Global markets rose over the week ending the market pullback over the past few weeks. The renewed optimism over potential Federal Reserve rate cuts and AI-related technology stocks helped supported broader market gains. Economic data released this week indicated recovery in manufacturing and services. Apple surpassed Samsung as the leading supplier of smartphones. Alphabet gained from Meta’s exploration of the possibility of replacing Nvidia’s chips with Google’s custom AI chips. A Bloomberg analysis has estimated record volumes of bonds being issued to fund $570 billion in AI-related capex for data centers and GPUs by big technology firms like Alphabet, Meta, Amazon, etc. 

On the geopolitical front, U.S. and Ukrainian officials held talks in Abu Dhabi amid Washington’s renewed push for a Ukraine peace deal, even as Kyiv endured deadly missile strikes and NATO states reported escalating drone incursions. A catastrophic blaze tore through the Wang Fuk Court residential complex in Hong Kong’s Tai Po district, leading to multiple casualties. The U.K. budget raised taxes on dividends and properties. Middle East ceasefire remains fragile amid Israeli strikes in Gaza and Lebanon, while Houthi suspension of Red Sea attacks offered cautious optimism for Suez Canal traffic. The G20 Summit in South Africa proceeded without US attendance due to bilateral disputes, highlighting geopolitical fragmentation.

Global Updates
  • The MSCI All Country World Index rose over the week, as renewed optimism over potential Federal Reserve rate cuts led to broader market gains.
  • BHP has withdrawn its plans to acquire Anglo American. Anglo and Teck Resources announced a $53 billion merger deal, which was later approved by the Canadian government.
  • Novo Nordisk stock price has declined following Ozempic’s failed its Alzheimer’s drug trial. The stock recovered after Amycretin yielded promising results in its diabetes drug trials. 
  • Canadian retail sales in September exceeded expectations despite a 0.7% overall decline, driven by a sharp 2.9% drop in motor vehicles and parts.
  • The UK budget increased taxes on dividends, payments to shareholders, as well as on property and savings income by 2%, and is expected to generate an additional £2.1 billion in revenue for the U.K. government. 
  • Ukraine has rejected the leaked 28-point U.S. peace plan as favoring Russia. A revised 19-point draft was approved by Kyiv following the Geneva talks between U.S. and Ukrainian officials, in which NATO membership and territorial sovereignty remain unresolved.
  • China’s Taiping Insurance Holdings company shares plunged following reports the company could face significant losses from its exposure to the massive fire at Hong Kong’s Wang Fuk Court residential complex.
  • Crude prices rebounded early in the week after last week’s steep losses, supported by rising expectations of a U.S. Fed rate cut and fading optimism over a Russia–Ukraine peace deal.
  • Copper surged to record highs on supply disruptions in Chile and Indonesia and strong demand from EV and data center sectors. UBS has projected a copper market deficit of nearly 407,000 tonnes by 2026.
U.S. Equity
  • U.S. equity markets recovered this week with the broad equity market indices S&P 500, Nasdaq and Dow Jones rising over the shorter thanksgiving trading week. The upward revision of the rate cut probability to 70% due to labor market weakness, as suggested by Federal Reserve Governor Christopher Waller and New York Fed President John Williams, contributed to a recovery of the equity markets. The earnings reported so far indicate 8% higher sales and 15% higher earnings over the previous quarter, marking the seventh consecutive quarter of growth in corporate revenues and earnings. Five sectors have reported earnings growth higher than 20%. 
  • In economic data, the third quarter U.S. GDP growth is now estimated at 3% by The Economist and above 4% by the Atlanta Fed. 
  • The S&P Global US PMI signaled an expansion in manufacturing and services with PMI readings of 52.5 and 55 in October. The Producer Price Index rose by 0.3% in September, primarily due to higher food and energy costs.
  • The University of Michigan has lowered its US inflation expectations for the 1-year and 10-year periods to 4.5% and 3.4% respectively. The Conference Board’s Consumer Confidence Index also declined to a seven-month low of 88.7 in November.
  • Tesla stock rallied after CEO Elon Musk announced plans to aggressively scale AI chip production aggressively and investing in new chip designs and eventually surpass other chip makers. 
  • President Trump’s plans to extend subsidies to lower the costs of health care premiums under the Affordable Care Act were compromised by conservative republicans. U.S. Treasury Secretary Scott Bessent had earlier indicated significant health care policy announcements to reduce costs would be made during the week. 
  • Reports suggest Meta is exploring the use of Google’s custom AI chips, which has weighed on Nvidia’s stock prices due to expectations of increased competition for its chips. On the other hand, Alphabet stock continued to rally pushing the company’s market capitalization close to the $4 trillion benchmark. 
  • The trading platform operator Robinhood Markets’ stock rallied after the company announced its plans to acquire a stake in LedgerX, to expand its presence in the contracts market.
  • Dell Technologies’ stock rallied after raising its full-year revenue outlook to  the $111.2 billion to $112.2 billion range and earnings midpoint to $9.92. Dell attributed the upward revision to a higher AI-driven demand for its AI servers.
  • HP announced plans to offload approximately 10% of its workforce, 4,000 to 6,00 roles over the next three fiscal years to save $1 billion. 
  • Apple is expected to replace Samsung as the leading smartphone supplier reaching 19.4% of the global market for the first time. 
  • Kevin Hassett, the Director of the National Economic Council, has been identified as the leading contender to replace Federal Reserve Chair Jerome Powell.
Fixed Income
  • The Bloomberg U.S. Aggregate Bond Index rose over the week.
  • The U.S. 10-year Treasury yield declined to 4.009% and the yield on the 2-year note edged up to 3.51% over the week. 
  • The U.S. Dollar Index declined to 99.684 this week due to the higher likelihood of a December rate cut.

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