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December 19, 2025

Expected Fed Easing Fuels Late Market Gains

Global markets retreated sharply this week on adverse labor market data and apprehensions of an AI bubble. The week, however, ended on a positive note, buoyed by the announcement of cooling inflation data. Micron Technology outperformed the technology sector due to strong quarterly performance and an upbeat guidance for the second fiscal quarter. 

On the geopolitical front, President Trump addressed the nation recollecting the administration’s accomplishments in reducing border crossings and lowering prices. President Donald Trump also ordered a blockade on oil tankers entering or exiting Venezuela. Kevin Hassett’s candidacy for the post Federal Reserve chair encountered increasing dissent from within the administration. The debate over the independence of the Federal Reserve was revived by President Donald Trump suggesting an advisory role on interest rate decisions.

Global Updates
  • The MSCI All Country World Index fell during the week, as investors reacted to soft labor market data, indicating slower non-farm payroll growth and a rise in unemployment, and brought renewed doubts about further Fed rate cuts.
  • The US unemployment rate increased to 4.6% in November.
  • The HCOB Flash Eurozone Manufacturing PMI fell to 49.2 in December.
  • The annual inflation rate in the UK slowed to 3.2% in November, compared to 3.6% in October and forecasts of 3.5%. The largest downward contribution came from prices for food and non-alcoholic beverages.
  • Ukraine signals a major shift in negotiations with Russia by dropping its demand for NATO membership, aiming to advance peace talks.
  • President Donald Trump ordered on Tuesday a “blockade” of all sanctioned oil tankers entering and leaving Venezuela, in Washington’s latest move to increase pressure on Nicolas Maduro’s government, targeting its main source of income.
  • Pfizer fell after the drugmaker forecast a challenging 2026 due to weaker sales of COVID-19 products and squeezed margins.
  • Diageo has agreed to sell its 65% stake in East African Breweries Ltd. to Japan’s Asahi Group Holdings Ltd. for $2.3 billion.
U.S. Equity
  • U.S. equity markets retreated over the week, with major broad-based indices posting losses. The reemergence of fears of an AI bubble and labor market data indicating four-year high unemployment weighed on investor sentiments. However, the markets recovered on Thursday following the release of data signaling cooler than expected inflation in November. 
  • The Bureau of Labor Statistics reported that consumer price inflation eased to 2.7% in November, down from 3.0% in September. Core inflation also declined, moving from 3.0% in September to 2.6% in November. The moderation in inflation was largely driven by lower prices for hotel stays, recreation, and apparel, along with a slowdown in shelter costs. However, economists expressed caution regarding the inflation data, citing potential distortions due to the absence of October price data. 
  • The Bureau of Labor Statistics reported that the unemployment rate rose to a four-year high of 4.6% in November, while the economy added 64,000 jobs. The report also included partial October data, as complete figures were unavailable due to the government shutdown
  • Micron Technology reported fiscal first-quarter earnings per share of $4.78, significantly exceeding expectations, on revenue of $13.64 billion, also above estimates. The company raised its fiscal second-quarter revenue guidance to $18.70 billion, citing robust AI-driven demand for computer memory.
  • Cannabis stocks rallied during the week after President Trump approved the order for the reclassification of Cannabis which is expected to ease the existing restrictions on the industry.
  • Oracle shares declined following reports that Blue Owl Capital withdrew from its planned collaboration on the Michigan data center project. Oracle later clarified that it is in discussions to negotiate a potential equity deal to support the project.
  • Amazon is reportedly considering a $10 billion investment in OpenAI, which may include the adoption of Amazon’s AI chips. 
  • Warner Bros. Discovery board has recommended a rejection of Paramount’s hostile takeover bid of $10.84 billion to its shareholders citing the elevated risks with its financing structure. 
  • Tesla’s market capitalization rose to $1.63 trillion following reports of progress on its autonomous driving initiative and plans to test driverless Robotaxis in Austin, Texas.
  • SpaceX is reportedly preparing for an insider share sale which would value the company at USD 800 billion.
Fixed Income
  • The Bloomberg U.S. Aggregate Bond Index were in line over the week.
  • The U.S. 10-year Treasury yield edged down to 4.12% and the yield on the 2-year note declined to 3.46% over the week.
  • The U.S. Dollar Index edged up to 98.66 over the week.

HCM-030624-063.GWS

December 12, 2025

Fed Easing Fuels Market Gains

Global markets ended the week on a positive note, buoyed by the Federal Reserve’s (Fed) third consecutive rate cut and optimism around global trade. U.S. equities hit record highs. Commodity markets were mixed—gold and silver rose on a weaker dollar and inflation concerns, while crude oil fell on expectations of oversupply amid Russia-Ukraine peace prospects. Central banks in Switzerland and Canada held rates steady, citing contrasting economic conditions. In corporate news, Oracle disappointed on earnings while Broadcom surged on strong AI chip sales. China’s trade surplus crossed $1 trillion, the U.K. posted its largest trade deficit.  

On the geopolitical front, President Trump criticized Ukraine’s peace efforts and hinted at withdrawing U.S. support, as the Russia-Ukraine conflict continues over territorial disputes. Trump also announced a $12 billion aid package to compensate farmers for trade-related losses. In the Middle East, Israel proposed Hamas disarmament under the U.S. peace plan, countering Hamas’s call for a weapons freeze. Meanwhile, renewed tensions between Thailand and Cambodia triggered political instability, culminating in the dissolution of Thailand’s parliament.

