U.S. Markets Recover Amid Fed Rate Cut Hopes; Eli Lilly Hits $1 Trillion Valuation

Economic

Summary:

U.S. stocks rebounded on Friday after a challenging week, fueled by hopes of a potential Fed rate cut in December, despite disappointing tech earnings and a strong U.S. jobs report...

Stock Market Recovery Amid Rate Cut Optimism

U.S. markets saw a recovery on Friday, though major indices ended the week lower after a period of volatility driven by disappointing earnings from tech companies and a stronger-than-expected U.S. jobs report. Despite these setbacks, a flicker of hope emerged as New York Federal Reserve President John Williams signaled that the central bank might lower interest rates in the near future. His comments led traders to increase the likelihood of a December rate cut to about 70%, up from 44% the previous week, according to CME FedWatch data.

The week was tough for tech stocks, particularly in the AI sector. Nvidia's strong earnings report failed to alleviate concerns over inflated valuations and the possibility of an unsustainable AI bubble. This led to losses across major tech stocks, including SoftBank, Samsung, and Baidu, as investors grew wary. However, Alphabet’s stock bucked the trend, with its new AI model, Gemini 3, and its plans for custom chips showing promise against Nvidia's dominance in the sector.

On a more positive note, Eli Lilly’s stock surged, helping the company reach a milestone as the first healthcare company to achieve a $1 trillion market capitalization. Eli Lilly’s impressive 36% gain this year highlights the diversification of market leadership, showing that healthcare stocks, too, can lead in a market often dominated by tech.

Fed's Shift Toward Dovish Stance Boosts Investor Sentiment

Despite last week’s disappointing data, including the U.S. Bureau of Labor Statistics' report showing stronger-than-expected job growth, the market interpreted Williams' comments as a sign that the Fed may focus on supporting growth rather than fighting inflation in the near term. This shift in outlook contributed to a rebound in stock prices, providing a glimmer of optimism for investors who had been bracing for tighter monetary policy.

Outside of the U.S., global events continued to influence market sentiment. In Europe, the Stoxx 600 index saw a decline, largely due to sell-offs in technology and defense stocks. Meanwhile, tensions surrounding the U.S.-led Ukraine peace plan added complexity to geopolitical discussions, further complicating investor outlooks.

A Balanced Market Ahead

Looking ahead, the key question for markets will be how the Fed navigates its remaining policy meeting in December, with traders closely monitoring any signs of a rate cut. Eli Lilly’s success underscores the potential for diversification in leadership, even as the AI sector grapples with market corrections. Meanwhile, the broader economic indicators will likely continue to provide mixed signals, leaving investors balancing between hope for a rate cut and caution over economic growth dynamics.

As markets digest recent volatility, optimism around a potential Fed rate cut and strong performances from companies like Eli Lilly provide a sense of stability. However, the impact of ongoing tech stock weakness and global geopolitical tensions remains a key factor in shaping the outlook for U.S. and global markets.

Source: CNBC

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James Whitman

Economic

European Union ministers are set to urge top U.S. trade officials on Monday to apply more of the July EU-US trade deal, such as by cutting U.S. tariffs on EU steel and removing them for EU goods such as wine and spirits.

U.S. Commerce Secretary Howard Lutnick and U.S. Trade Representative Jamieson Greer will meet EU ministers responsible for trade on their first trips to Brussels since taking office.

The EU ministers plan to discuss pressing trade issues, including Chinese rare earth and chip exports restrictions, and host Lutnick and Greer for 90 minutes over lunch.

Under the end-July deal, the United States set 15% tariffs on most EU goods, while the European Union agreed to remove many of its duties on U.S. imports.

That may only happen in March or April, given it requires approval from the European Parliament and EU governments, which EU diplomats say has exasperated Washington.

But while insisting the process is on course, the 27-nation bloc is also pointing to agreed items on which it wants to see progress, chief among them steel and aluminium.

The United States has a 50% tariff on the metals and since mid-August has applied this to the metal content in 407 "derivative" products such as motorcycles and refrigerators. More derivatives may be added next month.

EU diplomats say that such actions, along with the prospect of new tariffs on trucks, critical minerals, planes and wind turbines, threaten to hollow out the July accord.

"We're at a delicate moment," one EU diplomat said. "The U.S. is looking for reasons to criticise the EU as we are trying to get them to work on steel and other unresolved matters."

