Equities log fourth day of gains ahead of Thanksgiving

General market commentary

US equity markets extended their rally on Wednesday with the S&P 500 rising about 0.7 percent the Nasdaq Composite gaining 0.8 percent and the Dow Jones Industrial Average advancing 0.7 percent as investors grew more confident that the Federal Reserve will cut interest rates in December. Technology shares led the gains with Nvidia rebounding more than 1 percent after recent weakness while Dell benefited from bullish AI server forecasts. Robinhood also surged 11 percent after agreeing to acquire a majority stake in MIAX Derivatives Exchange cementing its position as one of the strongest performers on the day. Trading volumes were light ahead of the Thanksgiving holiday yet sentiment stayed positive with bond yields hovering near monthly lows and gold extending its rise on expectations of monetary easing.

Globally market conditions were similarly upbeat with most Asian and European bourses trading higher supported by improving economic momentum and resilient corporate activity. Non US equities have shown solid performance this year with major markets such as Germany, France, Japan, and the United Kingdom hitting fresh highs helped by strength in technology focused regions including Korea and China. In the United States initial jobless claims fell to a seven month low underscoring a labour market that while cooling remains healthy enough to sustain consumer spending. This mix of steady economic data and rising expectations for rate cuts has bolstered confidence even as investors remain cautious of potential volatility during the shortened post holiday trading session.

Latest market and economic update

Asian equities rose on Thursday, led by gains in South Korea and Japan as technology shares rebounded and expectations grew for a US rate cut next month. Chinese markets also advanced on hopes of further stimulus although property sector turmoil, including sharp losses in China Vanke, limited upside. Hong Kong edged higher but remained weighed down by developers.

Wall Street index futures rose modestly overnight, with S&P 500, Nasdaq 100 and Dow Jones futures each gaining around 0.1%. Trading volumes were thin ahead of the Thanksgiving holiday, while investors remained cautious ahead of key economic data. Technology shares supported after-hours sentiment, sustaining the market’s recent positive momentum.

European equities closed sharply higher on Wednesday, supported by Fed rate cut expectations and hopes of a Ukraine-Russia ceasefire. Technology shares led gains, with ASML up 5.7% and Infineon 3.6%, despite US AI uncertainty. Banks also rose, including Santander, BBVA, Intesa Sanpaolo, and ING, all advancing more than 1.5%, amid a positive Eurozone bond session.

The US dollar retreated against the euro on Thursday, rising to 1.1602 after earlier gains, as markets focused on 2026 and priced in multiple Federal Reserve rate cuts. The decline follows a recent six-month high, with the euro benefiting from thinner holiday trade and renewed optimism in Europe, suggesting the dollar may face continued pressure.

Oil prices fell in Asian trade this morning after US crude stocks rose far above expectations, with Brent down 0.25% at $62.84 and WTI slipping 0.4% to $58.40 per barrel. Gains from Wednesday were capped by the surprise inventory build, while prospects of a US-backed Russia-Ukraine peace plan raised the possibility of increased Russian supply, keeping markets cautious.

Equities on the move

The following companies experienced moves in their share price driven by analyst ratings, quarterly earnings, or other news:

Chinese sportswear firm ANTA Sports is reportedly exploring a potential takeover of German brand Puma, possibly with a private equity partner. Rival bidders could include Li Ning and Japan’s Asics. Talks remain preliminary, with valuation expectations from Puma’s largest shareholder, the Pinault family, posing a hurdle as the company seeks to revive sales under CEO Arthur Hoeld.

ServiceNow is in advanced talks to acquire five-year-old security startup Veza for over $1 billion, aiming to strengthen its AI-powered enterprise and security offerings. Veza provides identity-security software controlling user and AI agent access to sensitive data. The deal follows a funding round valuing Veza at $808 million amid rising concerns over AI-driven cyber risks.

The Pentagon has recommended adding Alibaba, Baidu and BYD, along with five other companies, to its Section 1260H list of Chinese firms linked to the military. While inclusion does not impose immediate bans, it could damage reputations and warn US and global firms of risks. Following the report, Alibaba fell around 2.2% and Baidu and BYD about 1% each in Asian trade today.