Global Updates
  • The MSCI All Country World Index rose during the week, closely tracking the U.S. equity markets and supported by the Fed’s interest rate cut and indications of resurgence in international trade.
  • The Swiss National Bank kept its policy rate unchanged at 0%, citing November inflation of 0% and weak third-quarter economic growth. The Swiss franc’s appreciation, driven by safe-haven demand, has added deflationary pressure on exports. 
  • The Bank of Canada held its policy rate unchanged at 2.25% citing a resilient economy which added 181,000 jobs between September to November and posted a GDP growth of 2.6% in the third quarter. 
  • The United Kingdom reported a higher trade deficit of £22.54 billion in October-the highest since January 2022-the highest since January 2022- driven by a 0.8% decline in exports to £30.96 billion. The British economy also contracted by 0.1% mom in October due to underperformance of the services sector.
  • Eli Lilly’s next-generation obesity drug, Retatrutide, showed promising results in a late-stage trial, highlighting its potential to significantly benefit patients with obesity and arthritis. 
  • Shareholders of Anglo American and Teck Resources have approved their merger, paving the way for the creation of one of the world’s top five copper producers. The deal now awaits clearance from U.K. regulators.
  • China’s trade surplus surpassed $1 trillion for January–November, supported by 5.4% export growth. November exports rose 5.9%, lifting the monthly trade surplus to $112 billion despite a 29% drop in shipments to the U.S. 
  • Gold and Silver prices rose over the week due to the U.S. Fed rate cut in an potentially inflationary environment and the decline in the U.S. dollar.   
  • Crude oil futures declined over the week amid expectations of a global surplus, driven by prospects of a Russia-Ukraine peace deal following the Trump administration’s threat to withdraw support for Ukraine. A Ukrainian drone strike on a Russian oil rig did not derail negotiations. The International Energy Agency continues to forecast oversupply, citing global inventories at a four-year high.
U.S. Equity
  • U.S. equity markets advanced this week, driven by the Fed’s third consecutive rate cut, with the S&P 500 and Dow Jones reaching record highs at 6,900 and above 48,700, respectively. The Nasdaq also gained, though Oracle’s earnings tempered its performance. The Fed lowered its policy rate by 25 bps to a 3.50%–3.75% range in a split decision and projected one additional cut in 2026. Chair Jerome Powell described the economy as facing a “challenging situation,” citing a soft labor market and inflationary pressures from tariffs, and warned that prioritizing employment could heighten inflation risks. AI related technology stocks have declined this week, indicating a potential rotation out of technology stocks. 
  • Inflation is forecast at 3.0% and unemployment at 4.5% by end-2025, easing to 2.5% and 4.4%, respectively, in 2026.
  • Labor market data signaled weakness with weekly jobless claims surging by 44,000 to 236,000—the largest increase in eight months—for the week ended December 6. Job openings rose to 7.7 million in October per JOLTS data, but layoffs climbed to 1.85 million, the highest since January 2023.
  • The U.S. trade deficit narrowed 10.9% in September to a five-year low of $52.8 billion, as exports grew 3.0% to $289.3 billion, offsetting a 0.6% rise in imports to $342.1 billion. 
  • JPMorgan Chase shares lagged after projecting 2026 expenses of $105 billion, driven by investments in AI and competition in credit cards and community banking.
  • Oracle reported an EPS of $2.26 in its fiscal second quarter on a lower than expected revenue of $16.06 billion. Oracle reported $7.98 billion in cloud revenue, $4.1 billion in cloud infrastructure revenue and a 3% lower software revenue of $5.88 billion for the quarter that ended Nov. 30. Oracle’ stock price however declined due to investors’ concerns for rising debt and AI investments and, a negative cash flow of $10 billion in November. 
  • Broadcom reported higher than expected fourth-quarter EPS of $1.95 and revenue of $18.02 billion. Broadcom also projected a higher than estimated 28% growth in its first quarter fiscal revenue to $19.1 billion driven by a 100% growth in its AI chips sales to $8.2 billion.
  • Walmart has transferred its primary listing from the New York Stock Exchange to the Nasdaq to enhance the company’s perception as a technology driven e-commerce company.
Fixed Income
  • The Bloomberg U.S. Aggregate Bond Index rose over the week.
  • The U.S. 10-year Treasury yield declined to 4.14% and the yield on the 2-year note edged lower to 3.53% over the week. Treasury yields declined this week with Fed’s rate cut and announcement of purchases of $40 billion in short-term securities, while strong demand for a $22B 30-year bond sale reinforced the move.
  • The U.S. Dollar Index declined to 98.48 over the week.

HCM-030624-063.GWS

November 28, 2025

Monetary Easing and AI Optimism Drive Global Markets Rebound

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.

HCM-030624-063.GWS

November 21, 2025

Global Equities Under Pressure from Weakness in Technology stocks

Global markets continued to decline over the past week amid concerns of a potential bubble in AI related technology stocks. Equity markets globally mirrored the downturn in U.S. markets, primarily due to a pullback in technology stocks. However, strong third-quarter earnings reported by Nvidia temporarily eased investor fears and provided a brief boost to broader market sentiment. Meanwhile, stronger-than-expected employment data for September, coupled with hawkish commentary from policymakers, reduced expectations of a rate cut in December.

