The first trading sessions of November coincided with a modest downturn in global stock indices, which is not surprising given that in the previous month, several markets saw their indices reach new all-time highs. <\/p>\n\n\n\n
The decline so far appears to be quite limited, less than 3% for the S&P 500 index, which closed last week at 6,728. The most significant technical support level is above 6,500, a target that would keep the correction within a fathomable 5% from the October high. In the short term, the upcoming resolution of the US government shutdown makes a continuation of the current correction unlikely. The essentially positive trend in international stock markets for the current year, despite persistent geopolitical uncertainties and the long-term effects of the tariff crisis, is primarily attributable to the forecast of an economic environment characterized by moderation in all relevant areas, including economic growth, inflation, and monetary policy. This observation is particularly pertinent for western stock markets, while the outlook for the vital Chinese market, whose indices top the annual rankings, now appears less encouraging as economic signals once again appear mixed. Indeed, despite the government’s commitment to supporting domestic demand, the manufacturing index is recording monthly declines, exports are languishing due to tariff issues, and debt deflation caused by the housing crisis is taking a long time to gradually be absorbed, which would suggest realizing some of the stock market gains achieved thus far. Therefore, overall, the positive underlying trend in stock markets is based on a satisfactory macroeconomic framework. However, clouds are gathering over the outlook, starting with the US, where the Fed may have underestimated the true needs of its credit system.<\/p>\n\n\n\n
Indeed, in his report of October 14, Fed Governor Powell announced the end of the restrictive monetary policy phase (QT); The Fed’s QE, launched in 2023, has been rather mild in practice, as the reduction of the Central Bank’s balance sheet was accompanied by the monetization of public debt through the systematic underwriting of US Treasury bonds. This decision could prove to be flawed, as the evident tensions building in the credit system, evinced by the rise in swap rates, are difficult to reconcile with the forecast that the Fed’s liquidity provision to the system will decrease by at least \u20ac300 billion over the next nine months, despite the recently announced policy shift. Therefore, an important piece is missing: the prospect of initiating yet another round of monetary stimulus (QE), without which the banking system could soon find itself in a situation similar to that of spring 2023, when several regional banks needed to be bailed out. Consequently, from a tactical perspective, a partial reduction in equity exposure appears justified over the medium term, taking advantage of the likely short-term rebound in stock prices following the consolidation of last week.<\/p>\n\n\n\n
Nicola Bravetti Data Source<\/em>: Bloomberg<\/em><\/p>\n\n\n\n \u201cThis report cannot \u2013 nor can \u2013 be consider a solicitation to invest in financial instruments.\u201d<\/strong><\/em><\/p>\n","protected":false},"excerpt":{"rendered":" The first trading sessions of November coincided with a modest downturn in global stock indices, which is not surprising given that in the previous month, several markets saw their indices reach new all-time highs. <\/p>\n","protected":false},"author":1,"featured_media":5828,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,43],"tags":[30,17,26,15,44,18,19],"class_list":["post-5891","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-markobs","category-observer-2025","tag-bravetti","tag-bravoadvisory","tag-lugano","tag-market","tag-planb","tag-switzerland","tag-ticino"],"_links":{"self":[{"href":"https:\/\/www.bravettinicola.ch\/index.php?rest_route=\/wp\/v2\/posts\/5891","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bravettinicola.ch\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bravettinicola.ch\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bravettinicola.ch\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bravettinicola.ch\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=5891"}],"version-history":[{"count":1,"href":"https:\/\/www.bravettinicola.ch\/index.php?rest_route=\/wp\/v2\/posts\/5891\/revisions"}],"predecessor-version":[{"id":5892,"href":"https:\/\/www.bravettinicola.ch\/index.php?rest_route=\/wp\/v2\/posts\/5891\/revisions\/5892"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.bravettinicola.ch\/index.php?rest_route=\/wp\/v2\/media\/5828"}],"wp:attachment":[{"href":"https:\/\/www.bravettinicola.ch\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=5891"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bravettinicola.ch\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=5891"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bravettinicola.ch\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=5891"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}