This year the S&P 500 is on a bit of a hybrid/WFH schedule rallying at the start of the week then closing out Thursday and Friday with more sellers than buyers.
Risk-off is dominating at the end of the week. NVDA is down 11% since Nov. 3rd ahead of next Wednesday's quarterly earnings release.
The trend could be in place due to the heightened geopolitical and domestic political uncertainty inspiring investors to de-risk into the weekend.
YTD top-down sentiment driven market price movements are frustrating for fundamentally driven hedge fund strategies.
Global Markets & Economic Data
- Markets Summary: Early November's weakness continues a quarterly pattern of strong price action during the final two weeks of a quarter (end of month flows) and subsequent sell offs in the opening days. Q3 tech earnings were more mixed than expected and a heavy schedule of Treasury auctions put price pressure on both stocks and bonds.
- US: Consumer sentiment figures slipped in October and September Consumer Credit reading came in worse than expected at 6.0 Billion (vs 11.8 Billion expected). The Treasury auctioned $125b across 4 separate offerings last week and $58b 10-Year Treasury notes the week prior. Core Personal Consumption Expenditure growth for Q3 came in at 2.2% (0.1% above estimate). Final Q3 GDP was lowered by 0.1% to 2.7%.
- UK/EU/Switzerland: Q3 GDP was revised up by 0.1% to 0.2%; unemployment in September was steady at 4.3%. UK Government revenue collections through October came in just below forecast. German and Spanish October retail sales underperformed forecasts, weakening the prospect of European stimulus packages. The Swiss October PMI reading rose to 50.7 ahead of expectations, continuing the recent trend of rising activity in the Swiss economy.
- Asia: China Caixin PMIs were weak with Manufacturing at 50.3 (Forecast 50.6) and Services PMI at 52.0 (Forecast 52.2). Hong Kong's Q3 GDP slowed to 1.8% y/y (Forecast 2.6%). The People's Bank of China pumped CNY 1.5 trillion into the system via medium-term lending facility to support its financial system. Japan's Manufacturing PMI and BoJ's Large Manufacturer Index were both in contraction. Wage data however showed 2.8% annual growth for September and household spending data came in above expectations.
Index Returns Summary
- MSCI World: +2.02% MTD · +19.86% YTD
- MSCI Asia Pacific: +2.07% MTD · +23.07% YTD
- MSCI Europe: +0.76% MTD · +28.97% YTD
- MSCI China: -3.81% MTD · +38.03% YTD
- Bloomberg Barclays Global Aggregate Index: -0.25% MTD · +7.65% YTD
- Bloomberg Commodities Index: +2.55% MTD · +8.49% YTD
- HFRX Global: +0.68% MTD · +6.33% YTD
- HFRX Macro/CTA: +1.38% MTD · +4.00% YTD
- HFRX Equity Hedge: +0.68% MTD · +8.95% YTD
Index data as of October 31st, 2025
Market Spotlight: AI in a Loop
OpenAI's CFO this week said that the market is too anxious about a possible bubble in AI and separately the firm founder Sam Altman testily responded to a pointed question on its $13b current revenue versus its $1T of spending commitments by saying "if you want to sell your shares, I will find you a buyer".
Market Spotlight: US bond yields going lower
Lately equities indices have been falling alongside bond prices, which is atypical.