On the geopolitical front, the United States and Saudi Arabia finalized a security agreement designating Saudi Arabia as a major non-NATO ally. The agreement grants Saudi Arabia access to advanced U.S. defense technology, including F-35 fighter jets and Nvidia chips. Additionally, Crown Prince Mohammed bin Salman pledged to invest $1 trillion in the United States. In Canada, Parliament passed Prime Minister Mark Carney’s inaugural budget, averting the risk of snap elections. Tensions between China and Japan resurfaced over Taiwan-related issues. In the U.S., President Trump signed legislation approving the release of the Epstein files. President Trump also lowered tariffs on imported foods.

Global Updates
  • The MSCI All Country World Index declined over the week, reflecting weakness across global equities.
  • Switzerland finalized a trade agreement with the United States, reducing U.S. tariffs from 39% to 15%.
  • Shares of Swedish aerospace company Saab rallied following the announcement of a $3.6 billion deal with the Colombian government for 17 Gripen fighter jets.
  • London-based HSBC is restructuring its capital markets business to strengthen its debt financing division.
  • The Canadian Parliament averted snap elections by passing Prime Minister Mark Carney’s deficit-heavy first budget, which includes a stablecoin policy overseen by the Bank of Canada.
  • Airbus stock surged after securing a $24 billion deal with budget carrier flydubai for 150 jets, with an option for 100 additional aircraft.
  • ByteDance’s valuation rose to $480 billion following a successful auction of its shares.
  • Anticipation of a large stimulus package from Japanese Prime Minister Takaichi pushed long-term borrowing costs higher. Yields on 10-year and 30-year Japanese Government Bonds reached 1.75% (highest since 2008) and 3.32% (record high since issuance), respectively. Japanese equities attracted foreign inflows of ¥1.02 trillion, primarily into technology stocks.
  • Gold ended the week lower amid reduced expectations of a December rate cut.
  • Crude oil prices declined due to interest rate uncertainty and expectations of increased supply, following President Zelenskiy’s willingness to negotiate a Russia–Ukraine peace deal ahead of the U.S. sanctions deadline on Russian energy (November 21).
U.S. Equity
  • Investors pulled back from U.S. equities during the week, reflected in declines across the S&P 500, Dow Jones, and Nasdaq. The retreat from technology stocks drove a broader market downswing, though Nvidia’s stellar returns briefly reversed the trend. Investor concerns remain elevated over overstretched valuations, technology depreciation, and circular deal structures. Amazon founder Jeff Bezos also advised consumers to postpone major purchases, citing the potential risk of an economic recession.
  • The U.S. economy added 119,000 non-farm jobs in September, while the unemployment rate rose to 4.4%, its highest level in 47 months, according to the Bureau of Labor Statistics. Strong labor market data and hawkish commentary in the Fed minutes have reduced the likelihood of a December rate cut to below 50%.
  • Nvidia CEO Jensen Wang dismissed fears of an AI bubble after the company reported an adjusted EPS of $1.30, beating expectations, on revenue growth of 62% to $57 billion in the fiscal third quarter. Nvidia also raised its fourth-quarter revenue outlook to $65 billion, driven by growing AI demand for Rubin and Blackwell architectures.
  • Alphabet shares rallied earlier in the week following Berkshire Hathaway’s $4.9 billion investment in the company. Positive feedback on the performance of Gemini 3 further supported the rally.
  • Walmart reported an adjusted EPS of $0.52, beating estimates, on 5.8% revenue growth to $179.5 billion in the third quarter. Sales rose 4.2%, e-commerce grew 27%, and advertising revenue surged 53%. The retailer raised its full-year revenue growth outlook to 5.1% and adjusted EPS guidance to the $2.58–$2.63 range.
  • Anthropic’s valuation climbed to $350 billion following strategic investments of $5 billion by Microsoft and $10 billion by Nvidia. Azure committed to purchasing 1 gigawatt of computing capacity in Nvidia systems and $30 billion of Microsoft’s computing capacity in Azure.
  • The U.S. government extended a $1 billion loan to Constellation Energy to restart the nuclear reactor at Three Mile Island to meet the rising energy demand.
  • Home Depot posted third-quarter adjusted EPS of $3.74, missing estimates, on revenue of $41.35 billion. The company lowered its full-year earnings outlook by 5%, citing expectations of reduced consumer spending.
  • Lowe’s reported an adjusted EPS of $3.06, beating expectations, on third-quarter revenue of $20.81 billion. However, the company revised its full-year profit outlook downward due to economic slowdown concerns.
  • Target announced a collaboration with OpenAI to attract customers and reverse declining sales. Third-quarter sales fell 1.5% to $25.3 billion, leading to a 3.9% decline in diluted EPS. The retailer also lowered its full-year profit guidance.
  • Boeing signed a provisional agreement with flydubai for 75 of its 737 Max jets, valued at $13 billion.
  • Microsoft and Amazon expressed support for the GAIN AI Act, which aims to prioritize domestic order fulfillment and restrict the export of AI chips to China.
Fixed Income
  • The Bloomberg U.S. Aggregate Bond Index declined over the week.
  • The U.S. 10-year Treasury yield declined to 4.061% and the yield on the 2-year note edged lower to 516% over the week.
  • The S. Dollar Index rose to 100.22 this week due to the decreasing probability of a December rate cut and a falling Yen.

HCM-030624-063.GWS

November 14, 2025

Fed Uncertainty and AI Concerns Lead to Market Jitters

Global equity markets rose slightly over the week, despite a massive selloff on Thursday. Earlier in the week, expectations of an end to the government shutdown initially buoyed the markets. The Dow Jones index also crossed the 48,000 benchmark earlier in the week but lost 800 points on Thursday. Fears of a market correction drove investors out of tech stocks. The diminished possibility of a rate cut at the Federal Reserve’s (Fed) December meeting also weighed on investor sentiments. 

