The flurry of records continued yesterday on global stock markets, which almost all closed higher. France's CAC 40 reached a new all-time high, crossing the 8,280-point mark for the first time during the session. The extra boost came from banking stocks, which regained their crown as the best sector of the year on the continent after stalling in September and October. 

While Europe is shining thanks to banking and industry, in the absence of a technology sector worthy of the name on the stock market, Wall Street has relied more on companies closely or remotely linked to artificial intelligence to rebound after the slump in early spring. But that may be changing. In any case, this is a trend that has been circulating for the past few sessions, resulting in a fourth day of decline out of five for the Nasdaq 100. It was a slight decline (-0.06%), but a decline nonetheless, while the old Dow Jones broke its previous day's record by gaining 0.7%.

A company like Microsoft has posted a decline of more than 3% in three months, while the market has gained just over 6%. This 10% underperformance shows that the company has not been entirely convincing on AI, due to lavish capital expenditure. It's not a disaster either, because the share price is still up 20% over a year, but it shows that investors have started to secure their opulent gains on the AI theme. Meta Platforms is perhaps even more symptomatic. The share price is now only up 4% over the year, after falling 23% in three months. Meta initially caused concern due to a certain delay in AI, then its boss Mark Zuckerberg began recruiting across the board and investing tens of billions of dollars. A bit like when he became passionate about the Metaverse. But this time, he rode the main wave, which allowed the stock to triple in 2023 before gaining another 65% in 2024. Since then, things have been less fun, and Meta's AI dream team, recruited from the competition at great expense, has found itself facing what looks like a good old-fashioned redundancy plan. The company's leading AI guru (not Mark Zuckerberg, but Yann LeCun) is even on his way out.

The question now is whether profit-taking will lead to a more pronounced market rotation in favour of undervalued sectors. This has been something of a recurring theme on the stock market over the last decade: will investors abandon the expensive tech stocks that have been inflating their portfolios since 2009 and return to boring companies? There have been 50 such phases in recent years. Most of them came to nothing. A few have led to temporary outperformance by stocks that reasonable people call ‘value’ and others call boring. The most notable episode was in 2022, when the Nasdaq lost a third of its value while the archetype of old-fashioned investing, Warren Buffett's conglomerate Berkshire Hathaway, gained 4%. At MarketScreener, we have an in-house indicator to track these rotations, the Berkark index. In fact, the index is simply a comparison between the performance of the Ark Innovation ETF, run by the high priestess of risky investment Cathie Wood, and the performance of Berkshire Hathaway shares, run by Warren Buffett. Since the beginning of October, this indicator shows that Berkshire has gained 5.5% while Ark Innovation has lost 5%. This is a signal to watch, as it marks a turning point since the beginning of the year, when the queen was beating the king hands down (42% increase vs. 11%). For the more curious among you, I would point out that since 1 January 2022, i.e. taking into account both the plunge in technology stocks and the AI boom, Berkshire Hathaway has risen by 70% excluding dividends and the Nasdaq 100 by 55%. Ark Innovation is down 13%. This just goes to show that you still need to keep an eye on boring stocks.

Today's news is dominated by Donald Trump's signing of the end of the shutdown, following the House of Representatives' vote in favour. The affected federal agencies will now begin to restart operations. However, they will not be ready to publish October's inflation figures today, as the announcement has been postponed. On the monetary front, Kevin Hassett, director of the US Council of Economic Advisers, has officially declared himself a candidate to succeed Jerome Powell as head of the Fed. To strengthen his candidacy, he immediately announced that he was in favour of a large rate cut in December. Here is someone who knows the arguments that move the boss.

In Asia-Pacific, the picture is mixed this morning. Japan, mainland China, India and South Korea are up slightly. The Hang Seng is stable in Hong Kong, while Taiwan and Australia are losing some ground. Leading indicators are bullish in Europe and the United States after the official end of the budget impasse in Washington.