Nvidia has mounted a defence of its $4.5 trillion valuation against critics including Michael Burry, rebutting claims of inventory build-ups and accounting concerns while acknowledging lower margins on its complex Blackwell chips. The campaign follows reports of Meta considering Google AI chips, prompting Nvidia to emphasise that its technology remains a generation ahead of rivals.

Deere & Co warned of higher tariff impacts in 2026, forecasting annual net income of $4.00–$4.75 billion, below analysts’ $5.33 billion estimate. Weaker margins on large tractors and delayed farm equipment purchases hit profits, sending shares down 5%. Quarterly net income fell to $1.06 billion, though revenue rose 11% to $12.4 billion.

Analysts at Deutsche Bank and HSBC defended Oracle amid concerns over AI infrastructure costs and OpenAI exposure. Deutsche Bank said even a worst-case scenario implies only modest EPS and free cash flow hits, while HSBC highlighted strong AI margins and management’s planning. Both maintained positive outlooks, with HSBC seeing potential upside of 92%.

Morgan Stanley named ASML its “Top Pick” in European semiconductors, raising its price target to €1,000, citing strong memory and logic demand and resilient margins into 2026. Solid DRAM transitions, higher EUV sales, and AI-related spending support growth, despite a China slowdown. Shares rose 2.7%, with analysts seeing current weakness as a buying opportunity.

JPMorgan remains bullish on Amazon, citing the strongest AWS quarter in nearly three years and a clear AI infrastructure roadmap. Despite a 10% share pullback, AWS backlog rose 22% year-on-year, with Trainium 2 revenue up 150%. Key catalysts include Trainium 3, Project Rainier, and a $38 billion OpenAI deal, supporting accelerated 2026 growth.

Goldman Sachs upgraded L’Oréal to Buy, citing strong momentum in its luxury division, L’Oréal Luxe, ahead of next year’s capital markets day. Analysts highlighted robust growth in fragrances, especially in China and the U.S., and underlined the company’s global leadership in luxury beauty. Earnings forecasts for 2026–27 were raised, with the recent P/E derating a buying opportunity.

UBS downgraded Shell to “neutral” from “buy,” cutting its 12-month price target to 3,000p, citing stretched valuations, slower buybacks, and medium-term production and LNG price risks. Despite strong cash flow and a defensive position, Shell faces lower growth allocation, a potential 500kboe/d production gap by 2035, and reduced EPS forecasts for 2026–28.

UBS upgraded DHL to Neutral, citing stabilising peak-season volumes after weak quarters. Improved air-cargo trends, letter mail volumes, and one-off benefits lifted 2025–26 EBIT estimates. Despite medium-term headwinds and regulatory risks, sequential improvements in Express weights and cost execution support the outlook, with a raised price target of €42.5.

BofA Securities sees the recent pullback in European defense shares as a buying opportunity, following a sector de-rating from peak valuations. Trading at 11.6x EV/EBIT for 2028, the brokerage expects strong fundamentals, with 12.5% organic growth, margin expansion, and EPS CAGR of 20% through 2030, underpinned by NATO-driven defense budget increases.

JPMorgan forecasts strong U.S. equity gains in 2026, projecting the S&P 500 at 7,500 with 13–15% earnings growth, driven by AI investment, robust capex, and a resilient economy. Further Fed rate cuts could push the index above 8,000. The bank notes risks from high valuations, AI disruption, and economic polarisation but highlights underappreciated productivity gains.

Bank of America expects modest U.S. equity gains in 2026, forecasting the S&P 500 at 7,100, implying a 5% return despite 14% earnings growth. Liquidity tailwinds are fading, and AI monetisation remains uncertain. The bank predicts a market shift to capex-driven sectors, favouring Staples over Discretionary, with a broad S&P 500 range of 5,500–8,500.

Deutsche Bank raised its 2026 gold forecast to $4,450 an ounce, citing stabilising investor flows and strong central bank demand, with a projected range of $3,950–$4,950. ETF investment and ongoing undersupply in precious metals support prices. Spot gold has risen 59% this year, approaching its highest annual gain since 1979, with record $4,381.21 levels in October.

Upcoming data and events

Key U.S. economic data today include Building Permits, New Home Sales, retail inventories, personal spending, corporate profits, and wholesale trade and inventories. Earnings before the open feature Walmart, Target and Ross Stores, while Cisco, Intuit and Workday report after the close, providing insights into consumer and technology demand ahead of the Thanksgiving holiday.

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