In global geopolitics, the record-breaking 43-day U.S. government shutdown ended after the House of Representatives passed a bill funding the federal government through January 2026. Earlier in the week adverse weather conditions and a shortage of air traffic controllers had caused disruptions and delays to more than 10,000 flights across the United States. In Canada the opposition Conservative Party lost two of its Members of Parliament to resignation and defection, ahead of the upcoming budget vote on November 17. In the UK Health Secretary Wes Streeting has dismissed the public speculations of any plans to challenge Prime Minister Keir Starmer’s leadership.

Global Updates
  • The MSCI All Country World Index posted modest gains over the week, mirroring the rise and subsequent pullback in U.S. equity markets. International investors were initially encouraged by the announcement of a one-year suspension of port fees between the U.S. and China on each other’s shipping fleets. However, later in the week, growing concerns about a potential bubble in AI-related stocks weighed on global sentiment. 
  • In the UK, the ILO unemployment rate rose to 5% for the three-month period ending September, which is the highest unemployment rate since the COVID-19 pandemic.
  • Great-West Lifeco is in the process of consolidating its European subsidiaries into Keyridge Asset Management, which will have $185 billion in assets under management.
  • The Canadian economy added an estimated 67,000 jobs in October, surpassing expectations, while the unemployment rate declined to 6.9%. Job growth was primarily driven by part-time positions, as full-time employment contracted. Additionally, the average hourly wage increased by 4% during the month.
  • Japanese Prime Minister Sanae Takaichi’s preference for low interest rates led to a decline in the Yen. 
  •  The International Energy Agency has projected a 13% growth in global crude oil demand which is expected to reach 113 million barrels per day by 2050.
  • Gold and silver prices posted weekly gains despite a mild pullback following the U.S. government reopening. 
  • Oil prices ended the week lower due to the decline induced by fears of a supply glut. However, prices rose following the Ukrainian drone attack on Novorossiysk. The supply risks from the upcoming sanctions against Lukoil also concerned investors.
U.S. Equity
  • The S&P 500, Dow Jones, and Nasdaq indices posted gains earlier in the week, with the Dow Jones surpassing the record 48,000 mark on Wednesday. However, markets retreated on Thursday amid concerns over a potential AI-driven bubble and diminishing expectations of a December rate cut. The Dow fell by 797 points, while the Nasdaq declined sharply by 2.3% in a single session. Goldman Sachs’ Chief Strategist Peter Oppenheimer also suggested the global equity markets will outperform the U.S. equities over the coming decade. Investor sentiment was further dampened by cautionary remarks from Goldman Sachs CEO David Solomon regarding an AI bubble and Ray Dalio’s warning about the escalating national debt, which has now exceeded $38 trillion. Additionally, the U.S. House of Representatives passed a funding bill to end the 43-day government shutdown. The bill will keep the government funded through January 2026. 
  • Policymakers at the Federal Reserve have expressed concerns about the inflationary risks associated with a potential December rate cut, particularly given the continued stability in the labor market. The absence of labor market data, which was discontinued during the recent government shutdown, is also expected to obfuscate the estimated impact of a rate cut. However, the ADP payroll data has estimated a loss of more than 11,000 jobs over the four-week period ending October 25th. 
  • Nvidia CEO Jensen Huang has requested TSMC to increase the supply of AI chip components including wafers to meet the exponential growth in the demand for its Blackwell AI chips. Nvidia stock declined in the week due to the offloading of Nvidia stock by SoftBank.
  • The U.S. travel industry is estimated to have lost $5.7 billion in revenues due to the decline in Canadian tourists to the U.S. since the U.S.-Canada political frictions began earlier in the year.
Fixed Income
  • The Bloomberg U.S. Aggregate Bond Index declined following an initial rise over the week.
  • The U.S. 10-year Treasury yield rose to 4.111% and the yield on the 2-year note rose to 3.589% over the week. 
  • The U.S. Dollar Index edged lower to 99.26 this week due to diminishing likelihood of a rate cut in December.

HCM-030624-063.GWS

November 7, 2025

Tech Sell-Off and Global Uncertainty Shape Investor Sentiment

This week, global equity markets declined, driven by expectations of a correction in AI-focused technology stocks. Investor sentiment was dampened by Berkshire Hathaway’s stock offloading and cautionary signals from major asset managers citing an overheated market. This created a self-fulfilling cycle that pressured tech stocks worldwide. Additionally, data pointing to an economic slowdown both globally and in the U.S. labor market, further contributed to the market cooling. In contrast, healthcare stocks rose following an agreement between the U.S. government and pharmaceutical firms Eli Lilly and Novo Nordisk.

In global geopolitics, the U.S. government shutdown reached a record-breaking 37th day. Meanwhile, U.S.-Canada trade negotiations remained stalled, despite Prime Minister Mark Carney’s formal apology to President Trump over Ontario’s anti-tariff advertisement. Democratic candidates secured gubernatorial victories in New Jersey and Virginia, as well as the New York City mayoral race. Egypt proposed a deal to Israel offering safe passage for Hamas members in exchange for cooperation in dismantling the terror infrastructure in Gaza.

