Economic Data and Market Reactions - Weaker-than-expected U.S. economic data has increased expectations for a Federal Reserve interest rate cut next month, positively impacting global equities as the Thanksgiving holiday approaches [1] - U.S. retail sales rose by 0.2% in September, falling short of the 0.4% forecast by economists, following a 0.6% gain in August [6] - The Conference Board's consumer confidence index dropped to 88.7, marking the lowest level since April, indicating weakening consumer sentiment [6] UK Budget and Political Context - British finance minister Rachel Reeves is expected to announce significant tax increases in her budget, which is critical for her credibility with bond investors and lawmakers [3] - The Labour government's unpopularity may present challenges for Reeves as she navigates the budget announcement [5] Market Trends and Sector Performance - U.S. tech companies' share of S&P 500 earnings has been declining, raising concerns about the disconnect between their stock prices and underlying profit trends, despite their market value remaining high [4]

Market Overview - The U.S. stock market has rebounded significantly, adding over $2.1 trillion in value in less than three trading sessions, with the S&P 500 surging more than 250 points from last week's lows [1] - The S&P 500 closed at 6,765, up nearly 1% for the day, and is now just over 2% away from record territory [1] Technology Sector - Major technology companies, particularly Alphabet and Apple, have been key drivers of the market rebound, with Alphabet's AI model Gemini 3 boosting confidence in its competitive position [2] - Apple has reinforced its role in the tech sector through U.S. manufacturing investments and advancements in AI and silicon development [2] - Nvidia has faced challenges as Meta considers switching to Google AI chips, raising concerns about Nvidia's market dominance, yet the overall tech sector remains resilient [3] AI and Corporate Spending - The AI boom continues to be a significant market driver, supported by strong earnings from mega-cap tech companies and increasing corporate investments in AI infrastructure [4] Foreign Investment - Foreign investors have contributed significantly to the market rally, with an unprecedented $647 billion invested in U.S. equities over the past 12 months, reflecting global confidence in American corporate earnings and advanced technologies [5][7] - The Nasdaq and S&P 500 have shown strong year-to-date gains, bolstered by positive earnings and resilient consumer demand [7]

Market Performance - US stocks experienced an upward movement, with the Dow Jones Industrial Average rising by 0.8% and the S&P 500 also increasing by 0.8%. The Nasdaq Composite added nearly 1% following a significant 660-point gain in the Dow on Tuesday [1] - Stocks are on track for their fourth consecutive advance, driven by technology stocks, with Alphabet reaching a record high before slightly declining [2] Federal Reserve Insights - Investors are closely monitoring factors influencing the Federal Reserve's upcoming policy decisions, particularly in light of a data drought caused by the US government shutdown. The Fed's Beige Book is expected to provide insights into regional economic performance [3] - There is an over 80% probability priced in for a quarter-point rate cut in December, following disappointing September readings on retail sales and wholesale inflation. Initial jobless claims fell unexpectedly to their lowest level since April [4] Central Bank Leadership - Speculation regarding the leadership of the Federal Reserve is intensifying, with five finalists on President Trump's shortlist to replace Chair Jerome Powell. Kevin Hassett has emerged as the frontrunner as the selection process nears its conclusion [5] Earnings Reports - Earnings reports peaked on Tuesday, with major retailers exceeding expectations. However, Deere & Company saw its shares decline after providing a full-year outlook that fell short of market expectations [6]

Core Insights - Alphabet Inc. is approaching a market capitalization of $4 trillion, positioning it alongside tech giants like Apple and Nvidia [1][6] - The launch of Gemini 3.0 and strategic partnerships with Meta Platforms and NATO are key drivers of Alphabet's growth [1][6] Financial Metrics Comparison - Apple's P/E ratio stands at 37.15, indicating strong investor expectations for growth, while Alphabet's strategic initiatives may positively influence its own P/E ratio [2] - Apple has a price-to-sales ratio of 9.88 and an enterprise value to sales ratio of 10.07, suggesting robust revenue generation; Alphabet's partnerships could similarly enhance its sales figures [3] - Apple's debt-to-equity ratio is 1.52, reflecting higher debt reliance; Alphabet's initiatives may allow for better equity leverage and reduced debt needs [4] - Apple's current ratio of 0.89 indicates more liabilities than assets; Alphabet's focus on innovation and partnerships could strengthen its asset base and current ratio [5]

