The prolonged shutdown has deprived investors of the economic data on which they normally feast, and the result is a bout of market indigestion. Volatility has picked up, confidence has thinned, and everyone is parsing stray remarks from Federal Reserve officials as if they were ancient runes.

The Federal Reserve itself appears split. John Williams of the New York Fed has sounded distinctly dovish, hinting that a near-term rate cut might be warranted. Susan Collins of the Boston Fed, by contrast, sees "no strong need" for a move in December. Investors have nevertheless shifted sharply: markets now price a 75% chance of a quarter-point cut next month, up from 42% only a week ago. Convincing the faction of policymakers resistant to easing may prove difficult, but markets are increasingly convinced it will happen anyway.

Futures reflect this ambiguity. Nasdaq-100 and S&P 500 contracts gained, while Dow futures wavered. The month has been unsettled enough already: an AI-fuelled boom looks exuberant, perhaps excessively so, raising fears of a bubble. Nvidia's strong forecast did little to calm nerves about inflated valuations. The S&P 500 and Nasdaq are both heading toward their worst month since March, when tariff anxieties last sparked a sell-off. Deutsche Bank, however, has offered a counterweight to the gloom, predicting the index could rise to 8,000 by end-2026, citing robust corporate earnings and AI-driven productivity gains.

The holiday shopping season is about to start and this will be a crucial test of whether American households remain as resilient as economists hope. Retail sales and producer-price data for September will trickle out, but with layoffs mounting and belated statistics pointing to rising unemployment, consumers have reason for caution. Tariffs have added to price pressures, even on modest goods like imported toys.

Yet the National Retail Federation expects U.S. holiday sales to exceed $1 trillion for the first time. Walmart raised its annual forecast last week, and shares ticked up in early trading. Gap and TJX have also posted strong results. Later this week, Dick's Sporting Goods and Best Buy will face their own judgment day. 

Even with the valuation jitters, enthusiasm for AI remains unbowed. Tesla climbed after Elon Musk announced work on the firm's next generation of AI chips for cars and data centres. Alphabet rose too. 

In the industrial sphere, Tyson Foods plans to close a major beef-processing plant, a casualty of America's cattle shortage. Insurers such as Centene, Oscar Health, Molina Healthcare and UnitedHealth rallied on talk that Trump's health plan could extend subsidies for two more years.

Elsewhere in the commodities world, oil prices slipped amid progress in Ukraine-Russia peace talks. European defense stocks fell. The US and Ukraine say they have drafted a "new version" of the peace plan unveiled by Washington on Friday, which gave Russia a prominent role. Secretary of State Marco Rubio expressed satisfaction with the progress and said that Donald Trump's November 27 deadline for an agreement is not set in stone. As is often the case, the White House seems to have overplayed its hand in order to obtain concessions beyond what it believed it could achieve through less brutal means.

In Europe, the mood is mixed. Bayer surged after positive trial results for a cardiovascular drug. Bristol-Myers Squibb rose in sympathy, as markets recalibrated expectations for the sector. 

For now, markets resemble a household preparing for a complicated holiday season: hopeful enough to start shopping, worried enough to keep the receipts, and waiting for missing information that ought to have arrived weeks ago. The Fed may cut in December, or it may not. Consumers may splurge, or they may hesitate. The economy, data-starved and rumour-fed, will have to muddle through until clarity returns.

On the macro agenda: in the United States, September producer prices and retail sales will be announced on Tuesday, November 25, while durable goods orders will be released on Wednesday, November 26. In Europe, Friday will be closely watched with the preliminary November inflation rates for France and Germany.

On the corporate agenda: Agilent, Alibaba, Dell, Compass, Deere, and The Kroger are among the latest big releases of the season.

In Asia Pacific, Hong Kong rebounded 2% and Australia 1.3% to start the week. Other markets are more mixed. India, Taiwan, and South Korea are up modestly. The Japanese market is closed for a public holiday. European leading indicators are riding Wall Street's momentum. Futures on Wall Street remain bullish.

Today's economic highlights:

On today's agenda: the Ifo business climate index, current assessment, and expectations in Germany; in the United States, the Chicago Fed National Activity Index. See the full calendar here.

  • Dollar index: 100,104
  • Gold: $4,076
  • Crude Oil (BRENT): $62.0 (WTI) $57.53
  • United States 10 years: 4.05%
  • BITCOIN: $86,022

In corporate news:

  • JD.com's supply-chain technology unit, Jingdong Industrials, has begun gauging interest for a long-anticipated $500 million Hong Kong IPO, aiming to boost its industrial capabilities and expand globally.
  • Merck urged shareholders to reject a deeply discounted mini-tender offer by Tutanota, which is more than 30% below market value.
  • Sysco announced that Global COO Greg Bertrand will become a senior adviser from January 1, ahead of his planned retirement.
  • IonQ has appointed former JPMorgan exec Marco Pistoia as CEO of its Italian unit, IonQ Italia, while he continues to lead its Special Projects group.
  • Alibaba's AI assistant app Qwen reached 10 million downloads in its first week, highlighting strong consumer interest and boosting its shares by 4.7%.
  • Revolut was valued at $75 billion following a secondary share sale involving major investors like Andreessen Horowitz and Nvidia's venture arm.
  • Google Cloud signed a multi-million dollar deal with NATO to provide AI-enabled sovereign cloud infrastructure.
  • U.S. companies, including Microsoft, Google, GM, and PepsiCo, maintained strong participation at COP30 climate talks despite political uncertainty at home.
  • Ant Group's AI coding app LingGuang Vibe hit 1 million downloads in four days, leading the mainland China App Store for free utilities.
  • Snap will allow Australian users to verify their age through bank-linked software to comply with an upcoming under-16 social media ban.
  • BHP canceled its $50 billion takeover offer for Anglo American due to copper market dynamics.
  • Bank of America upgraded SSAB to neutral from underperform.
  • Kohl's appointed Michael Bender as the permanent CEO.
  • CNN ended its partnership with Apple News, removing its stories from the platform.
  • Treasury Secretary Bessent expressed optimism about U.S. economic growth in 2026 despite inflation concerns.

Analyst Recommendations:

  • Gartner, Inc.: Baptista Research downgrades to hold from buy and reduces the target price from USD 298 to USD 260.40.
  • Inspire Medical Systems, Inc.: Stifel upgrades to buy from hold and raises the target price from USD 100 to USD 110.
  • International Paper Company: BNP Paribas upgrades to outperform from underperform with a price target raised from USD 34 to USD 44.
  • Mp Materials Corp.: BMO Capital Markets upgrades to outperform from market perform and reduces the target price from USD 76 to USD 75.
  • Tractor Supply Company: Jefferies upgrades to buy from hold and raises the target price from USD 58 to USD 64.
  • Vornado Realty Trust: JP Morgan upgrades to neutral from underweight with a target price of USD 41.
  • Alexandria Real Estate Equities, Inc.: BMO Capital Markets maintains its outperform rating and reduces the target price from USD 100 to USD 67.
  • Autonation, Inc.: Evercore ISI maintains its outperform rating and raises the target price from USD 240 to USD 300.
  • Broadcom Inc.: HSBC maintains its buy recommendation and raises the target price from USD 400 to USD 535.
  • Sempra: Citi maintains its neutral recommendation and raises the target price from USD 80 to USD 99.
  • The Mosaic Company: HSBC maintains its hold recommendation and reduces the target price from USD 35 to USD 26.