits on individual positions, decisions regarding portfolio exposures, and general market conditions and liquidity needs. As such, there may not always be consistency between the views expressed here and ICA’s trading or holdings on behalf of its fund investors. There may be conflicts between the content posted or discussed and the interests of ICA. Please reach out to the ICA for more information. Investors should make their own decisions regarding any investments mentioned, and their prospects based on their independent research, and not on any subjective opinion(s) made either by ICA, ICA employees or affiliates. The information presented should not be construed as legal, tax or accounting advice or as a recommendation to invest in any of the products or strategies described, and may not be appropriate for individual investors. Such persons are urged to consult their own legal, tax and investment counsel before making any investment decision.This material must be preceded or accompanied by a prospectus. The information contained herein represents our subjective belief and opinions and should not be construed as investment, tax, legal, or financial advice. For a prospectus with this and other information about the Funds, please visit www.infracapfunds.com. Investors should consider the investment objectives, risks, charges, and expenses carefully before investing. Please read the prospectus carefully before investing. For more information about the Funds, Fund strategies or Infrastructure Capital, please reach out to Craig Starr at 212-763-8336 (Craig.Starr@icmllc.com). The Funds are distributed either by Quasar Distributors, LLC or by VP Distributors, LLC, an affiliate of Virtus ETF Advisers, LLC. QVOL, ICAP, SCAP, and BNDS ETFs are distributed by Quasar Distributors LLC. PFFA, PFFR, and AMZA ETFs are distributed by VP Distributors, LLC an affiliated of Virtus ETF Advisers, LLC.