US consumer sentiment weakens amid high prices and falling markets
US consumer sentiment fell in November to one of the lowest levels on record as Americans grow gloomier about their personal financial outlook.
The University of Michigan’s index of consumer morale has dropped to 51 for November, down from 53.6 in October.
The recent stock market falls appear to have dented sentiment among rich Americans, while other citizens are suffering from high prices in the shops.
Surveys of Consumers director Joanne Hsu explains:
After the federal shutdown ended, sentiment lifted slightly from its mid-month reading. However, consumers remain frustrated about the persistence of high prices and weakening incomes.
This month, current personal finances and buying conditions for durables both plunged more than 10%, whereas expectations for the future improved modestly.
By the end of the month, sentiment for consumers with the largest stock holdings lost the gains seen at the preliminary reading. This group’s sentiment dropped about 2 index points from October, likely a consequence of the stock market declines seen over the past two weeks.
Key events
European stocks post biggest weekly drop since July
Earlier today, European stock markets recorded their worst week in three months.
The pan-European STOXX 600 index fell 0.3% to 562.1 points today, after hitting its lowest since late September earlier in the session. It also posted its biggest weekly drop since late July.
Wall Street rallies on hopes of December rate cut
Hopes that the US central bank could cut interest rates as soon as next month have pushed shares higher on Wall Street today.
New York Fed president John Williams, a voting member of the Federal Open Market Committee (which sets interest rates), said the central bank can still cut rates “in the near term” without putting its inflation goal at risk.
Williams said:
“I view monetary policy as being modestly restrictive…Therefore, I still see room for a further adjustment in the near term to the target range for the federal funds rate to move the stance of policy closer to the range of neutral.”
Reuters reports that a December rate cut is now seen as a 70% change, up from around 37% chance seen earlier in the day, according to the CME FedWatch Tool.
However, Boston Fed President Susan Collins, has told CNBC that policy was “in the right place”, which indicates scepticism about the need for another rate cut.
The US S&P 500 share index is now up over 1%, or 70 points, at 6,609 points.
US October inflation report cancelled
Disappointingly, we may never find out exactly how fast prices rose in US shops last month.
The Bureau of Labor Statistics has canceled the release of October’s consumer price report because the government shutdown prevented their staff from collecting data.
The BLS said in a statement:
“BLS is unable to retroactively collect these data. For a few indexes, BLS uses nonsurvey data sources instead of survey data to make the index calculations,”
“BLS is able to retroactively acquire most of the nonsurvey data for October. Where possible, BLS will publish October 2025 values for these series with the release of November 2025 data.”
Stocks have turned higher on Wall Street too, where the Dow Jones industrial average is up 1%.
The Dow has gained 469 points to 46,221 points, while the tech-focused Nasdaq is up 0.6%.
After a bruising session, London’s blue-chip share index has closed slightly higher tonight.
The FTSE 100 share index has closed 12 points higher at 9,539 points, a gain of 0.13% as it recovered from this morning’s one-month low.
US consumer sentiment weakens amid high prices and falling markets
US consumer sentiment fell in November to one of the lowest levels on record as Americans grow gloomier about their personal financial outlook.
The University of Michigan’s index of consumer morale has dropped to 51 for November, down from 53.6 in October.
The recent stock market falls appear to have dented sentiment among rich Americans, while other citizens are suffering from high prices in the shops.
Surveys of Consumers director Joanne Hsu explains:
After the federal shutdown ended, sentiment lifted slightly from its mid-month reading. However, consumers remain frustrated about the persistence of high prices and weakening incomes.
This month, current personal finances and buying conditions for durables both plunged more than 10%, whereas expectations for the future improved modestly.
By the end of the month, sentiment for consumers with the largest stock holdings lost the gains seen at the preliminary reading. This group’s sentiment dropped about 2 index points from October, likely a consequence of the stock market declines seen over the past two weeks.
The UK stock market has slipped back in recent days since hitting record highs last week, amid the wider market sell-off.
Emma Wall, chief investment strategist at Hargreaves Lansdown, says:
“After a brief respite yesterday morning, following AI-juggernaut Nvidia’s expectation busting results, global markets are sliding once again.