Global Updates
  • The MSCI All Country World Index declined over the week closely tracking U.S. markets and due to the expectations of a market pullback. 
  • Canada reported 0.3% contraction in its GDP in August, due to declining oil and natural gas prices. Canada’s GDP growth is currently estimated at 0.1%  in September and 0.5% for the third quarter.
  • Prime Minister Mark Carney presented his first federal budget, which is estimated to incur a deficit of $78 billion. 
  •  Japan’s SoftBank announced a joint venture with OpenAI to provide enterprise AI services in Japan.
  • The RatingDog China General Services PMI declined to 52.6 in October due to lower international orders, however also indicating continued expansion in China’s services sector. On the other hand, Chinese exports were lower than expected in October due to a 1.1% decline and imports rose by 1%. 
  • Gold futures edged up due to the rising expectation of a rate cut by the U.S. Fed in December and the continuing U.S. government shutdown. 
  • Oil futures ended the week lower on fears of excess supply and cooling demand for oil. The OPEC+ nations have decided to slightly increase the supply in December followed by a pause in further increases over the first quarter of 2026. Weak job market reports and a mandated 10% reduction  in air traffic in the U.S. have also weighed on international oil prices. U.S. crude stocks have also risen due to higher imports.
U.S. Equity
  • The S&P 500, Dow Jones, and Nasdaq indices were weighed down by concerns of an AI bubble and labour market data. The investors’ AI optimism was originally damaged by Berkshire Hathaway’s stock sales outpacing purchases over the third quarter and its record high cash holdings of $382 billion. The possibility of a 10% to 20% market correction estimated by the major asset managers, including the CEOs of Goldman Sachs and Morgan Stanley, led to a market pullback. s The U.S. Supreme Court is also currently considering the legal validity of the Trump Tariffs, which could have a further impact on the markets. 
  • A report published by Challenger, Gray & Christmas showed that U.S. employers have laid off 153,074 employees in the month of October, due to costs and AI. Technology firms, retailers and service providers led the job cuts in the private sector. The Chicago Fed also estimated unemployment had risen to 4.4% over the month. On the other hand, the ADP jobs report showed the U.S. private sector added 42, 000 jobs in October and pay was 4.5% higher. 
  • President Donald Trump announced deals with Eli Lilly and Novo Nordisk to cut the prices for their GLP-1 weight-loss drugs for the government’s Medicare and Medicaid programs.
  • Pfizer raised its bid to acquire Metsera to $10B. Pfizer is competing with Novo Nordisk in its bids to takeover the weight-loss startup.
  • Tesla shareholders voted on CEO Elon Musk’s trillion dollar pay package. Tesla is also seeking regulatory approval for its autonomous driving software in China. 
  • U.S. airline stocks lagged following U.S. Transportation Secretary Sean Duffy’s order to cut flight traffic by 10% at 40 major U.S. airports. The order was driven by flight disruptions due to the lower availability of air traffic controllers and TSA agents, who have been working without pay since the government shutdown. 
  • Palantir reported an adjusted EPS of $0.21 in the third quarter, on a 63% higher revenue of $1.18 billion. The company raised its full year revenue outlook to the $4.396 billion to $4.4 billion range due to AI driven demand.
  • Advanced Micro Devices posted record 36% growth to a higher-than-expected third-quarter revenue of $9.25 billion and an adjusted EPS of $1.2. Demand for chips by AI data centers led to a 22% jump in sales to $4.3 billion. AMD’s exports of AI chips to China could resume with the one-year U.S.-China trade agreement.
  • In acquisitions this week, Kimberly Clark agreed to acquire Kenvue for $49 billion and Eaton agreed to acquire Boyd Corporation’s thermal business from Goldman Sachs for $9.5 billion.
Fixed Income
  • The Bloomberg U.S. Aggregate Bond Index edged up over the week.
  • The U.S. 10-year Treasury yield edged down to 4.091% and the yield on the 2-year note fell slightly to 3.566% over the week. 
  • The U.S. Dollar Index edged lower to 99.65 this week due to signs of weakness in the U.S. labour market.

HCM-030624-063.GWS

October 31, 2025

From Rate Cuts to Rare Earths: Key Drivers of the Markets This Week

This week, the global equity markets were influenced by major Central Bank policy decisions, corporate earnings and the U.S-China trade deal. President Trump and President Xi Jinping’s meeting in South Korea eased trade tensions between the countries. The U.S. Federal Reserve (Fed.) and Bank of Canada (BoC) cut their policy rates by 25 bps. Five of the ‘Magnificent 7’ companies reported higher than expected earnings in the previous quarter. However, the elevated capital expenditure (capex) projections dampened investors’ optimism. 

In global geopolitics, Argentina’s President Javier Milei’s Freedom Advances party, which is also backed by President Trump, doubled its congressional representation in the latest election. President Trump and Prime Minister Sanae Takaichi signed a critical minerals and rare earths agreement, to reduce the dependence on China. President Trump also announced that the U.S. would resume testing of nuclear weapons. President Trump’s meeting with Prime Minister Carney was cancelled and an additional 10% tariff was imposed on Canadian imports. The Gaza ceasefire agreement is in jeopardy due to the renewed conflict in Gaza.

