Stay up to date with the latest market trends, economic shifts and key financial developments across the UK, US and Asia – giving you clear insights to support client conversations.
This week's headlines
- AI market wobble– tech stocks led global markets to plunge on fears around record high valuations and excessive AI spending, despite a mid-week boost from strong Nvidia earnings.
- UK inflation moderates – The annual inflation rate eased to 3.6% in October, a fall from 3.8% in the month prior. The slowdown was led by housing and utilities, namely gas and electricity.
- US unemployment increases – despite job growth, the unemployment rate unexpectedly rose to 4.4% in September from a month prior, its highest rate since October 2021.
- Japanese inflation edges up – inflation rose to 3% in October, a 0.1% rise on September’s figures as prices increased for electricity, transport and household items.
- China-Japan spat – tensions rose between the two nations over pro-Taiwan comments made by the new Japanese Prime Minister. This led to China suspending seafood imports from Japan, postponing film releases and encouraging its citizens to cancel any Japanese holidays.
What this means for financial advisers and clients
The latest US jobs report, long delayed by the government shutdown, showed a 119,000 rise in nonfarm payrolls. However, despite these positive numbers, the total unemployment rate still rose as a further 219,000 people became unemployed. This creates a mixed picture of the US’s economic health and highlights the fragility of the labour market. With US officials saying the full October’s jobs report won’t be published, as data wasn’t collected during the shutdown, this is the last set of numbers the Federal Reserve will see before their December meeting. Meaning the likelihood of another interest rate cut is far from clear.
Chart of the week - a K-shaped US economy
Source: Apollo
Why this matters
While a high-level view of the US economy may look surprisingly resilient, a closer look points to a growing split in fortunes between the wealthy and relatively poorer consumers, something economists refer to as a K-shaped economy. In the US this is being influenced by higher-income households becoming wealthier through stock appreciation, high fixed income returns and rising house prices, while relatively poorer households without such assets are struggling under high inflation and low wage growth.
This point is highlighted in the chart above. Typically, higher levels of wage growth are seen by those on the lowest wages (the orange bar), and this has been the case until last year. However, from late 2024 onwards we’ve seen a dramatic shift where lower-income households are now seeing the smallest levels of wage growth, and those on the highest incomes (green line) are seeing the largest gains.
While this pattern could have long-term implications for inequality and unrest, the recent market impact has seen gains in sectors favoured by those on higher incomes, such as the consumer discretionary sector, while sectors such as consumer staples have fallen.
The Markets
UK defensiveness limits losses
The UK followed global markets down on heavy sell-offs early in the week, before staging a defence and energy led recovery to recoup some ground later on.
US tech-led plunge
Losses were particularly high on the tech-heavy NASDAQ as AI-linked stocks sold off. And while the market was initially boosted by strong Nvidia results, the stock’s fortunes quickly reversed course on Thursday to finish in the red.
Asia suffers from spreading AI concerns
AI concerns weren’t limited to the US, as Chinese chipmakers and tech names such as Alibaba and Baidu also fell, dragging down Emerging Market indices. This was a pattern repeated in Japan’s tech-heavy Nikkei 225, which was also fighting against the country’s China fall-out.
Oil slides on fears of oversupply
Gold narrowly fell on modest rises in interest rate cut expectations in the US. Oil prices also fell on the increased likelihood of a Ukraine peace deal, which would lead to lifted sanctions on Russia and increase global oversupplies.
| | Weekly Change | YtD Change |
|---|---|---|
| FTSE 100 | -1.71% | 20.54% |
| FTSE 250 | -1.91% | 7.21% |
| S&P 500 | -2.54% | 7.18% |
| NASDAQ | -3.45% | 10.19% |
| FTSE Developed Europe Ex-UK | -2.52% | 21.66% |
| FTSE Emerging Markets | -1.19% | 18.31% |
| FTSE Japan | -4.32% | 14.39% |
| Brent Crude | -1.57% | -15.09% |
| Gold Spot | -0.17% | 55.35% |
| UK 10yr Gilt yield | +12bps | +7bps |
| US 10yr Treasury yield | -5bps | -47bps |
Source: FE FundInfo, goldprice.org, exchangerates.org.uk, investing.com and finance.yahoo.com. GBP returns as at close of business on Thursday 20th November 2025.
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This article is for financial professionals only. Any information contained within is of a general nature and should not be construed as a form of personal recommendation or financial advice. Nor is the information to be considered an offer or solicitation to deal in any financial instrument or to engage in any investment service or activity. Parmenion accepts no duty of care or liability for loss arising from any person acting, or refraining from acting, as a result of any information contained within this article. All investment carries risk. The value of investments, and the income from them, can go down as well as up and investors may get back less than they put in. Past performance is not a reliable indicator of future returns.
