Issue #36 - Tech Selloffs, AI Jitters, and Global Growth Worries: What Investors Need to Know

What’s in this issue;

Global markets faced a turbulent week as tech and AI stocks led a broad selloff, Europe struggled under weak data and political uncertainty, and U.S. rate-cut hopes cooled amid the return of official economic data after the historic government shutdown.

From Nvidia’s earnings spotlight to China’s disappointing investment figures and the UK’s Budget reversal, investors are navigating heightened volatility and reassessing risk.

In this issue, we break down the market drivers, explore defensive positioning strategies, and highlight selective opportunities for navigating choppy global markets.

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Weekly Movement - Heatmaps

European stocks finished lower as a global selloff in big tech and chipmakers spread across markets, with weak eurozone data and ongoing geopolitical worries adding more pressure.

In the UK, the FTSE fell even further after the government’s Budget U-turn rattled confidence and pushed gilt yields higher, while doubts about a possible US rate cut added to the negative tone.

Over in the US, markets opened sharply lower as investors reassessed the chances of a December Federal Reserve cut, with tech stocks dragging the major indices down for another session.

What This Means for Investors

Expect more volatility in the near term – Tech-led selloffs, shifting rate-cut expectations, and political uncertainty (such as the UK Budget reversal) are likely to keep markets choppy across regions.

Rate-cut hopes are fading – With investors reassessing the likelihood of a December Fed cut, interest-rate–sensitive sectors (growth stocks, tech, real estate) may remain under pressure.

Defensive positioning may help – In uncertain environments, sectors like utilities, consumer staples, and healthcare tend to hold up better than high-valuation tech names.

Stay selective and focused on fundamentals – Strong earnings and stable balance sheets will matter more as markets rotate away from expensive growth names and reprice risk globally.

What is Moving the Markets This Week

Markets Stabilise After Volatility: The S&P 500 managed a small rebound (+0.1%) after last week’s selloff, helped by improving sentiment from the end of the longest U.S. government shutdown in history.

AI Trade Under Pressure: The AI sector continued to slide as concerns over stretched valuations hit tech again. The Global X AI & Tech ETF (AIQ) has fallen over 5% in two weeks.

Fed Pushes Back on Cuts: Several Fed officials warned against further rate cuts due to the lack of recent economic data—though data will resume next week now that the shutdown is over, including the key September jobs report.

Trade Developments: President Trump signed an order exempting items like coffee, cocoa, and beef from new tariffs to ease pressure on consumer food prices.

Big-Money Moves: 13F filings revealed Warren Buffett’s Berkshire Hathaway opened a new stake in Alphabet, while Third Point took positions in Norfolk Southern and Union Pacific as the rail giants pursue an $85B merger.

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Top Economic News This Week

China's Economic Data Disappoints with Slump in Investment

New data released from China indicated significant weakness in the world's second-largest economy, contributing to the global market anxiety. Figures showed an unprecedented decline in fixed-asset investment for the first 10 months of the year, alongside disappointing retail sales and industrial production figures. 

Context: The weak data points to persistent challenges in Chinese domestic demand and growth, which has broader implications for global trade and commodity markets.

Source: Asia report: Markets lower across the board as China data disappoints (Hargreaves Lansdown / Sharecast News)

UK Economy Faces Growth Slowdown and Rising Unemployment

Economic data from the UK highlighted a deteriorating domestic picture. GDP growth slowed sharply in the third quarter (Q3), and the unemployment rate rose to its highest level in four years. This has increased expectations that the Bank of England may cut interest rates sooner than previously anticipated.

Context: Weak growth, a loosening labor market, and signals that inflation has peaked are building pressure on the government's fiscal plans and monetary policy makers.

Source: UK unemployment rises to 5%, the highest level in four years (The Guardian)

🔭 The Week Ahead: Nvidia, Retail Giants, and the Return of U.S. Data

Wall Street enters a pivotal week with Nvidia (NVDA) front and center, as the world’s largest company reports earnings on Wednesday. Nvidia’s results have become full-market events, and this quarter carries even more weight: AI stocks have been under pressure, investors are questioning lofty valuations, and capital-spending sustainability is in doubt. Expect this print to set the tone for tech.

Retail heavyweights Walmart (WMT), Home Depot (HD), and Target (TGT) also deliver results, offering a high-quality read on the strength of the U.S. consumer heading into the holiday season.

