US equities end November with modest gains

General market commentary

US equity markets ended the week on a positive note, with major indices recording modest gains amid light post-holiday trading and subdued volatility. The S&P 500 rose over 3 percent for the week and secured a slight monthly increase, marking its seventh consecutive month of positive returns. On Friday, the Dow Jones Industrial Average gained 0.6 percent, the S&P 500 advanced 0.5 percent and the Nasdaq Composite rose 0.7 percent. Ten of the eleven sectors moved higher on the day, led by energy and consumer discretionary, while healthcare was the only sector to decline. Bond yields edged up slightly, with the ten year US Treasury just above 4 percent and the two year yield around 3.5 percent. Trading volumes were notably thin across exchanges, and the CBOE Volatility Index fell to 16.35.

Market leadership has begun to shift in the fourth quarter following strong early year performance from growth oriented areas such as communication services and information technology. Healthcare has emerged as the best performing sector so far this quarter, followed by communication services and utilities, while value oriented shares have outpaced growth peers more broadly. Although equities have experienced significant swings over the course of 2025, the market has recovered strongly from its April lows, prompting speculation around the potential for a traditional year end rally. Historically, December has been one of the more favourable months for US equities, although fundamentals such as earnings and interest rates remain the primary drivers.

Latest market and economic update

Asian markets were mixed on Monday as China and Hong Kong managed modest gains despite fresh manufacturing weakness, while South Korea and Singapore were flat and Australia slipped. India opened slightly higher. Japan stood out on the downside, with the Nikkei dropping around 2% as a stronger yen and rising yields intensified expectations of a December BOJ rate hike.

U.S. equity futures dipped after last week’s gains as investors assessed rising expectations of a December Fed rate cut and uncertainty over the next Fed chair. Markets now price an 85% chance of a quarter-point move, while Trump’s pending nomination has sharpened focus on how a potentially more dovish leader could influence monetary policy and support equities.

European shares closed slightly higher on Friday, extending weekly gains on optimism over potential Fed easing. The STOXX 50 rose 0.2% to 5,666 and the STOXX 600 added 0.3% to 577. Tech equities led gains with ASML, SAP, Infineon, and Prosus up 0.7–1.5%, while LVMH, Volkswagen, and Stellantis also advanced, supporting broader market momentum.

The dollar started December weaker, pressured by rising expectations of a December Fed rate cut and a dovish potential successor to Chair Powell. It eased to 99.42 against a basket of currencies. The euro gained slightly, up 0.02% to $1.1600, benefiting from dollar weakness, while sterling remained largely unchanged at $1.3240.

Oil prices rose over 1% in Asia after OPEC+ reaffirmed its decision to hold output steady into early 2026 and maintain deep voluntary cuts. Traders also assessed fresh supply risks from rising U.S.–Venezuela tensions and attacks on Russian energy infrastructure, including a drone strike that disrupted crude loadings at the CPC’s Black Sea terminal.

In November, major Asian exporters, China, Japan, South Korea, and Taiwan, saw factory activity decline due to weak demand and trade uncertainty, while emerging markets like Indonesia, Vietnam, and Malaysia reported strong growth, highlighting struggles for exporters with high inventories versus smaller economies benefiting from robust domestic demand and regional trade.

Equities on the move

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

Airbus has informed airlines that emergency repairs to certain A320 jets affected by a major recall may be less extensive than initially expected. While around 6,000 aircraft remain impacted, the number requiring the more time-consuming hardware replacement is smaller than the earlier estimate of 1,000, industry sources said, reducing anticipated disruption for operators.

Intel shares jumped over 10% on Friday after reports it could start manufacturing Apple’s lowest-end M processors by 2027, covering MacBook Air and iPad Pro devices. The potential deal would strengthen Intel’s foundry business and give Apple a second chip source, supporting “Made in USA” objectives. The partnership depends on Intel’s PDK 1.0/1.1 release in early 2026.

UnitedHealth Group has agreed to sell its remaining South American business, Banmedica, to Brazilian private equity firm Patria Investments for $1 billion, completing its exit from the region. Banmedica operates in Colombia and Chile with 1.7 million members. The move supports CEO Stephen Hemsley’s turnaround strategy, following prior losses and challenges in the region.

Deutsche Börse is in exclusive talks to acquire Allfunds Group, aiming to combine it with its fund services segment. The non-binding proposal values Allfunds at €8.80 per share, split between cash and Deutsche Börse shares, plus dividends. The deal seeks to create a pan-European fund ecosystem, reduce fragmentation, and deliver operational efficiencies and cost synergies.

Banca MPS faces selling pressure after its CEO and two major shareholders were investigated over the Mediobanca takeover, raising governance concerns. Despite improved financials, strong capital ratios, and rising revenues, the inquiries add execution risk during integration. Kepler Cheuvreux maintains a “hold” rating, with shares trading near €8.73, down 8.3% from target.

Bernstein analysts remain bullish on Microsoft, citing strong Azure demand, differentiated AI capabilities, promising O365 Copilot progress and healthy expected AI margins. They argue concerns are overstated and view the recent share pullback as a buying opportunity. The firm reiterates an Outperform rating and a $645 price target.

J.P. Morgan upgraded Moncler to “overweight” on 2026 demand recovery, and Ferragamo to “neutral” amid improving sales and online engagement. Burberry was downgraded to “underweight” due to weakening traffic and execution risks. The brokerage expects 2026 to mark luxury sector stabilisation with widening performance gaps across brands.

J.P. Morgan sees 2026 as a consolidation year for European telecoms, with M&A supporting gains. Orange, Bouygues, SES, BT, Deutsche Telekom, Telia, Proximus, Tele2, and Sinch are rated Overweight, while KPN, Telenor, Sunrise, Telefonica, Vodafone, Swisscom, and NOS face revenue and cash flow pressures, earning Neutral or Underweight ratings.

Bernstein upgraded easyJet to Outperform with a £5.60 target, citing tight European aviation supply and rising demand lifting fares. Despite lower margins than Ryanair, easyJet trades at a historic discount, with upside from fleet renewal and easyJet Holidays. Analysts expect EPS growth of 22% over two years and 40% over five, offering a cheap sector exposure.

Yardeni Research expects 2026 to continue the “Roaring 2020s,” driven by productivity gains, strong earnings, and resilient consumer demand. U.S. GDP is forecast to rise 3%, productivity 2.5%, and S&P 500 earnings to $310. Technological advances in AI, biotech, and robotics underpin growth, with the S&P 500 projected to reach 10,000 by 2029.

Deutsche Bank sees German equities as undervalued, with low positioning and supportive fiscal reforms boosting corporate margins. The 2026 budget, energy subsidies, and infrastructure spending improve the outlook. The bank expects a “second leg up,” viewing current pessimism as overdone and Germany as one of Europe’s most attractive entry points.

Upcoming data and events

Key US economic data to be released today include the final November S&P Global Manufacturing PMI, ISM Manufacturing PMI along with employment, prices, and new orders. Construction spending for September and October will also be reported. Treasury auctions cover three- and six-month bills, while Fed Chair Powell is scheduled to deliver a speech, drawing market attention.

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