Equities steady but on track for monthly drop

General market commentary

Global equity markets rose on Thursday as investor optimism strengthened, driven by expectations of a Federal Reserve rate cut next month and renewed confidence in artificial intelligence, which has been supporting technology shares. U.S. markets were closed on Thursday for the Thanksgiving holiday. Today, Wall Street will open for a truncated session from 9:30 am to 1:00 pm US time, with the holiday providing Americans a perfect excuse to bridge to the weekend, typically resulting in subdued trading. Despite the holiday lull, investors remained focused on broader macroeconomic signals and the potential impact of AI on corporate earnings. The recent positive sentiment in the U.S. helped underpin equity markets globally, while attention remained on the Fed’s upcoming policy decisions and economic momentum.

Latest market and economic update

Asian equities slipped as tech’s rebound faded and China’s property-sector worries deepened, with Vanke’s bond slump weighing on sentiment. Japanese markets were flat as firm data fuelled bets on a BOJ rate rise. Most Asian indices posted November losses, while India and Singapore outperformed due to lower tech exposure and supportive economic conditions.

Wall Street futures inched higher in thin Thanksgiving trade, supported by strong bets on a December Fed rate cut and speculation over a more dovish successor to Jerome Powell. Tech shares recovered despite mixed performances. Markets now await key PCE and PMI data, though November remains negative overall after a steep tech-driven selloff.

European shares ended mixed on Thursday, with the STOXX 50 flat at 5,655 and STOXX 600 slightly higher at 575, supported by expectations of a US Fed rate cut and hopes for a Ukraine-Russia ceasefire. Banks outperformed, led by BNP Paribas (+1.5%) and ING (+0.5%), while tech equities remained volatile, with ASML and Prosus down over 2% and Infineon up 2.6%.

The dollar headed for its worst week since July as expectations of a December Fed rate cut surged, despite a slight rebound on Friday. The euro held steady around $1.1600, showing little movement against the weakening greenback. Softer U.S. yields and thin holiday trading further pressured the dollar’s performance.

Oil prices were steady as markets weighed a US-backed Ukraine peace framework and awaited the OPEC+ meeting, which is expected to keep output unchanged. Brent held near $63 and WTI rose slightly, with both on track for weekly gains. Hopes of a US rate cut and reduced geopolitical risk also lent mild support.

ECB minutes from the October 29–30 meeting show policymakers agreed that keeping interest rates unchanged is appropriate amid uncertainty. The Governing Council cited a resilient economy and inflation near target, noting the 2% deposit rate is sufficient. While some see the rate-cutting cycle as ending, others favoured retaining flexibility for future policy adjustments.

Equities on the move

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

Ferrari Group reported a 3.5% rise in Q3 revenue to €83.8m, with organic growth accelerating to 6.1%, despite a 12% decline in Asia. Europe, the Americas, and the UAE saw gains. Full-year 2025 guidance was confirmed, with EBITDA margin at 26.5%. Jefferies highlighted mid-term goals of 6%-8% annual growth and margin expansion to 27%-29%.

Forvia is attracting attention as binding offers for its Interior division could reach €1.8–2 billion, above prior expectations. Potential bidders include private equity firms Atlas and Apollo, and China’s CITIC. The sale aims to reduce Forvia’s €7.7bn debt and is viewed positively by analysts, potentially strengthening the company’s balance sheet ahead of its February strategic update.

Bank of America analysts note investors are pricing a “goldilocks” global economy, with high asset valuations and converging rate curves, but warn of two-way risks. AI-driven growth is boosting equities amid a K-shaped recovery, while volatility may rise as AI’s economic impact becomes clearer. They suggest trades in gold, euro, and yen amid gradual dollar diversification.

Deutsche Bank analysts predict the U.S. dollar will weaken further in 2026, though more gradually than in 2025, following a 6% decline this year. Factors include trade, debt concerns, and monetary policy. AI-driven productivity and capital investment pose two-sided risks, while potential Federal Reserve leadership changes could also influence dollar strength and volatility.

UBS upgraded EssilorLuxottica to “buy” on strong smartglasses growth and 10.1% projected 2026 sales, highlighting market potential, while downgrading Prada to “neutral” due to slower margin growth, softer sales, rising competition, and uncertainty from the $1.38bn Versace acquisition, reflecting cautious outlook on luxury sector performance.

Upcoming data and events

Today’s main economic releases include preliminary inflation data from France, Italy, and Germany, GDP updates from India and Canada, and the U.S. Federal Reserve’s weekly balance sheet, providing insights into global inflation, economic growth, and banking-system liquidity.

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