Today's economic highlights:

On today's agenda: the producer price index in Japan; in the United Kingdom, the quarterly GDP and the monthly GDP; industrial production in the eurozone; in the United States, the consumer price index, new unemployment claims, DOE crude oil inventories, and the federal budget balance. See the full calendar here.

  • GBP / USD: US$1.31
  • Gold: US$4,210.84
  • Crude Oil (BRENT): US$62.66
  • United States 10 years: 4.1%
  • BITCOIN: US$103,774

In corporate news:

  • SSE raised GBP2 billion through an equity placing at 2,050 pence per share to finance a transformative energy investment plan.
  • Siemens reported higher revenue but lower net profit, plans significant AI investment, and is reducing its stake in Siemens Healthineers.
  • Volkswagen is involved in legal proceedings over a diesel emissions scandal and is advancing EV and autonomous vehicle technologies.
  • Generali reported a 10% increase in operating profit and significant net profit growth for the first nine months of 2025.
  • Deutsche Telekom reported strong Q3 results, raised full-year profit guidance, and announced share buybacks.
  • Merck KGaA reported higher earnings and sales for Q3 2025, driven by organic growth and strong operational performance.
  • Embracer Group AB exceeded Q2 financial expectations with strong revenue and plans a separate listing for Coffee Stain Group.
  • Forterra surpassed a $1 billion valuation following a successful $238 million funding round.
  • Deutsche Pfandbriefbank AG reported a significant pre-tax loss for Q3 and full year due to costly U.S. market exit.
  • Geox reduced its 2025 sales forecast following a 6.2% revenue decline in the first nine months.
  • Solvay entered strategic partnerships to secure rare earth materials and supply chains for U.S. magnet manufacturers.
  • Chevron is investing in oil exploration in Argentina's Vaca Muerta formation, showing confidence in long-term oil demand growth.
  • Ampco-Pittsburgh reported a 35% increase in Q3 adjusted EBITDA and anticipates annual EBITDA improvement after exiting the UK market.
  • Corby reported strong Q1 revenue growth and adjusted earnings, driven by expansion in the ready-to-drink sector.
  • Investcorp Credit Management BDC reported a decrease in net asset value while announcing Q4 2025 distributions.
  • Flutter Entertainment lowered its profit forecast due to regulatory changes and high payouts, despite Q3 revenue and EBITDA growth.
  • Delta Air Lines faces earnings impacts from a government shutdown and flight cancellations but anticipates strong Q4 earnings.
  • Amazon is under scrutiny for alleged tax evasion by sellers in China, impacting Nasdaq despite Dow reaching a record high.

See more news from UK listed companies here

Analyst Recommendations:

  • Gsk Plc: Morgan Stanley maintains its underweight recommendation and raises the target price from GBX 1345 to GBX 1500.
  • Volex Plc: Investec maintains its buy recommendation and raises the target price from GBX 425 to GBX 440.
  • Hilton Food Group Plc: Berenberg maintains its buy recommendation and reduces the target price from GBX 1090 to GBX 790.
  • Unite Group Plc: BNP Paribas maintains its outperform recommendation and reduces the target price from GBX 900 to GBX 730.
  • Astrazeneca Plc: Shore Capital maintains its buy recommendation and raises the target price from GBX 14500 to GBX 15000.
  • Jet2 Plc: Panmure Liberum maintains its buy recommendation and reduces the target price from GBX 1800 to GBX 1700.
  • Tate & Lyle Plc: Barclays maintains its equalweight recommendation and reduces the target price from GBP 4.30 to GBP 4.10.
  • Anglo American Plc: Bernstein maintains its market perform recommendation and reduces the target price from GBX 2250 to GBX 2200.
  • Vesuvius Plc: Barclays maintains its underweight recommendation and raises the target price from GBP 3.30 to GBP 3.40.
  • Flutter Entertainment Plc: Barclays maintains its overweight recommendation and reduces the target price from USD 352 to USD 325.
  • Diageo Plc: Zacks downgrades to underperform from neutral and reduces the target price from USD 96 to USD 83.