Markets dip as investor sentiment weakens

Hi, welcome to market weekend review for the week ending November 7th, 2025. I'm Paul Idleman from Investment Strategy here at Russell Investments in our Seattle Washington headquarters. And yeah, this weekend financial markets a bit of a more downbeat tone. uh global equities uh are trading down roughly one and a half% through Thursday's close and the US is underperforming in a down market with the tech heavy NASDAQ index for example trading off nearly 3% on the week. Uh this looks more like a sentiment shift than a fundamental shift in our view. Uh fundamentals this week have actually been pretty mixed on balanced from an earnings perspective. Russia continued to see strength from US large cap corporates. Um the third quarter earning season uh is still underway here. Uh as of uh the first week of November, we're tracking third quarter earnings growth for the S&P 500 index of actually almost 17% now on a year ago basis for the third quarter, which is well ahead of initial consensus estimates that were closer to uh 8% growth. So it doesn't seem like earnings disappointments are really um a catalyst here. And then from a macro perspective, also pretty mixed. On Wednesday, we had some more favorable news where private sector employment growth as reported by the payroll processing company ADP bounced back from uh showing a contraction in jobs to modestly positive job growth. Again, uh that data series has taken on heightened importance during this period of government shutdown with the sort of headline official uh non-form payroll releases being uh put on hold here uh while the government is closed. Elsewhere, uh we had a service sector survey from the Institute for Supply Management that also rebounded and is showing modest positive growth in the period. The one I guess yellow flag uh this week from an economic perspective was a compilation of layoff announcements for the month of October from an organization called Challenger Gray. Actually the biggest uh uh showing for layoffs for the month of October in over 20 years. We think that series is actually pretty noisy. And just this afternoon on Thursday in Seattle, we were able to tally up all the sort of state level data on initial jobless claims even with the federal government being shut down. And that aggregate sort of national picture on initial jobless claims uh still looks pretty low and benign from a historical perspective. So I think our best read uh that we can do right now lacking the government data is still a mosaic that looks like a low higher low fire labor market and that doesn't seem like it's really changed dramatically over the last call it one to two months. Um from a more global perspective uh this week we did have a central bank meeting from the Bank of England in a narrow uh 5 to4 vote. The Bank of England decided to keep interest rates unchanged. But it was interesting that uh they commented uh in expectation now that inflation has peaked in the United Kingdom and has some guidance in favor of potentially thinking about a rate cut going ahead into their next uh policy meeting in the month of uh December. that helped to take some of the pressure out of the long end of the UK guilt curve uh this week. And the 10-year guilt, for example, is actually trading towards the bottom of its range uh for the year of um 2025, which is obviously positive for holders of uh fixed income assets in the United Kingdom. So, I think that's it in terms of a summary for this week. downward pressure on global markets and US tech in particular, mixed fundamentals out of the United States, strong earnings, uh, balanced economic data, and then a Bank of England looks like it's getting closer to cutting interest rates in the month of December. Uh, thanks for tuning in and we hope to see you again next time. Thanks a lot. Bye-bye Hi, I'm Sophie Antaly, head of portfolio and business consulting at Russell Investments. If you liked what you just saw and heard, consider subscribing to our YouTube channel or check us out on LinkedIn. Thanks for tuning in.