Global Updates
  • The MSCI All Country World Index rose over the week as investors digested corporate earnings reports, central bank actions and improving trade relations. 
  • Eurozone economic growth of 0.2% in the third quarter beat estimates. The European HCOB PMI reading of 50 in October indicated an expansion in European economic activity, which however contracted in France. Employment, however, declined sharply during the month. 
  • Among the major central bank decisions, the BoC implemented a 25 bps rate cut in its policy rate. On the other hand, the Bank of Japan and the European Central Bank chose to hold rates steady, prioritizing controlling inflation management. 
  • S. and China have reached a preliminary consensus on key issues in their trade talks. The U.S. agreed to lower tariffs on China in leu of rare earth concessions and controlling the drug trade emanating from China. China also resumed its purchases of Soybean cargos from the U.S.
  • President Trump agreed to lower tariffs for Malaysia, Cambodia, Thailand and Vietnam in lieu of narrowing their trade imbalances and supply of critical minerals. 
  • Samsung has announced a collaboration with Nvidia to deploy 50,000 Nvidia GPUs to automate and optimize its facilities manufacturing chips for mobile and robots.
  • In China, the official NBS Manufacturing PMI reading of 49.0 for October, marked the 7th consecutive month of contraction. The decline in new orders and foreign sales accelerated despite the competition among distributors, weighing down prices. 
  • Gold prices briefly fell below the $4,000 per ounce benchmark due to the decline in safe haven demand, following the Fed’s rate cut. Gold prices declined over the week, however ending the week higher than the $4,000 benchmark.
  • Oil futures ended the week lower, due to the projected over supply in the market from the OPEC+ countries, planning to raise production by 137,000 barrels per day from December. 
U.S. Equity
  • The S&P 500, Dow Jones, and Nasdaq indices dipped slightly at the end of the week, after reaching record highs. Investors were enthused by President Trumps lowering of tariffs on China and robust third quarter corporate earnings reports. The spending projections of Meta and Microsoft, however, raised investor concerns. The Fed’s rate cut also had a positive impact on the markets. The markets also displayed a partial market rotation out of big tech. 
  • The U.S. Core CPI inflation was lower than expected, at 0.3% month-over-month and 3% year-over-year for September. The ADP National Employment Report also estimated that 14,250 jobs were added in the U.S. economy over the four-week period ending October 11th.
  • The U.S. Manufacturing PMI and Services PMI for October came in higher than expected at 52.2 and 55.2 respectively, indicating accelerated economic growth.
  • Markets were optimistic regarding the resolution of the Sino-U.S. tariffs at the Trump-Xi meeting in South Korea. President Trump eased tariffs to 47%, in exchange of a crackdown on the fentanyl trade and a stay on the export controls on rare earth by China. The disinvestment in TikTok and export of Nvidia chips remained unresolved. 
  • The Fed eased its policy rate by 25 bps to the 3.75%–4.00% range, to minimize the downside risk in the labor market. Fed Chair Jerome Powell clarified that a future rate cut in the Fed’s December meeting was not a “foregone conclusion” due to the differing opinions among policymakers. 
  • Treasury Secretary Scott Bessent announced the list of final candidates for Federal Reserve Chair which included Christopher Waller, Michelle Bowman Kevin Warsh, Kevin Hassett, and Rick Rieder. President Trump has said that the nomination will be finalized by the year end.
  • Nvidia became the first company to cross the $5 trillion capitalization benchmark. Nvidia’s stock rallied after CEO Jensen Huang announced an agreement with the U.S. Department of Energy to build seven supercomputers for them. He also mentioned that the company has bookings worth $500 billion for the Blackwell and Rubin AI chips, through 2026.
  • A 20.2% jump in Amazon’s cloud revenue to $33 billion pushed third quarter earnings to $1.95 on revenue of $180.17 billion. Amazon has revised its estimated full year capex to rise to $125 billion in 2025.
  • Eli Lilly shares rallied after the company raised its full-year revenue outlook guidance to the $63 billion to $63.5 billion range, driven by strong demand for its drugs Zepbound and Mounjaro. In the third quarter, the company reported adjusted earnings per share of $7.02 on revenue of $17.6 billion, a 54% year-on-year increase. In the quarter the sales of Mounjaro and Zepbound grew to $6.5 billion and $3.59 billion respectively.  
  • UnitedHealth Group reported a higher-than-expected adjusted EPS of $2.92 in the third quarter. The company’s revenue grew 12% year-on-year to $113.16 billion, in line with expectations. 
  • eBay Inc reported a 14% higher adjusted EPS of $1.36 and a 8% growth in its merchandise volumes to $20.1 billion, generating an 8% higher revenue of $2.82 billion in the third quarter. However, the company’s stock lagged due to a lower-than-expected earnings outlook of $1.31 to $1.36 EPS in the fourth quarter due to the removal of the de minimis exemption.
  • Apple reported a higher-than-expected EPS of $1.85 on an 8% higher revenue of $102.47 billion for the fiscal fourth quarter. The sales of iPhones drove up the earnings and revenues. 
  • NVIDIA has announced a $1 billion investment in the AI startup Poolside.
  • Meta reported a 26% growth in its revenue to $51.24 billion and a higher-than-expected adjusted EPS of $7.25. Meta also reported a $15.93 billion tax charge from President Trump’s ‘One Big Beautiful Bill Act’. However, Meta’s stock lagged due to the aggressive capex plans in the $70 billion and $72 billion range in AI.
  • Microsoft reported a $3.1 billion drop in its fiscal first quarter earnings due to its $13 billion investment in OpenAI. Microsoft reported an EPS of $3.72 during the quarter on a revenue of $77.6 billion. The company’s revenue grew by 18%, driven by a 40% growth in cloud business from Azure.
Fixed Income
  • The Bloomberg U.S. Aggregate Bond Index declined over the week.
  • The U.S. 10-year Treasury yield rose sharply to 4.101% and the yield on the 2-year note jumped to 3.609% over the week.
  • The U.S. Dollar Index surged up to 99.49 this week owing to the 25 bps rate cut by the Fed.

