Weekly house view | Nvidia to the rescue?
The week in review
President Donald Trump signed a spending bill last week to end the longest-ever US government shutdown, lending some support to equities in a choppy week. Market concerns that the Federal Reserve may not cut interest rates in December and tech sector jitters fed the volatility. The S&P 5001 rose 0.1% (in USD) on the week. Ending the shutdown, Congress passed a full-year budget for three departments and extended funding for other agencies until 30 January 2026. The Congressional Budget Office estimates the shutdown will reduce fourth quarter GDP by 1.5% but boost first quarter 2026 GDP by 2.2%. A rise in the number of Americans falling behind on their car payments was the latest evidence that lower-income US households are struggling. With the mid-term elections looming, Trump floated the idea of possible 50-year mortgages to reactivate the housing market and proposed sending Americans USD 2,000 cheques funded by tariff revenue. The US agreed to lower Swiss tariffs from 39% to 15%. The announcement, which aligns Swiss tariffs with those applied to the European Union, provides a welcome reprieve for Swiss exporters and will remove the potential 0.5% negative impact on Swiss growth. Switzerland committed to invest USD 200 billion in the US, which looks a stretch. Elsewhere, Fitch upgraded Greece to BBB; outlook stable. S&P upgraded South Africa for the first time in nearly 20 years.
Quote of the week
“My administration and our partners in Congress will continue our work to lower the cost of living, restore public safety, grow our economy and make America affordable again,” Trump said when ending the shutdown.
Key data
UK unemployment rose to 5%, and payrolled employment declined by 32,000. Third quarter GDP grew by just 0.1% quarter-on-quarter. Fourth-quarter growth is expected to remain weak due to high uncertainty, including potential tax hikes. Dovish Bank of England members may gain influence at the December meeting, but uncertainty surrounds the upcoming budget. In China, industrial production growth slowed much more than expected to 4.9% year-on-year in October. Retail sales growth slowed to 2.9% year-on-year in October from 3.0% in September, above expectations.