The bloc additionally wants a broader range of its products subject only to low pre-Trump duties. These could include wine and spirits, olives and pasta.

The EU is also ready to discuss areas of possible regulatory cooperation, such as covering cars, the bloc's proposed purchases of U.S. energy and joint efforts on economic security, particularly in response to Chinese export controls.

Source: Reuters

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Justin

Stocks

Economic

Singapore's biggest bank has withdrawn an application to start talks to buy as much as 49% of Alliance Bank Malaysia Bhd., replacing it with one to acquire up to 30% instead, people with knowledge of the matter said.

DBS Group Holdings Ltd. made the decision after failing to get approval from the Malaysian central bank for its initial request, which would've required a waiver because generally a company can only buy as much as 30% of a financial institution in the country, the people said.

The revised request should have a better chance of being approved by Bank Negara Malaysia, the people said, asking not to be identified because the information is private.

That would pave the way for DBS to engage with Alliance's largest shareholder, Vertical Theme Sdn., a Malaysian holding company backed by Singapore state investor Temasek Holdings Pte, the people said. Temasek has a 49% stake in Vertical Theme via Duxton Investment & Development Pte. It also holds about 28.3% of DBS.

Representatives for DBS and Vertical Theme declined to comment. A spokesperson for Alliance said the company wasn't aware of the matter, while the Malaysian central bank didn't immediately respond to a request for comment.

An Alliance deal would give DBS a footprint in Malaysia, where Singaporean rivals Oversea-Chinese Banking Corp. and United Overseas Bank Ltd. already have a presence. DBS is Southeast Asia's largest bank by total assets.

Alliance's shares have fallen 6% in Kuala Lumpur this year, while the city's main benchmark is down less than 2%. Alliance has a market capitalization of about 7.7 billion ringgit ($1.9 billion).

Source: Bloomberg Europe

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SAXO

Stocks

Economic

Key points:

· Strong earnings from AI leaders have not fully eased concerns about stretched valuations and execution risks.

· In our view, the next phase of the AI cycle will reward companies that can fund, scale, and monetise AI sustainably — while those relying heavily on hype or debt may face more volatility.

· Investors can use a simple checklist to navigate the noise, while recognising both the opportunities and the risks.

AI's reality check: Why investors want proof, not promises

In our view, AI remains one of the most powerful forces reshaping markets, but the tone is changing. Strong earnings from leading chipmakers e.g., Nvidia's Q3 FY2026 revenue grew 62% YoY (Source: Nvidia Investor Relations) reassure investors that demand is real, yet the sharp swings in market reaction show that enthusiasm now sits alongside questions around sustainability, profitability, and execution.

The broad "everything goes up" phase of the AI trade is fading. What replaces it is a more nuanced market: one that rewards fundamentals over narratives.

Investors now face a key challenge of understanding which companies have the financial and operational strength to compete through cycles. That will potentially help them to separate the durable players from those caught up in the momentum.

Below is a simplified but strategically meaningful framework that could be used to decode the AI ecosystem.

A simple 8-factor checklist to evaluate AI stocks

1. Can the company afford the AI race?

Why it matters: AI is extremely capital-intensive. Companies investing in chips, power, and data centres need financial strength to survive both growth phases and volatility.

What to look for:

· Positive and stable cash flow

· Low or manageable debt levels

· Ability to self-fund AI investments

Risks: Heavy borrowing or negative cash flow may amplify volatility.

2. Is AI already adding to revenue?

Why it matters: Investors are becoming more selective; they want to see AI adding real business value, not just product demos.

What to look for:

· AI-linked revenue mentioned in earnings

· Clear pricing for AI features

· Evidence customers are willing to pay for new capabilities

Risks: Companies that invest ahead of monetisation may face margin pressure.

3. Does the company have infrastructure advantage?

Why it matters: AI needs chips, land, power, cooling, and network bandwidth. Access to scarce infrastructure is becoming a major competitive edge.

What to look for:

· Secure chip supply (Nvidia/AMD/custom silicon)

· Capacity to expand data centres

· Plans to manage energy demand

Risks: Delays due to power shortages or supply constraints.

4. Does the company control unique data?

Why it matters: As models get more similar, proprietary data becomes the true differentiator.

