Weekly house view

Macroeconomics · 03 Nov 2025

0 min read

The CIO’s view of the week ahead.

The week in review

The Federal Reserve lowered interest rates by 25 basis points last week with a “hawkish cut”, signaling resistance to a further reduction in December. The market adjusted by pricing out nearly 10 basis points of cuts. Division exists among Fed policymakers, but weak unemployment data may lead to a December cut.

The S&P 500^[i] rose 0.7% (in USD) on the week, buoyed by robust corporate results. Around 60% of S&P 500 companies have now reported third quarter earnings, with 68% exceeding EPS expectations and a similar percentage beating sales forecasts.

All the “Magnificent Seven” except Nvidia (reporting on 19 November) have reported, with solid results overall, though Tesla and Meta missed EPS expectations. Meta’s plan for a USD 25 bn bond sale shows how some tech giants are turning to the debt markets as they spend record sums to build AI infrastructure. Diverging corporate fortunes highlight divisions in the US economy, with Chipotle Mexican Grill lowering sales guidance on reduced dining frequency among lower income guests, while Apple had a positive outlook on the rollout of its new iPhone.

In Europe, 45% of STOXX 600 companies have reported, with over 50% beating EPS expectations.

In politics, President Donald Trump and Xi Jinping, China’s president, agreed a one-year trade truce. China’s commitment on buying US soybeans marked a reversion to its pre-trade war position.

Quote of the week

“A further reduction in the policy rate at the December meeting is not a foregone conclusion,” Fed Chairman Jerome Powell said after last week’s cut. “What do you do when you are driving in the fog? You slow down,” he said, nodding to a government shutdown that has left the Fed without some data.

Key data

Euro area GDP growth slightly outperformed expectations, rising 0.2% quarter-on-quarter in the third quarter, up from 0.1% in the second quarter. Euro area private sector credit growth was steady at 2.8% in September. Germany’s Ifo business morale index rose in October on firmer expectations. China’s official PMI index fell more than expected to 49.0 in October.

[i] Source: Pictet WM AA&MR, Thomson Reuters. Past performance, S&P 500 Composite (net 12-month return in USD): 2020, 18.4%; 2021, 28.7%; 2022, -18.1%; 2023, 26.3%; 2024, 25%.

For illustrative purposes only. This page may contain information about financial instruments or issuers but does not set out any direct or implied recommendation whatsoever (either general or personalised).