Market Insights November 24, 2025

End of the consolidation phase in sight?

US equity markets remained under considerable pressure last week, unsettled by the release of the Federal Reserve's October meeting minutes. These revealed significant divisions within the committee regarding the continuation of monetary easing. However, in our view, the concerns expressed by Jerome Powell and his colleagues are already outdated. The disruptions linked to the government shutdown have now subsided, and the macroeconomic data required by the Fed should begin to be published normally in the coming days. The gradual weakening of the labour market and the absence of any upward inflationary drift should, in our view, provide the ideal backdrop for a new cut in key interest rates in December.

The likelihood of such a scenario is already rising sharply at the start of this week following encouraging remarks from the New York Fed President over the weekend, which should lead to a rebound in risk assets over the coming days. Investors may now choose to focus on Nvidia’s outstanding earnings results, which were largely overlooked by markets last week, but which dispel fears of a potential bubble surrounding artificial intelligence investments.

Europe doesn’t have the Magnificent Seven… but it does have its banks!

In Europe, earnings season is drawing to a close, and the overall picture is broadly positive. Around 20% of companies reported results exceeding expectations, while only 14% significantly disappointed, a markedly better figure than the historical average. It has thus been a satisfactory season, even if comparisons with the United States appear somewhat less flattering. This is hardly surprising: the technology sector enjoyed a particularly stellar earnings season across the Atlantic, and its weight in US indices (35%, excluding affiliated giants like Amazon or Meta) far surpasses its footprint in Europe (8%).

Yet while Europe lacks its own Magnificent Seven, it can rely on another set of champions: its banks.

Once again, the banking sector has delivered one of the strongest earnings seasons on the continent. Profit estimates continue to be revised upward, and banks have outperformed expectations in 20 of the last 21 quarters, a truly remarkable level of consistency. This momentum is underpinned by a now-favourable yield curve, improved returns on equity, generous capital distributions, and a regulatory environment that is either stable or becoming less restrictive.

This is clearly reflected in the markets: banking stocks are up nearly 50% this year, making them the top-performing sector in Europe and positioning them to compete confidently with the Magnificent Seven.

The question now is simple: can this outperformance continue? In our view, the potential remains intact. Management teams continue to express confidence for the quarters ahead.

The still-gradual economic recovery, combined with central bank rate cuts and stimulus measures, should drive demand for credit. Moreover, cost discipline remains a core priority, with AI increasingly reinforcing these efforts. Contrary to market fears, non-performing loans remain under control, and despite the sharp rally year-to-date, valuations in the sector remain attractive. Dividend yields and share buyback programmes continue to provide strong support for the sector’s performance.

This week’s figure : 30 €/MWh

European gas prices fall below the €30 threshold, hitting their lowest level in over a year.

This movement reflects renewed hopes for peace in Ukraine, as President Zelensky appears increasingly open to making concessions to Russia under mounting pressure from the United States.