The State of Markets: “US Equities: Pause or Pullback?”
US equities have been following the classic ‘buy the rumour, sell the fact’ pattern. That is, they rallied into, and in anticipation of last week’s Fed rate cut (Wednesday 29th October). They then topped shortly after the Fed press conference, and have since rolled over/pulled back, with the S&P500 down by around 4.0%.
Interestingly, strength in other key asset prices had already started to reverse ahead of last week’s peak in equities. Gold and silver futures, for example, have been working their way lower since late October, while Bitcoin is currently down 19% from its early October high ($125k). As a key barometer of liquidity in markets, Bitcoin typically follows a similar trend to the S&P500, and often moves ahead of it (see chart below).
The key question, therefore, is: Are US equities merely pausing for breath? Or is recent weakness the start of something more sinister (a more meaningful pullback)? For detailed analysis of those questions, see our latest Tactical Equity Asset Allocation update, published this Wednesday.
This week’s US macro data includes the NFIB small business survey report on Tuesday as well as US CPI, retail sales, and PPI (which, though, are unlikely to be published due to the ongoing government shutdown). While most companies have reported their earnings (447 of the S&P500), a handful of updates are expected this week (including from Cisco, Applied Materials, and Occidental). There are also speeches and comments by key Fed governors (Williams, Bostic, and Musalem). In Europe the EZ and German ZEW surveys are due on Tuesday with the first estimate for UK Q3 GDP on Thursday. Please see below for a full list of upcoming data and events.
Key chart: Bitcoin price (USD) vs. S&P500
Upcoming Important Data/Events This Week:
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Events: |
NB The US government shutdown is ongoing – and delaying the release of certain data points. |
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Monday: |
N/A |
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Tuesday: |
UK employment, jobless claims & average weekly earnings (Sept/Oct, 7am); Chinese total social financing, new yuan loans, and M0, M1 & M2 money supply (Oct, 8:30am); US NFIB small business optimism (Oct, 11am). |
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Wednesday: |
N/A |
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Thursday: |
US headline & core CPI (Oct, 1:30pm); UK GDP (Q3 first estimate, 7am). |
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Friday: |
Chinese home prices (Oct, 1:30am), retail sales, industrial production and property data (Oct, 2am) & FDI (Oct, 7am); US retail sales (Oct, 1:30pm); US headline & core PPI (Oct, 1:30pm). |
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Key earnings: |
Sony (Mon); SoftBank Group Corp (Tues); Cisco (Wed); Alibaba, Walt Disney, Applied Materials, Siemens AG, Assicurazioni Generali, Merck (Thurs); Allianz, Mitsubishi UFJ Financial, Mitsui Financial, Mizuho Financial (Fri). |
Key Research
Tactical Equity Asset Allocation No. 262, 5th November 2025 :
“Start (tentatively) Re-BUILDing Tactical Equity OW"
“But if the recent rise in repo rates turns out not to be temporary, the Fed in my view would need to begin buying assets to keep reserves from falling further and maintain an ample supply of reserves.”
Source: Lorrie Logan, Dallas Fed Governor, 31st October 2025: “Ample liquidity for a safe and efficient banking system”: https://www.dallasfed.org/news/speeches/logan/2025/lkl251031
Over the course of the summer, our SELL-off indicator, which was designed to forecast waves of risk aversion, has generated two clear warning signals. Initially in early July through to the end of the month, and then again in early September (through to mid-October). In both instances, the signal was incorrect (and has now closed out).
The failure of that model, in our view, reflects the strength of the momentum in this equity market. Underpinning that strength is a variety of macro, liquidity and positioning factors.
Key North American Macro Data & Events:
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Events: |
NB The US government shutdown is ongoing – and delaying the release of certain data points. Speeches by Fed’s Williams (Wed, 2:20pm), Paulson on fintech (Wed, 3pm), Bostic at Atlanta Economics Club (Wed, 5:15pm), Musalem Fireside chat on monetary policy (Thurs, 5:15pm), Bostic (Fri, 2:20pm), Schmid at an energy conference (Fri, 3:05pm); release of BOC monetary policy deliberations (Wed, 6:30pm); US government budget data (Oct, Thurs). |
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Monday: |
N/A |
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Tuesday: |
US NFIB small business optimism (Oct, 11am). |
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Wednesday: |
Canadian building permits (Sept, 1:30pm). |
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Thursday: |
US headline & core CPI (Oct, 1:30pm); US weekly jobless claims (1:30pm). |
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Friday: |
Canadian manufacturing & wholesale sales (Sept, 1:30pm); US retail sales (Oct, 1:30pm); US headline & core PPI (Oct, 1:30pm); US business inventories (Sept, 3pm). |
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Key earnings: |
Occidental, Blackstone Secured Lending Fund (Mon); Cisco, Transdigm, Loblaw Companies (Wed); Walt Disney, Applied Materials, Ross Stores (Thurs). |