What to look for:

· Large user bases

· Exclusive datasets or industry-specific data

· Strong partnerships that expand data access

Risks: Companies relying on public data face weaker defensibility.

5. Are customers staying and using more?

Why it matters: Sticky customers create recurring revenue and lower the risk of AI investments not paying off.What to look for:

· High renewal rates

· Growing engagement or usage after AI rollouts

· Enterprise contracts with long durations

Risks: Churn or weak engagement can quickly erode the AI narrative.

6. How dependent is the company on a few large customers?

Why it matters: Many AI suppliers — especially in chips, cloud infrastructure, and data-centre services — rely heavily on a small number of hyperscalers. When 20–50% of revenue comes from one or two clients, even a slight pause in spending can create sudden earnings volatility.

What to look for:

· No single customer accounting for more than 20–30% of revenue

· Diversified demand across cloud providers, enterprises, and industries

· Clear signs that new customers are being added each quarter

· Long-term contracts that offer visibility into future spending

Risks: Revenue may fall sharply if a major customer delays capex, shifts to an in-house solution, renegotiates pricing, or reduces reliance on the company's AI infrastructure.

7. Is management realistic about AI timelines?

Why it matters: Markets are punishing over-promising and rewarding measured execution.

What to look for:

· Clear timelines and cautious guidance

· Credible communication during earnings

· Track record of delivering what they announce

Risks: Missed timelines or shifting goalposts raise credibility concerns.

8. Is the valuation pricing in too much perfection?

Why it matters: Elevated expectations increase volatility, especially in an environment where interest rates may stay higher for longer.

What to look for:

· Valuation relative to peers

· Earnings forecasts vs. price multiples

· Market sentiment and crowding

Risks: Stocks with perfection priced in can fall sharply on small disappointments.

How popular AI names score across these factors

Illustrative only. Not investment advice.Reasoning is simplified to help investors understand strengths and risks.

Source: Saxo

Final thoughts

While AI is clearly transforming industries and driving a multi-year investment cycle, in our opinion the next stage of this cycle may reward companies that balance ambition with financial strength, operational execution and diversified demand.

This 8-factor checklist gives investors a simple, structured framework to evaluate AI stocks, acknowledging both the potential upside and the meaningful risks.

Source: SAXO

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Gerik

Economic

Stocks

Markets Respond to Fed Rate Cut Hopes

Asia-Pacific markets began the week on a positive note, buoyed by renewed optimism that the U.S. Federal Reserve could implement a third rate cut this year. This optimism stemmed from comments made by New York Fed President John Williams, who suggested that a weakening labor market might pose a greater economic risk than persistent inflation. The possibility of a rate cut has gained traction, with Fed funds futures showing a 70% chance of a quarter-percentage-point reduction during the Fed’s December meeting, up from about 44% in mid-November.

Following a turbulent week of losses, particularly in tech stocks, the outlook turned brighter. Hong Kong’s Hang Seng index rose by 1.41%, fueled by gains in tech and healthcare stocks. Australia’s S&P/ASX 200 rebounded by 1.12%, reversing a 1.59% loss from Friday, with significant movements in logistics and mining stocks. South Korea’s KOSPI index increased by 1.56%, while Japan’s markets were closed for a public holiday.

In contrast, mainland China’s CSI 300 was nearly flat, and the Nikkei 225 in Japan saw a decline of 2.4%. Despite this, Samsung Electronics posted a notable 4.4% gain, while other tech stocks, including SoftBank and Baidu, continued to face challenges after recent losses.

Impact of Economic Data and Global Sentiment

The rebound in Asia-Pacific markets followed a mixed performance last week, with tech stocks particularly hard-hit as traders pulled back amid concerns over the AI sector. However, the possibility of a rate cut from the Fed has provided fresh momentum. Investors are hoping that the Fed will prioritize economic stability and address labor market weakness in its upcoming decision.

The upcoming release of key economic data, including U.S. retail sales, producer prices, and jobless claims, is expected to further shape expectations for the Fed’s actions and could influence market movements in the coming weeks.

Causal Dynamics and Market Sentiment

The positive shift in market sentiment is driven by a combination of factors: the potential for lower borrowing costs, stabilizing expectations for economic growth, and the easing of pressure on inflation. These elements together have restored some confidence in global equity markets, despite the continued volatility in the tech sector.