Meanwhile, after the longest government shutdown in U.S. history, official economic data finally returns. The most anticipated release: the delayed September nonfarm payrolls report, arriving Thursday, which could shape expectations for the Fed’s next move.

💼 Earnings Calendar: Key Names to Watch

Monday, Nov 17

XPeng (XPEV), Brady (BRC), Magic (MGIC), LifeMD (LFMD)

Tuesday, Nov 18

Home Depot (HD), Medtronic (MDT), Baidu (BIDU), Futu (FUTU), Amer Sports (AS)

Wednesday, Nov 19

Nvidia (NVDA), Palo Alto Networks (PANW), Lowe’s (LOW), Target (TGT)

Thursday, Nov 20

Walmart (WMT), Intuit (INTU), Jacobs Solutions (J)

Friday, Nov 21

MINISO (MNSO), Inventiva (IVA)

Additional major reporters this week:

🌍 Key Economic Events

Monday

➡️ Slower growth keeps the BoJ cautious and can weigh on JPY and yields.

Tuesday

Wednesday

Thursday

Friday

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ICYMI

What Else is Happening?

The dominant themes outside of main economic releases are AI valuation jitters, government fiscal action/policy, and geopolitical/trade tensions.

AI Stock Valuation Concerns: Following a massive rally in technology and AI-related stocks (like Nvidia, Microsoft, Apple), investors are showing signs of profit-taking and re-evaluating valuations. Some analysts are questioning if the enthusiasm for AI is leading to an asset bubble, similar to the dot-com era, especially as the "real economy" lags.

Market/Investor Impact: This has caused a leadership rotation in the stock market, with mega-cap tech stocks underperforming in November. The fear of a potential AI bubble could lead to further volatility in the tech-heavy Nasdaq and push investors toward value, mid-cap, or international stocks for diversification.

US Government Funding and Economic Impact: The recent conclusion of the longest US government shutdown (via a funding bill extending operations to early 2026) has been a significant development.

Market/Investor Impact: While the end of the shutdown was initially cheered, the disruption is estimated to reduce fourth-quarter US economic growth by up to 1.5 percentage points. This heightens the pressure on upcoming economic data releases, which the Federal Reserve will use to decide on interest rates at their December meeting.

Crypto Market Volatility and Institutional Adoption: The cryptocurrency market has experienced significant volatility, with Bitcoin seeing major price swings and analysts debating its next resistance level. There are also notable developments in institutional integration.

Market/Investor Impact: News like VanEck filing for a spot Solana ETF with the SEC and a country's state fund allocating assets to Bitcoin suggests continued institutional curiosity and potential mainstreaming. This is positive for the sector but the overall volatility reinforces the asset class's high-risk nature.

UK Fiscal Policy Uncertainty (Autumn Budget): Speculation and potential last-minute changes surrounding the upcoming UK Autumn Budget (e.g., reports of ditching tax hike plans) are causing market uncertainty.

Market/Investor Impact: Bond yields spiked and the Sterling (GBP) currency fell as investors reacted to the policy confusion. Fiscal uncertainty typically translates to increased volatility in domestic equities and currency markets.

Interesting Stories

Mega-Cap Tech Business Models Are Shifting to Asset-Heavy

These companies are moving from "asset-light" to massive capital expenditure on data centers and AI infrastructure (upwards of $500B next year).

This shift weighs on margins and free cash flow over time, potentially impacting their high valuations and requiring investors to reassess long-term profitability.

Oil Prices Jump on Geopolitical Supply Disruption

A recent drone strike on a Russian oil depot in the Black Sea caused oil prices to surge. Higher energy prices are a critical driver of global inflation and can impact corporate costs across all sectors, complicating central bank efforts to manage inflation and potentially affecting consumer spending.

Merck to Buy Cidara Therapeutics in $9.2 Billion Deal

This is a major M&A deal in the biotechnology sector. Mergers and Acquisitions (M&A) activity indicates corporate confidence in future growth and often causes the stock of the acquired company (Cidara) to rocket, providing a significant, immediate return for investors holding that stock.

German Economy Faces Threat of Third Consecutive Year of Recession

Germany's continued economic struggle, attributed in part to bureaucracy and the country lagging in the AI race, highlights divergence within the Eurozone. Weak economic anchors in Europe can weigh on the Euro currency, increase political risk, and lower the earnings outlook for companies heavily exposed to the German/European industrial base.

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Disclaimer

Please remember this is not investment advice—I'm simply sharing my personal opinions and research. Always conduct your own due diligence before making any investment decisions.