The tech giant posted third-quarter results overnight on Wednesday and the revenue and earnings beat saw the stock rally 4% on opening, dragging not just the NASDAQ up, but setting a risk-on stance in global stock markets.
The euphoria proved short-lived, and today’s markets are a sea of red. Asian markets closed down around 2% on average, and Europe and UK stocks are on track for worst week since tariff tantrum in April.
The FTSE 100 is flat at the time of writing trading at 9,517 but is down near 400 points from the highs of last week.
Babcock optimistic about Type 31 warship export orders
Jasper Jolly
The boss of FTSE 100 defence company Babcock has said that the prospects of export orders for Type 31 warships are “looking very positive”, in a possible boost for Scotland shipyard workers.
Babcock International is building Type 31 frigates for the Royal Navy, but it is in talks with Sweden, Denmark and Indonesia about possible orders, to be built in Scotland.
David Lockwood, Babcock’s chief executive, told the Guardian: “If you look at UK navy orders, we’re in a very good position,” while potential exports to European and Asian markets are “looking very positive”.
Export orders for the Type 31 would likely secure employment at Babcock’s shipyard in Rosyth, near Edinburgh, for several more years. Lockwood said that Rosyth was “secure as long as it’s competitive”, but added that it is “one of the best invested yards in Europe”.
Babcock on Friday reported a 5% increase in revenues to £2.5bn, and beat forecasts for cash generation – a crucial measure for defence companies running long contracts.
The company’s share price initially dropped as much as 6% on Friday, but eventually recovered to rise by 2%. Lockwood said:
There’s no shiny bauble, but everything is moving in the right direction. As a business now we’re just firing properly.
Lockwood also said that re-opening of a submarine repair dock in Devonport should increase availability of nuclear submarines to the Royal Navy. That would be a welcome prospect for the government, after years of maintenance problems that have forced ever-longer tours on submariners.
He said:
I certainly think it will increase availability of submarines. There’s no doubt we can refit faster now with better facilities.
Wall Street opens higher
Wall Street’s main indexes have just opened higher, as a measure of calm returns to the New York stock market.
After yesterday’s rout, trading looks to be calmer today (so far!).
The Dow Jones Industrial Average rose 56.4 points, or 0.12%, to 45,808.65 at the open. The S&P 500 gained 0.26% and the tech-focused Nasdaq Composite picked up 0.38%.
Bitcoin looking like fool’s gold after November slump
There was a fashion, a few years ago, of labelling bitcoin as ‘digital gold’.
It’s looking more like iron pyrite today, though, given its recent slide. Bitcoin is now down by a third from its record high of $126,223 set in early October.
As covered earlier, Bitcoin hit its lowest since April today, at below $82,000.
Gold, in contrast, has held up better in recent weeks – it’s around 7% off its record high last month, and trading flat today.
Chris Iggo, chair of AXA IM Investment Institute, comments:
Profit taking might be a common theme in risk markets. Not only are equities off their highs (4.6% for the MSCI World, 7.8% for the Nasdaq Composite and 8.5% for the small cap Russell 4000) but gold has lost some of its shine and Bitcoin has undergone what can only be described as a collapse (33% below its recent high price versus the US dollar)
US real wages stagnated in September, new data shows.
The US Labor Department has reported that while there was a nominal increase of 0.2% in average hourly earnings, that was wiped out by inflation.
Real average weekly earnings decreased 0.1 percent over the month due to no change in real average hourly earnings combined with no change in the average workweek, it adds.
Sarah Butler
Asos has turned to online stylists powered by artificial intelligence as it attempts to win back customers and reverse a fall in sales.
The online fashion retailer said sales had fallen 12% in the year to 31 August, and City analysts predicted another year of declining sales ahead.
The company is testing “Styled for You”, which uses AI trained on its database of 100,000 curated outfits to suggest items that could go together with those a shopper has already bought or has searched.
If a shopper signed up to its loyalty programme is seeking advice on buying a dress, for example, the AI stylist on the Asos website may suggest how the item can be complemented with a jacket and heels or given a more casual look with a sweater and trainers.
The choices offered up are picked from Asos ranges based on consumer trends, and the shopper’s history and preferences are expressed when they sign up to its app. Separately, the site already offers suggestions for all shoppers via an automated feed.