Core Insights - The significant increase in stock prices over recent years has been largely driven by substantial corporate cash spent on share buybacks by major tech companies, totaling $1.1 trillion over five years [1][2] Group 1: Share Buyback Overview - From Q3 2020 to Q3 2025, six companies—Apple, Alphabet, Microsoft, Oracle, Meta, and Nvidia—spent a total of $1.1 trillion on share buybacks, reflecting actual expenditures rather than future announcements [2] - Apple led the share buyback efforts with $437 billion, followed by Alphabet at $281 billion, Meta at $151 billion, Microsoft at $107 billion, and Nvidia at $87 billion [4] Group 2: Funding and Debt Implications - Some share buybacks were financed through borrowed funds, resulting in significant debt on the balance sheets of these companies: Apple has $112 billion, Microsoft $120 billion, Meta $50 billion, and Alphabet $30 billion [5] - Nvidia has notably increased its buyback program in 2024, spending $43 billion on share buybacks over the past four quarters [4] Group 3: Strategic Shifts - Amazon has ceased its share buyback program since 2022 to allocate funds towards capital expenditures, particularly in AI infrastructure, indicating a potential trend for other companies to follow [3] - The ongoing competition in AI spending among these companies suggests a strategic shift where the focus may move from share buybacks to investments in technology [5]

Core Insights - Alphabet is the best-performing stock among the Magnificent Seven, with shares up approximately 68% year-to-date, significantly outperforming Nvidia's 35% return [3][5] - Berkshire Hathaway made a notable investment in Alphabet, acquiring 17.8 million shares valued at nearly $5.7 billion, which is atypical for the firm known for value-oriented investments [2][5] - Analysts are generally optimistic about Alphabet, with many raising price targets following better-than-expected earnings, indicating strong performance and potential in AI [6][8] Investment Activity - Berkshire Hathaway's purchase of Alphabet stock is unusual as the firm typically invests in undervalued companies with stable businesses [3][5] - The investment aligns with Alphabet's strong performance and growing reputation in the AI sector, particularly after positive endorsements from industry leaders [2][3] Analyst Sentiment - Analysts from JPMorgan and Wedbush have raised their price targets for Alphabet, citing strong quarterly results and a favorable outlook for AI search capabilities [6][7] - The majority of analysts maintain a "buy" rating on Alphabet, with an average price target of $324, indicating confidence in the stock's continued growth [8] Financial Performance - Alphabet has increased its full-year capital expenditures guidance to over $90 billion, focusing on data centers and AI model development, reflecting its commitment to growth in the tech sector [7] - The positive earnings report and subsequent analyst upgrades suggest that Alphabet is well-positioned to capitalize on AI opportunities, countering previous market skepticism [6][7]

Core Insights - Tech Contrarians has achieved a realized return of 65.8% on closed positions since inception, indicating strong performance in investment strategies [1] Group 1: Company Overview - Tech Stock Pros consists of three former technology sector engineers with extensive experience in tech investments [2] - The company operates Tech Contrarians, which provides institutional-level company research tailored for individual investors [2] Group 2: Services Offered - Tech Contrarians offers a live portfolio with quarterly updates and bi-weekly newsletters, aiming to simplify technology sector investing [2] - The group provides exclusive insights into high-focus stocks, curated watchlists, and one-on-one portfolio consultations [1]

Group 1 - Megacap tech firms and AI hyperscalers like Amazon, Alphabet, Oracle, and Meta have issued nearly $90 billion in bonds, surpassing their total bond sales over the last 40 months [1] - Investors are demanding higher yields from AI bonds compared to previous months, indicating a shift in market sentiment [1] - The significant amount of investment-grade issuance from these firms may affect the overall investment-grade landscape, complicating the uncertain rate outlook amid a divided Federal Reserve and persistent inflation [2] Group 2 - Active ETFs are positioned to address risks associated with the proliferation of AI bonds, offering advantages over passive bond funds [3] - Active ETFs provide greater tax efficiency and flexibility due to their creation/redemption mechanism, which avoids taxable events [3] - The active investing freedom of ETFs allows them to adapt to market shifts and focus on fundamental research, providing a deeper understanding of issuer health [4]

24 November 2025 | 5:00AM GMT Portfolio Strategy Research GOAL: GLOBAL OPPORTUNITY ASSET LOCATOR Goldilocks meets some bears - protecting our equity OW into 2026 This report is intended for distribution to GS institutional clients only. Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to www.gs.com/research/hedge.html. Christian Mueller-Glissmann, CFA +44(20)7774-171 ...

Core Viewpoint - U.S. stocks experienced a significant rebound, with the Nasdaq Composite index achieving its best performance since May after nearly entering correction territory the previous week [1] Group 1 - The Nasdaq Composite index had its best session since May [1] - The index was close to slipping into correction territory last week [1]