Global Markets Mixed as Shutdown Nears End | Tech Concentration & UK Rate Cut Bets in Focus

Market & Macro Summary – 12 November 2025

Global Markets Overview

• US: President Trump said tariffs on coffee imports will be lowered, signaling a modest easing of trade restrictions.
• Asia: Chinese President Xi reaffirmed partnership with Spain, stressing trust and deeper cooperation.
• Crypto: Bitcoin traded choppy around USD 103 k amid reduced volatility.
• Australia: RBA Deputy Governor Hauser said policy remains “restrictive” but is under debate; consumption recovery is “gradual,” and no unemployment level is yet satisfactory.

Equities & Sector Themes

Technology Concentration – S&P 500

• Tech dominance deepens: IT now makes up ≈ 36 % of the S&P 500, 23 ppt above Financials, and nearly 50 % if broader tech names are included.
• AI dependence: The index’s performance is increasingly tied to the AI cycle, amplifying potential downside if sentiment fades.
• Earnings power: Tech expected to generate ~25 % of Q3 S&P 500 profits, likely rising further. High self-funding capacity from internal cash flow remains a stabilising factor.

European Energy Stocks

• Up 18 % YTD in EUR (+32 % in USD) despite a 15 % oil price drop — a historical decoupling.
• Analysts see parallels to the early 1990s: efficiency and payout discipline supporting returns amid weak oil prices.
• Caution: 2026 profit forecasts cut ~15 %, valuations stretched; sustained outperformance unlikely if oil oversupply persists.

DAX Technical analysis 4 H

The Germany 40 CFD (4H) has broken higher from its recent consolidation, reclaiming both the 50 EMA (24,020) and 200 EMA (24,070) with strong momentum. The index is now testing the 24,510 resistance area — a key level that has repeatedly capped rallies. The MACD shows a bullish crossover with expanding histogram bars, while the RSI (68) approaches overbought territory, reflecting strong short-term buying pressure.

If price closes above 24,510, a breakout toward the all-time high (24,774) becomes likely. Failure to clear resistance could lead to consolidation back toward 24,200–24,050 support. As long as price holds above 24,000, the bullish structure remains intact. Tone: bullish breakout attempt, with momentum favoring continuation if 24,510 gives way.

France – Corporate Tax Plan

• National Assembly approved measures raising corporate tax for large firms.
• Up to 30 % of CAC 40 could see earnings fall ≥ 5 %; French banks’ profits –3 % expected.
• CAC 40’s valuation premium vs. STOXX 600 at rare extremes (~97th percentile).
• Political risk from higher taxes not yet fully priced.

UK Markets – Rate Expectations & Divergence

• Jobless rate: 5.0 % (Jul–Sep), higher than forecast; employment down –32 k in Oct.
• Wages: +4.2 % YoY (slower than BoE’s projection).
• Market reaction: 10y gilt yields fell, equities rose, GBP weakened across G10.
• Futures imply ~90 % chance of BoE rate cut on 18 Dec.
• FTSE 100 +15 % YTD (in EUR), beating S&P 500 (+6 %). FTSE 250 +2.5 %, near 12-year low vs. FTSE 100.
  • Large caps benefit from global exposure and buybacks; mid-caps hurt by UK stagnation and high rates.

Corporate & Technology Developments

Company	Key Update	Implication
AstraZeneca	Hit new record high; now UK’s largest listed firm.	Pharma strength driving FTSE defensives.
Richemont & Swatch	Gained on prospects of US–Switzerland tariff cut (to 15 % from 39 %).	Boost for Swiss luxury exports.
SoftBank	Sold entire Nvidia stake (USD 5.8 bn) to fund AI push; Q2 profit doubled to JPY 2.5 trn (USD 16.6 bn) on OpenAI valuation gains.	Reinforces Japan’s central role in AI investment.
Nebius Group	Signed USD 3 bn AI-infrastructure deal with Meta; Q3 revenue up 4×; follows USD 17.4 bn Microsoft contract.	Underscores demand for high-performance computing capacity.
Meta / Yann LeCun	Meta’s chief AI scientist to exit and launch startup; firm reorganising AI under Superintelligence Labs led by Alexandr Wang (ex-Scale AI).	Highlights internal reshuffle and competitive AI talent market.

Macro & Policy Context

US Shutdown Resolution

• 40-day government shutdown nearing end: Senate approved a compromise funding package.
• Includes back pay for federal staff and military; pending House vote.
• Positive equity response: S&P 500 +, NASDAQ +, reflecting relief over data resumption and fiscal clarity.

Inequality & Consumption Trends

• Economists describe a “K-shaped” economy: high-income groups benefit from asset inflation and wage gains; lower-income households face weak real wages and job losses.
• Corporate earnings skewed toward premium and tech sectors, while mass-market firms face pressure.
• AI advances further widen corporate and labour-market dispersion.

 

Regards,

 

Philip Janni Papageorgiou - @PhilipForexCom