Weekly house view | Thanksgiving ultimatum
The week in review
The Trump administration issued Ukraine with an ultimatum to sign a peace deal by Thanksgiving on Thursday, triggering concern in Europe at a 28-point plan that envisages major concessions by Kyiv to end the war with Russia.
In markets, Nvidia reported stronger-than-expected revenues, yet investors are concerned about client concentration as four of its customers now account for 60% of sales. Tech valuation concerns persisted in a volatile week for markets that was also marked by mixed US jobs data. A plunge in Bitcoin highlighted deleveraging, which needs to stop to stabilise the market.
The S&P 5001 ended the week 1.9% lower (in USD). US Treasury yields fell close to 4.0% amid risk-off sentiment. The US added 119,000 jobs in September, with unemployment edging up to 4.4%. The readout is unlikely to shift the views of Federal Reserve doves or hawks much before their December meeting, though New York Fed President John Williams saw room for “further adjustment” to rates.
In Japan, a JPY 17 trillion stimulus package raised concerns over deficits and Japanese government bond (JGB) issuance, with the 10-year JGB yield at its highest since 2008 (1.80%) – hitting the same level as its Chinese equivalent.
Geopolitics
The US and Ukraine reported progress on ending the war with Russia. “I feel very optimistic that we’re going to get there in a very reasonable period of time,” US Secretary of State Marco Rubio said after talks in Geneva.
Key data
In the US, rising unemployment claims indicate job seekers are having a challenging time finding work. Increased labour force participation also contributed to the higher unemployment rate. The S&P Global US services PMI increased in November, slightly above expectations.
In the UK, October CPI eased to 3.6% year-on-year. Retail sales fell by 1.1% on the month in October. Swiss GDP shrank by 0.5% in the third quarter, more than expected.