Senate nears deal to end the government shutdown

General market commentary

Equity markets ended Friday mostly higher, with the Dow Jones Industrial Average and S&P 500 posting modest gains, while the Nasdaq Composite slipped 0.2%, dragged down by weakness in growth-oriented sectors such as technology and communication services. Outside the tech space, sectors including energy, materials, and consumer staples led the advance, each gaining over 1% on the day. Bond yields were largely unchanged, with the 10-year US Treasury yield hovering around 4.1%. Investor sentiment was dampened by softer consumer confidence data, with the University of Michigan’s index falling to 50.3 in November, alongside an uptick in one-year inflation expectations to 4.7%. Meanwhile, reports that the US government would block Nvidia from selling certain AI chips to China added further pressure to the technology sector.

Over the course of the week, the S&P 500 declined by 1.6%, led lower by technology equities, though it remains up more than 14% year to date. The Nasdaq also registered losses as concerns over elevated valuations and the ongoing US government shutdown weighed on sentiment. With federal economic data releases suspended, investors relied on private indicators, which painted a mixed but broadly stable picture. The ISM Services PMI rose to 52.4, signalling resilience in the services sector, while the ADP employment report showed modest job growth. Despite short term volatility, many market participants view the recent pullback as a temporary correction rather than the start of a deeper downturn, noting that supportive monetary policy and solid underlying economic fundamentals continue to underpin the longer term outlook.

Latest market and economic update

Asian equity markets were mixed on Monday, with Japan’s Nikkei 225 up 1.2% and South Korea’s KOSPI jumping 2.8% on a strong rebound in technology shares. Hong Kong’s Hang Seng gained 0.3%, while China’s indexes lagged despite slightly better inflation data. Australia’s ASX 200 rose 0.7%, and Singapore’s Straits Times fell 0.8% overall.

U.S. equity futures rose sharply overnight after the Senate advanced a spending bill to end the country’s longest government shutdown. S&P 500 Futures gained 0.7%, Nasdaq 100 Futures jumped 1.2%, and Dow Futures rose 0.2%. The rebound followed last week’s tech-led selloff amid AI bubble fears and uncertainty over future Fed rate cuts.

European shares fell on Friday, with Germany’s DAX down 0.8%, France’s CAC 40 down 0.2%, and the U.K.’s FTSE 100 down 0.6%, marking weekly losses amid concerns over high valuations. Key movers included Daimler Truck, which reported a 40% profit drop, Arkema, which lowered full-year guidance, and ITV, which announced talks to sell its media division.

The U.S. dollar remained steady on Monday, supported by investor focus on progress towards ending the longest-ever government shutdown. The dollar index and futures rose around 0.1%. Against the euro, the dollar held firm, with EUR/USD quoted around 1.1557, reflecting caution over a potential U.S. rate cut and ongoing uncertainty from the prolonged shutdown.

Oil prices rose in Asia this morning, supported by hopes that a U.S. government shutdown’s end will boost demand. Brent and WTI crude both gained 0.7%, aided by bargain buying and positive Chinese inflation data. Markets also await OPEC and IEA reports, while concerns linger over a global supply glut and weakening demand.

Late on Sunday, U.S. lawmakers advanced a bill to end the nation’s longest government shutdown, with the Senate voting 60-40 to move the measure forward. Eight Democrats backed a Republican deal on healthcare subsidies and restoring furloughed federal workers. The shutdown, now in its 40th day, has disrupted services, including air travel, and cost tens of billions in GDP.

Russian Foreign Minister Sergei Lavrov said he is willing to meet U.S. Secretary of State Marco Rubio but stressed Russia will not compromise on core demands, including Kyiv renouncing NATO membership and withdrawing from Russian-claimed regions. He also warned against seizing frozen Russian assets and confirmed U.S. talks on extending New START limits.

China’s consumer price index rose 0.2% year-on-year in October, supported by Golden Week spending and key shopping events, marking the first positive CPI reading since June. Producer prices fell 2.1%, extending factory gate deflation to 37 months. Despite the slight CPI pick-up, weak output prices, economic uncertainty, and trade tensions with the U.S. persist.

Equities on the move

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

UBS forecasts global capital spending on artificial intelligence to exceed $500 billion by 2026, rising to $1.3 trillion by 2030, supported by strong demand for computing power. The bank cited major deals from OpenAI, Amazon, and Microsoft as evidence of accelerating momentum, adding that AI-related equities are likely to drive markets and warrant increased investor exposure.