As markets weigh the potential for a Fed rate cut and digest the latest economic indicators, investor sentiment in the Asia-Pacific region has turned cautiously optimistic. With key markets such as Hong Kong, South Korea, and Australia posting gains, the path forward will depend on how the global economic narrative evolves and whether the Fed moves to ease rates in December.

Source: CNBC

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James Whitman

Economic

Singapore's inflation rate climbed for a second straight month, year on year, with price growth in October hitting a near 1-year high and topping analysts' expectations.

After hitting a four-year low in August, consumer prices rose 1.2% — highest since August 2024 — compared with the average 0.9% estimated by economists polled by Reuters and the 0.7% rise in September.

Core inflation in the city-state — which strips out prices of accommodation and private transport — also rose to 1.2%, up from 0.4% and compared with the 0.7% expected in the Reuters poll.

On a month-on-month basis, the consumer price index was flat, with core inflation coming at 0.5% compared to the prior month.

Inflation data comes as Singapore on Friday sharply upgraded its economic growth forecast to 4% from 1.5%-2.5%, as it posted robust third-quarter GDP numbers.

The economy grew 4.2% in the third quarter from a year earlier, beating estimates and extending the second quarter's 4.7% expansion. Singapore's Ministry of Trade and Industry said that global economic conditions had turned out more resilient than expected, but warned that growth would likely cool in 2026 as U.S. tariffs weigh on global demand.

Singapore's exports to the U.S. are subject to a 10% baseline tariff, despite the country having a trade deficit with the U.S. and also a free trade agreement going back to 2004.

The country's economy is hugely dependent on trade, with World Bank data showing that Singapore has a trade-to-GDP ratio of over 320% in 2024.

In the third quarter, Singapore recorded a 3.3% fall in non-oil domestic exports, or NODX, year on year, dragged by weaker pharmaceutical and petrochemical exports.

In October though, NODX surged 22.2% compared to a year earlier, driven by exports of non-monetary gold and electronic products.

The Monetary Authority of Singapore has forecast inflation around 0.5% to 1% for 2025.

The MAS held monetary policy unchanged in its October meeting, saying that Singapore's economic growth had been stronger than expected.

Source: CNBC

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Winkelmann

Political

Economic

Duduzile Zuma-Sambudla is a member of parliament for the MK Party [FILE: November 10, 2025]

South African police on Sunday confirmed they are investigating claims that Duduzile Zuma-Sambudla, daughter of former President Jacob Zuma, and two others conned 17 men into fighting for Russia in Ukraine.

Another of Zuma's daughters, Nkosazana Bongamini Zuma-Mncube, accused her stepsister of sending the men to Russia before they were ordered to the front lines.

"These men were lured to Russia under false pretenses and handed to a Russian mercenary group to fight in the Ukraine war without their knowledge or consent. Among these 17 men are eight of my family members," Zuma-Mncube said in a public statement.

Earlier this month, President Cyril Ramaphosa's office said it "received distress calls for assistance to return home from 17 South African men, ages 20 to 39, who are trapped in the war-torn Donbas."

South Africans fighting for Russia in Ukraine

Zuma-Sambudla, who is also a member of parliament for her father's uMkhonto weSizwe party (MK), did not immediately respond to the accusations.

She reportedly told the men they would train as bodyguards to work for the party.

On November 6, the South African Presidency said in a statement that the men were promised "lucrative employment contracts." Ramaphosa ordered an inquiry into how the men were recruited.

South African law prohibits citizens from fighting for foreign armies without government authorization.

Zuma-Mncube urged the government "to expedite all diplomatic efforts to secure the immediate and safe return of our citizens."

Zuma-Sambudla also on trial over deadly riots

The latest police investigation comes as Zuma-Sambudla is already on trial for allegedly inciting violence during riots in 2021 that left more than 300 people dead.

The unrest broke out in July 2021 after her father was arrested for disobeying a court order to testify at a corruption inquiry, and it morphed into widespread looting.

Zuma-Sambudla has consistently voiced strong support for her father, former president Jacob Zuma [FILE: December 16, 2023]Image: Themba Hadebe/AP Photo/picture alliance

She pleaded not guilty to the charge during a hearing in early November attended by Zuma.

He was South Africa's president from 2009 to 2018.

MK was a major disruptor in last year's national election, contributing to a sharp drop in support for the African National Congress, which Zuma once led.