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October 24, 2025

Global Markets in Flux: Markets React to Earnings, Trade Tensions and Tumbling Metals

This week, global equity markets were marked by heightened volatility as investors digested corporate earnings reports. Tensions between the U.S. and Russia resurfaced, while the possibility of further restrictions in U.S.-China trade added to market uncertainty. Commodity markets also experienced volatility, with gold and silver recording their largest single-day price drop in 12 years. Crude oil prices climbed amid expectations of increased demand. Additionally, expectations for a rate cut at next week’s Federal Reserve meeting intensified, following softer-than-expected consumer inflation data for September.

In global geopolitics, President Trump’s meeting with President Putin in Hungary was called off, followed by the imposition of new U.S. and E.U. sanctions on Russia. President Trump is scheduled to meet with President Xi Jinping on October 30 in South Korea. The U.S. federal government shutdown entered its fourth consecutive week. Sanae Takaichi was elected as Japan’s first female prime minister, after the Japan Innovation Party and the ruling Liberal Democratic Party formed a coalition government. Global leaders are expected to attend the ASEAN Summit in Kuala Lumpur over the weekend. President Trump also cancelled ongoing trade negotiations with Canada, citing the misuse of former President Ronald Reagan’s voice in an anti-tariff advertisement. Meanwhile, the U.S. plans to seek a United Nations mandate to establish a Gaza security force, following the resumption of the Israel-Hamas ceasefire after renewed hostilities on Sunday.

Global Updates
  • The MSCI All Country World Index advanced over the week as global markets absorbed mixed corporate earnings reports. Markets also tracked declines in U.S. equities, driven by concerns over renewed tensions in U.S.-China trade relations. Earlier this week, President Trump remarked on the unsustainability of current high tariffs on China and expressed optimism about the U.S.-China relationship.
  • The HCOB Flash Eurozone Composite PMI rose to 52.2 in October, while the Manufacturing PMI increased to 50.0, signaling an expansion in business activity for the month.
  • Retail sales in the U.K. are estimated to have grown by 0.5% in September, defying expectations of a contraction amid concerns of an economic slowdown.
  • A meeting is scheduled for October 30 in South Korea between President Trump and President Xi Jinping to address trade tensions ahead of the November 1 deadline for additional tariffs. Tensions have escalated with the introduction of port fees and export restrictions on rare earths and technology.
  • Newly elected Japanese Prime Minister Sanae Takaichi is expected to announce an economic stimulus package to support households in managing inflation. Takaichi is also expected to adopt a dovish policy stance, paving the way for monetary and fiscal easing.
  • SoftBank announced plans to issue $2 billion in U.S.-dollar-denominated bonds and €750 million in hybrid notes, while also planning to expand its investments in artificial intelligence.
  • Canadian Prime Minister Mark Carney is scheduled to meet with Chinese President Xi Jinping next week to discuss enhancing bilateral trade relations and mitigating the impact of U.S. tariffs.
  • The Kospi Index rose on optimism surrounding the potential finalization of a U.S.–South Korea trade agreement, ahead of the APEC Summit in South Korea next week.
  • The U.S. and India are nearing a trade agreement, conditional on India reducing its imports of Russian crude. Indian refiners have begun discussions with Middle Eastern suppliers to secure alternative sources of crude oil.
  • U.S. sanctions on Lukoil and Rosneft have contributed to a rise in crude oil futures. Earlier this week, oil prices climbed after the U.S. Department of Energy announced plans to replenish the Strategic Petroleum Reserve.
  • The year-long rally in gold prices experienced a sharp pullback, with the largest single-day drop in gold and silver prices in 12 years. However, gold futures rebounded later in the week, supported by new sanctions on Russian entities. The underlying structural drivers of safe-haven demand for precious metals remain intact.
U.S. Equity
  • The S&P 500, Dow Jones, and Nasdaq indices experienced heightened volatility this week as investors digested earnings reports, shifts in trade policy, and the anticipated release of the CPI inflation report. Earlier in the week, U.S. markets gained ground following mixed earnings results. However, the breakdown in U.S.-Russia negotiations and the possibility of new restrictions on software exports to China led to a midweek decline. Markets rebounded later in the week as additional earnings reports were released.
  • The U.S. Bureau of Labor Statistics (BLS) reported a softer-than-expected Consumer Price Index (CPI) inflation rate of 3% for September. Markets now anticipate a potential rate cut at next week’s Federal Reserve meeting.
  • The U.S. Supreme Court is facing funding constraints, and essential personnel such as law enforcement officers and air traffic controllers are being required to work without pay, as the federal government shutdown entered its fourth week.
  • Intel reported a better-than-expected third quarter earnings per share (EPS) of $0.23, supported by a 3% revenue increase to $13.7 billion. The company has raised its fourth-quarter revenue forecast to a range of $12.8 billion to $13.8 billion.
  • Procter & Gamble reported a stronger-than-expected adjusted EPS of $1.99 and a 3% increase in sales, reaching $22.39 billion for the fiscal first quarter of 2026.
  • Tesla posted a lower-than-expected third-quarter EPS of $0.50, despite reporting higher-than-estimated revenue of $28.10 billion and free cash flow of $3.99 billion.
  • Netflix’s third-quarter earnings fell short of expectations, with an EPS of $5.87 on revenue of $11.51 billion. The earnings miss was attributed to expenses related to a Brazilian tax dispute.
  • American Airlines posted a smaller-than-expected adjusted quarterly loss of $0.17 per share, on a 0.3% increase in revenue to $13.69 billion.
  • West Pharmaceutical Services’ stock rallied after the company reported an adjusted EPS of $1.96 for the third quarter, supported by a 5% revenue increase to $805 million.
  • IBM reported lower-than-expected third-quarter software revenue of $7.21 billion, with total revenue reaching $16.33 billion, and an adjusted EPS of $2.65.
  • Intuitive Surgical posted a better-than-expected third quarter adjusted EPS of $2.40, driven by 23% revenue growth to $2.51 billion. The company also revised its full-year revenue growth outlook upward to a range of 17% to 17.5%.
  • Barclays’ stock surged following the announcement of a $670 million share buyback program and an upward revision of its full-year profit and performance targets.
Fixed Income
  • The Bloomberg U.S. Aggregate Bond Index declined slightly over the week.
  • The U.S. 10-year Treasury yield declined to 3.989%. On the other hand, the yield on the 2-year note rose to 482% over the week.
  • The U.S. Dollar Index rose this week to 98.91 initially rising due to the U.S.-China trade tensions and later settling down after September’s CPI inflation was lower-than-expected.