Nvidia CEO Jensen Huang said demand for its Blackwell chips is “very strong,” driving increased wafer orders from TSMC. Memory supplies from SK Hynix, Samsung, and Micron are scaling to meet growth amid the AI boom. Huang confirmed no active discussions exist to sell Blackwell chips to China due to U.S. export restrictions.

Pfizer won a $10 billion bidding war for obesity drug developer Metsera, outpacing Novo Nordisk after Metsera cited U.S. antitrust risks in Novo’s offer. The deal, offering $86.25 per share, gives Pfizer entry into the growing obesity market despite Metsera’s drugs still being years from approval, while Novo focuses on its own pipeline and future acquisitions.

Meta Platforms plans to invest $600 billion in U.S. infrastructure and jobs over three years, focusing on AI data centres to support its superintelligence ambitions. CEO Mark Zuckerberg aims to front-load compute capacity for future AI growth. Recent projects include $27 billion for a Louisiana centre and $1.5 billion for a Texas facility.

Siemens plans to distribute a significant portion of its €35 billion stake in Siemens Healthineers directly to shareholders as a dividend in kind. The move would allow Siemens to largely exit the medical equipment business while benefiting investors, with preliminary tax discussions indicating the spinoff would not create a substantial tax burden.

Visa and Mastercard are close to a settlement with merchants, reducing interchange fees by around 0.1 percentage points and allowing more flexibility in rejecting certain cards, the Wall Street Journal reported. The deal, aimed at resolving a legal dispute dating back to 2005, would also address card acceptance categories, surcharging, and anti-steering rules.

The U.S. Army plans to acquire at least one million drones over the next two to three years, aiming to treat them as expendable rather than high-value equipment. Secretary Daniel Driscoll highlighted boosting domestic production, drawing lessons from the Ukraine war, and partnering with commercial drone manufacturers to ensure a robust, scalable supply chain for future conflicts.

Peloton shares jumped over 14% on Friday after the company beat quarterly revenue estimates, driven by early traction from its revamped product lineup and price hikes on hardware and subscriptions. Under CEO Peter Stern, Peloton is focusing on profitability, free cash flow, and brand repositioning, reinforcing investor confidence in its turnaround strategy.

Amadeus IT Group exceeded Q3 expectations, with revenues 1% and EBITDA 3% above consensus. Overall growth reached 8.6%, led by strong performance across Air IT, Air Distribution, and Hospitality segments. The company maintained full-year 2025 guidance, targeting the lower end of its 7.4-11.4% growth range, while highlighting the need for Hospitality to accelerate.

German defence electronics firm Hensoldt AG reported Q3 results with EBITDA 5% above consensus, driven by strong margins in Sensors and 32% sales growth in Optronics. Group margins rose to 17.6%, with free cash flow of €62 million. Full-year guidance maintained, supported by key contracts, including P-8 Poseidon (€130m) and SAGIR II (€80m).

Daimler Truck reported a 40% drop in third-quarter operating profit, with full-year earnings expected at the lower end of its forecast due to weak North American demand and U.S. tariffs. European orders remained strong, while Mercedes-Benz Trucks missed EBIT expectations. The company reaffirmed 2030 carbon targets but cited infrastructure and stimulus challenges.

Rothschild & Co Redburn upgraded ASML to “buy” with a €1,200 target, citing strong prospects for its HNA EUV lithography technology. Improved field stitching, rising AI chiplet adoption, and a broadening customer base support higher 2026-30 earnings, with HNA revenue expected to grow from €2.3 billion to €6 billion by 2030.

Carnival’s investor day reassured Stifel that booking and pricing trends remain strong despite Caribbean capacity concerns. Management conveyed optimism on demand through 2027, while fears of oversupply appeared unfounded. Stifel maintained its Buy rating on Carnival shares with a $38 target, noting that new long-term financial targets in early 2026 could act as a catalyst.

Bernstein downgraded DHL to “market-perform” from “outperform,” citing muted trade recovery and limited near-term catalysts despite strong cost control. Fiscal 2025-26 earnings and margins are projected to rise, with Express as the main profit driver. Shares have gained 26% year-to-date, but further upside depends on a stronger macroeconomic recovery.

Upcoming data and events

This week, focus is on U.S. private data amid the shutdown, UK GDP and labour updates, Eurozone industrial production, and China and Japan economic releases. Earnings highlights include Cisco, Disney, Applied Materials, Tencent, Alibaba, Softbank, Sony, Siemens, Munich Re, and Allianz.

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