Research Archive

Equity Markets: Equities traded higher yesterday, after further evidence of a weaker US labour market, increased confidence that the Federal Reserve will move to cut rates at its last meeting of 2025. The S&P500 and Nasdaq rose +0.30% and +0.17% respectively. Europe rose +0.10%. In the US, nine sectors were in positive territory with 67% of stocks ending higher. Energy (+1.83%) and Financials (+1.27%) were best, while IT (-0.42%) and Utilities (-0.32%) were weakest. Microsoft fell (-2.5%) following a report indicating weaker demand for certain AI tools, even though the company said overall sales targets for its AI products remain unchanged. In Europe, six sectors were in positive territory with 40% of stocks ending higher. IT (+1.30%) and Energy (+1.01%) were best, while Financials (-0.99%) and Real Estate (-0.63%) were worst. ASML rose (2.59%) after another broker signalled it as its top choice in the sector and one of its leading picks looking ahead to 2026.

Macro: In macro news yesterday, in the US, MBA Mortgage Applications fell 1.4% in the week of 28 Nov, following a 0.2% rise in the previous week. ADP data showed that U.S. companies cut jobs in November at the fastest pace since early 2023. Meanwhile, Industrial and Manufacturing Production were in line at 0.1% MoM and 0.0% MoM, and Capacity Utilisation was below estimates and flat with a revised down prior month at 75.9% (est. 77.2%, prior 77.4% to 75.9%). Unlike in Europe, the US Services and Composite PMI were lower than the prior reading at 54.1 and 54.2 respectively. Finally, the ISM Services Index rose slightly to 52.6 in November from 52.4, but prices paid was weaker at 65.4 (est 68.0, 70.0 prev.), its lowest level in seven months. In Europe, final composite PMIs were better than expected in France 50.4 (49.9 est), Germany 52.4 (52.1 est) UK 51.2 (50.5) and Eurozone to 52.8 (52.4 est) and increased from the preliminary read. Ireland unemployment rate improved to 4.9% (5.0% prior).Economic releases today include Eurozone Retail Sales (Oct), German Construction PMI (Nov), Irish GDP (3Q F) and Current Account Balance (3Q), UK New Car Registrations (Nov) and Construction PMI (Nov). Then for the US we have Challenger Job Cuts (Nov), and Jobless Claims.

Stock:Rio Tinto: (Overweight, PT 5590p (under review), +1.5% Upside): Update following release of new guidance ahead of Capital Markets Day.

Debt: Bonds were little changed on the day yesterday despite economic data that has probably cemented another rate cut from the Fed next week.