Caution is dominating trading across global markets today, reports Bob Savage, head of markets macro strategy at BNY.
He explains:
This is now the worst week for equities since April, and one that has contained the largest inter-day reversal in shares for the NASDAQ on record. Government spending isn’t turning sentiment. Japan’s new PM unveiled $112bn in stimulus, but the country’s equities still fell more than 2.4%. South Korea dropped even further, with the Kospi shedding 3.8%.
The MSCI rebalancing on Monday, with a shift toward tech, isn’t sufficient to redress the situation either. Budgets will remain a key consideration for the market, with the U.K.’s turn next week key for GBP and gilts. If there is to be a reversal of the reversal, rates will be key. Yesterday’s U.S. jobs report for September didn’t help clarify Fed easing expectations for December.
Mexico’s economy shrinks in Q3
Mexico’s economy is on the brink of recession after new data showed activity shrank in the last quarter.
Mexican GDP shrank by 0.3% in the July-September quarter, the country’s statistics body reported, a time when trade war uncertainty was hitting growth.
If Mexico’s economy were to suffer a contraction in the fourth-quarter, it would fall into a technical recession.
Investors are feeling somewhat “bewildered” after the u-turn that hit markets yesterday, reports Saxo UK investor strategist Neil Wilson.
Stocks on course for worst week since April, SPX [the S&P 500 share index yesterday] suffers biggest intraday swing since April and Bitcoin at lowest since April…but tariffs are not the issue. Is this the shakeout to clear the decks for seasonal rally starting next week or do we think the technicals are just looking too challenging right now?
Investors are feeling a bit bewildered after a sharp reversal in fortunes in yesterday’s US session. Nvidia had rallied at the open and positive stock futures continued into the cash session to see the S&P 500 up 1.9% at its highs before a sudden switch saw sellers take over. The broad market ended down 1.56% for the day in a 235-pt swing from top to bottom. The Nasdaq saw even greater volatility – erasing a gain of 2.6% to finish the day down 2.15%. April 8 was the last time we’ve seen such a swing. It was, in short, a tough day for bulls and a tough day for the Nvidia-will-save-the-market narrative.
Trading may be calmer on Wall Street when today’s session begins in around two and a half hour’s time.
The futures market indicates the Dow Jones Industrial Average could rise by 0.33%, while the broader S&P 500 index is seen opening flat.
Emerging market stocks have been caught up in the sell-off that began in Wall Street yesterday.
MSCI’s index for emerging market equities has tumbled 2.7%, Reuters reports, putting it on track for its worst week since 7 April, when Donald Trump’s ‘Liberation Day’ tariffs sparked a rout.
Strategist: The stock market has peaked, and a three-year downturn is starting,
One market strategist has warned that the stock market has peaked, and a three-year downturn is starting.
The global liquidity cycle — best described as the flow of funds through world financial markets — is drying up and this is bearish for equities, says a veteran strategist.
“We’ve been in a bit of a bubble and liquidity is basically being pulled away,” said Michael Howell, chief executive of CrossBorder Capital, a London research firm, in an interview with hedge fund manager Erik Townsend on the MacroVoices podcast. He thinks the speculative phase of the U.S. market has peaked, and there’s going to be a downturn for stocks that could last two or three years.
ECB’s Christine Lagarde: European growth is linked to ‘disappearing’ world
The president of the European Central Bank has warned that Europe’s economic prosperity is geared towards a disappearing world.
Christine Lagarde told the 35th Frankfurt European Banking Congress this morning that Europe’s economy was vulnerable due to changes it the global economy – such as the fracturing of the post-war global order – that have put strain on its export-led growth model.
As Lagarde put it:
Europe’s vulnerabilities stem from having a growth model geared towards a world that is gradually disappearing.
We embraced globalisation more than any other advanced economy. In the two decades before the pandemic, external trade as a share of GDP almost doubled in the EU, while in the United States it barely moved.
This deep integration brought significant benefits: the number of jobs supported by EU exports rose by 75%, reaching almost 40 million – and for many years, this was a source of resilience.
But today, that same openness has become a vulnerability. Exports have become a far less reliable engine of growth, reflecting the changing global landscape.