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October 17, 2025

Volatility continues to dominate as Fed reaffirms its dovish stance

This week global equity markets were volatile, in a slight recovery from the resumption of the U.S.-China frictions in the previous week. In a sequence of earnings reports, large U.S. banks have posted significantly higher revenues and earnings in the third quarter. However, credit risks in the banking sector weighed on market returns later in the week. Federal Reserve Chair Jerome Powell signaled further rate cuts justified by labour market weakness. The Fed is also likely to pause its quantitative tightening measures.

In global geopolitics, President Trump and President Putin had a two-hour long phone call to discuss the Ukraine war, ahead of their meeting in Budapest. Nine high ranking generals were arrested by China for undisclosed reasons. Japan’s lower house scheduled the parliamentary vote to select the next prime minister of Japan on October 21st. President Trump proposed the possibility of an intervention in Gaza to disarm Hamas.

Global Updates
  • The MSCI All Country World Index rose over the week, despite exhibiting volatility. Third quarter earnings and resumption of China-U.S. frictions weighed on U.S. and international markets. 
  • ASML reported net sales of €7.5 billion in the third quarter, fueled by the demand for AI infrastructure. 
  • TSMC has reported a AI driven 41% jump in its third quarter revenues to $33.2 billion, which netted an EPS of $2.92 for investors. 
  • BOJ Governor Ueda clarified that any hike in the Bank of Japan’s key policy rate would be conditional on growth and inflation.
  • Economic uncertainty has driven gold futures past the $4,300/oz benchmark this week. The U.S. government shutdown and U.S.-China frictions have increased the perceived economic and market uncertainty. 
  • Nestle stock rose after the company announced its plans to cut 16,000 jobs. The company aims to improve operational efficiency and raise profitability. 
  • South Korea’s Kospi index rose to record highs on expectations of success in trade talks with the U.S. 
  • Oil prices are headed for a weekly loss due to the current oversupply in markets and the possibility of peace in Ukraine. The International Energy Agency has also projected a supply glut in 2026 based on increased crude inventories in the U.S. and China.
U.S. Equity
  • The S&P 500, Dow Jones and Nasdaq indices exhibited volatility. Earlier in the week the U.S. markets recovered slightly from the U.S.-China frictions which had developed in the previous week. The president had reacted to China’s restrictions on rare earth exports to the U.S., with the threat of further tariffs.  The expectations for a rate cut in the near future also rose after Federal Reserve Chair Jerome Powell indicated that weakness in the labour market could lead to further interest rate cuts. The Fed is also considering pausing its quantitative tightening measures.
  • In the three weeks of the U.S. government shutdown major economic reports have not been collected and published, which is likely to result in a time-gap in the official statistics. 
  • Goldman Sachs Group has posted $4.10 billion in third quarter earnings on a revenue of $15.18 billion.
  • JPMorgan Chase has reported a 9% growth in its third quarter revenue of $47.12 billion and 12% jump in profits to $14.39 billion. 
  • Zions Bancorporation announced that it will be taking a provision of $60 million and a $50 million charge-off in the third quarter, to manage defaults by two of its borrowers. Alliance Bancorp also announced a lawsuit for fraud against a borrower. Western Alliance Bancorp also announced their exposure to the same borrowers
  • Novo Nordisk, Eli Lilly stock price fell after President Trump commented on the pricing of their GLP-1 weight loss drugs.. 
  • Walmart has announced a collaboration with OpenAI to facilitate an improved retail experience for customers. 
  • Salesforce has projected an annual growth exceeding 10% in the next five years, driven by the demand for its Agentforce software. The company’s revenue is expected to be higher than $60 billion in 2030.
  • The Artificial Intelligence Infrastructure Partnership (AIP), which includes BlackRock, MGX, Microsoft and Nvidia, has agreed to a $40 billion deal for acquiring Aligned Data Centers from Macquarie Asset Management.
Fixed Income
  • The Bloomberg U.S. Aggregate Bond Index rose over the week.
  • The U.S. 10-year Treasury yield dropped to 3.976% and the yield on the 2-year note dropped to 3.426% over the week, on expectations of a rate cut. 
  • The U.S. Dollar Index recovered this week to depreciate to 98.22, amid U.S.-China trade tensions and expectations of a rate cut.

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