Wall Street missed another rebound yesterday. Until recently, the US stock market always found a way to close in positive territory, whether it started the day down or flat. That is no longer the case. Yesterday, Wall Street made two small forays into positive territory at the start of trading, before sliding inexorably into the red. Risk appetite is evaporating. This is particularly evident in bitcoin, which dipped below £90,000 overnight for the first time since last April. The leading cryptocurrency has lost 29% of its value in a month and a half. This loss of appetite is also visible in technology stocks, which rise the most when everything is going well and fall the most when things go wrong.

Oracle lost 30% in a month, Palantir 15%. These are stocks that rose with the hype surrounding artificial intelligence. The flow of spending in the sector is undeniable, but investors are beginning to look at how this spending is financed. I have already discussed here the inbreeding between the various players in the ecosystem. The excellent Robert Armstrong, who writes the Unhedged column in the Financial Times, pointed out on Friday that the market has begun to make a new distinction in the jungle of AI success stories: it has placed companies that can easily finance their colossal investments on one side and those that have to resort to aggressive financing or borrowing, often at high rates, on the other. This fundamental distinction (the warning signs are coming from the bond market, once again) is reflected in the rankings: if Oracle has recently collapsed, it is because the company, already in debt, is making a massive bet on AI and the cloud, which will disrupt its business model, and not necessarily for the better at first. Conversely, if Alphabet is holding its own, it is because its financing is extremely robust (and also, yesterday, because Berkshire Hathaway reported a position in the stock).

Mistrust of the most stretched parts of the market after their bullish rally (here, I would like to take a moment to point out that the Nasdaq 100 gained 58% between its low on 7 April 2025 and its high on 29 October) has caused the Nasdaq 100 to fall 5.3% at this stage. Technically, the tech index is already in a consolidation zone (a downward phase in a bull market). Traders are apparently afraid that this will turn into something more serious. Firstly, because the fundamental ingredients for a purge of excesses are there, but also because a bearish technical analysis signal has formed on the S&P 500. As I am absolutely useless at chart analysis, I will copy and paste what is being said: ‘The S&P 500 closed below its 50-day moving average for the first time in 139 sessions, breaking the second-longest period of the century above this trend line.’ Of the century, no less! This is serious stuff. Visually, it looks like two cat ears, but since the cat's head is tilted slightly to the right, the 50-day moving average line pierces its ear instead of looking like one of its whiskers. If you need training in zoological chartism, send me a private message.

Joking aside, this moving average is a truly important indicator, which can trigger a sell-off. The pressure on technology stocks and the riskiest assets coincides, and this is no coincidence, with growing doubts about the evolution of US interest rates, which I already mentioned yesterday. It should be noted that rates that are not falling are synonymous with persistently high financing costs in the US, which adds fuel to the fire of scepticism about how companies will pay for all the chips and infrastructure needed to run them.

There will not be much macro data to digest today. The speeches by US central bankers will therefore continue to set the tone, with an intervention by Michael Barr, member of the Board of Governors, at around 4.30 p.m. Yesterday, his counterpart Christopher Waller said that the central bank should cut rates by another quarter of a point next month to prevent a downturn in the labour market, in light of continued weak private employment data. This statement slightly shifted the market in favour of a rate cut on 10 December, even though this opinion has been in the minority for the past few days (46%).

In Asia-Pacific, things are looking rather bleak this morning. India is limiting the damage (-0.2%), but other markets are nosediving. This is particularly evident in South Korea (-3.3%) and Japan (-3.2%), two very tech-savvy markets that are captive to the New York market. Australia and Taiwan are also down, by around 2%. China and Hong Kong are holding up a little better, but are still down 1 to 1.5%. Europe is expected to open sharply lower. US leading indicators are also very bearish.

On today's agenda: in the United States, capacity utilization, GM industrial production, and the NAHB housing market index will be released. See the full calendar here.

  • GBP / USD: US$1.32
  • Gold: US$4,010.92
  • Crude Oil (BRENT): US$63.63
  • United States 10 years: 4.1%
  • BITCOIN: US$89,629

In corporate news:

  • BP plc has partially restored service on a segment of the Olympic pipeline in Washington following a leak.
  • GSK has committed £45 million to fund six new research initiatives utilizing AI to combat antimicrobial resistance.
  • Big Yellow reported a modest revenue increase due to higher rents, offset by a decrease in occupancy rates.
  • Convatec is seeing Novo Holdings plan to sell its remaining 7.8% stake, totaling approximately 155 million shares, below GBP 2.27 per share.
  • Rio Tinto plans to cut production at its Yarwun Alumina Refinery by 40% to address waste management issues.
  • Amundi has increased its presence in private markets by purchasing a 9.9% stake in Intermediate Capital Group (ICG).
  • Akzo Nobel and Axalta are merging in an all-stock deal to form a global coatings leader valued at $25 billion.
  • Skanska has increased its construction operating margin target from 3.5% to at least 4.0%.
  • Credit Agricole aims for a 2028 net profit target surpassing analyst forecasts and plans to increase its ownership in Banco BPM.
  • ABB has raised its EBITA margin target to 18-22% and increased its ROCE objective to above 20%.
  • JCDecaux has renewed its exclusive advertising contract with STIB for public transport in Brussels.
  • XP Inc. announced a cash dividend, the retirement of treasury shares, and a new share repurchase program following a positive Q3 report.
  • James Hardie Industries confirmed the AZEK acquisition exceeded cost savings targets and boosted Q2 net sales.
  • Helmerich & Payne reported a miss in Q4 earnings but announced the reactivation of seven drilling rigs in Saudi Arabia.
  • Honda plans to gradually resume regular production at its North American vehicle factories starting November 24.

See more news from UK listed companies here

Analyst Recommendations:

  • Ninety One Plc: Investec maintains its buy recommendation and raises the target price from GBX 205 to GBX 250.
  • Kingfisher Plc: Deutsche Bank maintains its hold recommendation and raises the target price from GBX 280 to GBX 285.
  • Genuit Group Plc: RBC Capital maintains its outperform recommendation and reduces the target price from GBX 520 to GBX 500.
  • Glencore Plc: Citi maintains its buy recommendation and raises the target price from GBP 4 to GBP 4.40.
  • Antofagasta Plc: Banco BTG Pactual maintains its buy recommendation and raises the target price from GBP 24.50 to GBP 34.
  • Flutter Entertainment Plc: Wells Fargo initiates an overweight recommendation with a target price of USD 272.
  • Big Yellow Group Plc: Jefferies maintains its hold recommendation and raises the target price from GBX 1191 to GBX 1200.
  • Informa Plc: AlphaValue/Baader Europe maintains its add recommendation and reduces the target price from GBX 1087 to GBX 1078.