Fig B: US headline & core CPI (Y-o-Y %)
Key European Macro Data & Events
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Events: |
Speeches by ECB’s Vujcic in London (Tues, 9:30am), Kocher in Vienna (Tues, 1pm), Schnabel in London (Wed, 10:45am), Guindos in Dublin (Wed, 11:15am), Villeroy in Paris (Thurs, 9am), Elderson in Frankfurt (Thurs, 1pm), Vujcic in Singapore (Fri, 12:05am), Elderson in Frankfurt (Fri, 10:30am); ECB publishes Economic Bulletin (Thurs, 9am). |
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Monday: |
Eurozone Sentix investor confidence (Nov, 9:30am). |
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Tuesday: |
German & Eurozone ZEW survey – expectations & current situation (Nov, 10am). |
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Wednesday: |
German headline & core CPI (October final estimate, 7am); Italian industrial production (Sept, 9am); German current account balance (Sept, 1pm). |
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Thursday: |
French ILO unemployment rate (Q3, 6:30am); Eurozone industrial production (Sept, 10am). |
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Friday: |
German wholesale price index (Oct, 7am); headline & core CPI – all October final estimates – for France (7:45am) & Spain (8am); Italian trade balance (Sept, 9am); Italian general government debt (Sept, 9:30am); Eurozone trade balance (Sept, 10am); Eurozone GDP & employment (Q3 second estimate, 10am). |
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Key earnings: |
Hannover Rueckversich (Mon); Munich Re Group (Tues); Infineon (Wed); Siemens AG, Deutsche Telekom AG, Enel, Assicurazioni Generali, Merck (Thurs); Allianz (Fri). |
Fig C: Eurozone ZEW index, economic expectations
Key UK Macro Data & Events
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Events: |
Speeches by BOE’s Lombardelli (Mon, 9:10am), Greene (Tues, 8:30am), Pill (Wed, 12:05pm), Greene (Thurs, 12pm). |
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Monday: |
N/A |
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Tuesday: |
BRC retail sales (Oct, 12:01am); employment, jobless claims & average weekly earnings (Sept/Oct, 7am). |
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Wednesday: |
N/A |
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Thursday: |
RICS house price balance (Oct, 12:01am); GDP (Q3 first estimate, 7am), monthly GDP estimate, industrial & manufacturing production, goods trade balance & construction output (Sept, 7am); Labour productivity (Q3, 9:30am). |
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Friday: |
N/A |
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Key earnings: |
3i Group (Thurs). |
Fig D: Average weekly earnings (Y-o-Y %, 3 m.m.a.)
Key Asia-Pacific Macro Data & Events
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Events: |
Speech by BOJ’s Nakagawa in Okayama (Mon, 3:40am); Fireside chat with RBA’s Jones (Tues, 10:15pm). |
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Monday: |
Japanese ESRI leading index (September final estimate, 5am); Australian Westpac consumer confidence (Nov, 11:30pm). |
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Tuesday: |
Australian NAB business confidence (Oct, 12:30am); Chinese total social financing, new yuan loans, and M0, M1 & M2 money supply (Oct, 8:30am); Japanese M2 & M3 money supply (Oct, 11:50pm). |
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Wednesday: |
Japanese machine tool orders (October first estimate, 6am); Japanese PPI (Oct, 11:50pm). |
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Thursday: |
Australian consumer inflation expectations (Nov, 12am); Australian employment data (Oct, 13:30am). |
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Friday: |
Chinese home prices (Oct, 1:30am), retail sales, industrial production and property data (Oct, 2am) & FDI (Oct, 7am). |
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Key earnings: |
Sony, ANZ Holdings (Mon); SoftBank Group Corp (Tues); Tencent Holdings, Alibaba, NetEase (Thurs); Mitsubishi UFJ Financial, Sumitomo Mitsui Financial, Mizuho Financial, SMIC, Li Auto (Fri). |
Fig E: Chinese M1 & M2 money supply growth (Y-o-Y %)
This Week:
Longview on Friday, 7th November 2025:
“All Eyes on the UK”
Tactical Equity Asset Allocation No. 262, 5th November 2025:
“Start (tentatively) Re-BUILDing Tactical Equity OW”
Daily Dose of Macro & Markets:
Daily Dose of Macro & Markets 6th November 2025:
“America’s K-Shaped Cycle: Is Fed Policy Starting to ‘Work’?”
Daily Dose of Macro & Markets 5th November 2025:
“Liquidity, Liquidity, Liquidity”
Daily Dose of Macro & Markets 4th November 2025:
“OPEC: Too Little, Too Late –> Inventories Rising”
Weekly Risk Appetite Gauge:
'Weekly Risk Appetite Gauge', 3rd November 2025:
“Appetite for Risk’: ‘Markets -> Rolling Over (Short Term)? All Eyes on the Regional Banks”
Last Week:
Longview on Friday, 31st October 2025:
Global Macro Report, 28th October 2025:
“Germany: The Long Winter Is Ending A.k.a. Growth Momentum Set to Re-start”
Daily Dose of Macro & Markets:
Daily Dose of Macro & Markets 30th October 2025:
“The Fed, ST SELL Signals & UK Growth Signs”
Daily Dose of Macro & Markets 29th October 2025:
“Fed Meeting –> Two Big Issues”
Daily Dose of Macro & Markets 28th October 2025:
“EZ Macro Data -> Spluttering”
Weekly Risk Appetite Gauge:
'Weekly Risk Appetite Gauge', 27th October 2025:
“Expect Breakout to Continue This Week”