Market navigator: week of 24 November 2025

Summary

• What happened last week: Mixed US employment data and Fed policy signals created uncertainty, whilst Japan announced fiscal stimulus and UK economic indicators pointed to deceleration.
• Markets in focus: US technology stocks experienced acute volatility amid valuation concerns, Asian equities retreated broadly, and the Japanese yen extended weakness against the dollar.
• The week ahead: Critical US inflation data and China purchasing managers' indices will shape monetary policy expectations and growth assessments.

What happened last week

• Mixed US labour data: September's non-farm payroll report showed employment gains of 119,000, while unemployment rose to 4.4% — the highest since 2021. July and August figures were revised down by 33,000 combined. However, four-week average jobless claims through mid-November declined versus late September. These mixed signals may prove insufficient to convince the Federal Reserve (Fed) that a December rate cut is necessary.
• Japan's gigantic fiscal stimulus: Prime Minister Takaichi announced a ¥21.3 trillion stimulus package, allocating ¥11.7 trillion to price relief including energy subsidies and family support. The administration projects this will reduce inflation by 0.7 percentage points, challenging conventional beliefs regarding fiscal spending's inflationary impact.
• US rate cut odds: October's Federal Open Market Committee (FOMC) minutes showed many members favoured holding rates through year-end, causing December cut probability to fall from 50% to 30%. However, this reversed after New York Fed President Williams signalled scope for near-term adjustment, pushing cut odds back to 70%. Cut expectations will drive risk sentiments.
• Concerns on the UK economy: The composite purchasing managers' index (PMI) fell from 52.2 to 50.5 in November, signalling slowdown. Job losses accelerated and manufacturing gains couldn't offset service sector weakness. Retail sales declined 1.1% month-on-month (MoM) ahead of Black Friday promotions, while inflation fell for the first time since March to 3.6%.

Markets in focus

Volatility spiked in US equity markets

US equity markets experienced heightened turbulence as investors reassessed artificial intelligence (AI) sector valuations alongside Fed monetary policy trajectories. The S&P 500 and Dow Jones Industrial Average both declined 1.9% over the week, whilst the Nasdaq 100 plummeted 3.1%, positioning for its weakest monthly performance since March.

Thursday witnessed particularly acute volatility, with the Nasdaq 100 initially advancing 2.4% before reversing sharply to close 2.4% lower — a 1,200-point intraday swing. The Volatility Index (VIX) spiked to 28.3 intraday before retreating to current levels around 23.

Market anxiety centred on technology sector valuations amid aggressive capital expenditure plans and mounting debt issuance. Amazon's first US dollar bond offering in three years attracted USD 80 billion in demand, ultimately raising USD 15 billion. Combined with offerings from Alphabet, Meta, Microsoft and Oracle, these hyperscalers have issued $121 billion in high-grade bonds this year.

Nvidia's third-quarter results last Wednesday demonstrated over 60% year-on-year (YoY) growth in both revenue and earnings, accompanied by constructive forward guidance. However, strong fundamental performance proved insufficient to alleviate valuation concerns. Although Nvidia shares initially surged 5% in extended trading, gains reversed entirely by Thursday's close. Elevated accounts receivable and inventory levels prompted additional investor scrutiny.

Technical analysis of the US Tech 100 index reveals an Elliott Wave corrective pattern, with the decline since 11 November resembling Wave C. Given Wave C typically matches or exceeds Wave A in magnitude, the drawdown may extend towards 24,000. Friday's rebound could signal budding recovery, though confirmation requires a decisive move above the 50-day moving average (MA) at 25,061. Critical support resides around 23,000; a breach would materially increase bear market probability.

Figure 1: US Tech 100 index (daily) price chart

Hang Seng Index posts worst week since April

Diminished global risk appetite significantly impacted Hong Kong equity markets, with year-end profit-taking intensifying pressure. The Hang Seng Index (HSI) tumbled 5.1% — its steepest weekly decline since April's 'Liberation Day' sell-off — though maintaining gains exceeding 25% year-to-date. Technology sector weakness was more pronounced, with the Hang Seng Tech Index plunging 7.2%.

Concerns regarding US AI sector valuations and capital spending reverberated across Asian markets. Despite delivering results exceeding expectations and demonstrating robust AI demand growth, Baidu and Lenovo shares both declined approximately 8% over the week. Alibaba retreated nearly 5% ahead of this week's earnings announcement.

On the other hand, Chinese authorities reportedly are considering additional property market stimulus measures, including mortgage subsidies for first-time homebuyers and enhanced tax rebates for existing mortgage holders. Mainland property developers China Overseas Land and Longfor Group reversed weekly losses following these reports.

The index's breach below its 50-day MA combined with subdued momentum indicated by the relative strength index (RSI) suggests continuation of the downtrend. The HSI appears positioned for a corrective Wave C pattern within Elliott Wave theory, targeting approximately 24,800. Significant support lies at the 200-day MA of 24,323. Any recovery will encounter resistance around 26,250 (50-day MA); a decisive breakthrough above this level would be required to reverse the bearish trend.

Figure 2: Hang Seng Index (daily) price chart

Japanese yen extends weakness

The yen continued its decline against the dollar, surpassing 157 — its weakest level in 10 months — before partially recovering. The currency has been pressured by fluctuating expectations for a December Fed rate reduction alongside mounting fiscal concerns as Prime Minister Takaichi implements the substantial stimulus package. The 20-year government bond yield reached its highest level since 1999.

Japan's core inflation, excluding fresh food prices, accelerated to 3.0% in October from 2.9% in September. Higher grain costs and surging import prices attributable to yen weakness drove the acceleration. Markets increasingly question the Bank of Japan's (BoJ) policy independence, as the central bank maintains its cautious stance despite core inflation exceeding the 2% target for 43 consecutive months. The BoJ cites the need for additional evidence of sustainable domestic demand and wage growth, alongside clarity regarding US tariff implications. Prime Minister Takaichi has urged continued BoJ caution.

Finance Minister Katayama's strong warnings regarding sharp, unidirectional yen movements and acknowledgment that intervention remains an option strengthen the case for potential currency intervention. However, such interventions cannot be deployed arbitrarily given limited foreign reserves and requires coordination with fiscal and monetary policy to prove effective. Japan expended approximately USD 100 billion across four interventions in 2024 when USD/JPY approached 160. As of end-September 2025, Japan's foreign currency reserves stood at USD 1148 billion.

USD/JPY has appreciated over 12% since its 22 April trough, with momentum accelerating over the past six weeks. The decisive break above February's high demonstrates robust momentum. Absent central bank intervention, we anticipate brief consolidation at current levels before the pair extends towards the 158.9–160 resistance zone, though the RSI indicates overbought conditions. Should yen-supportive factors emerge, USD/JPY will find support at the 20-day MA around 154.

Figure 3: USD/JPY (daily) price chart

The week ahead

The forthcoming week presents crucial inflation data that will directly influence Fed policy deliberations, alongside key economic indicators from China and Australia that may reshape growth expectations across major economies.

Tuesday's US producer price index (PPI) assumes particular significance as it is likely to be the final critical inflation gauge available before the Fed's December policy meeting. Markets anticipate a 0.3% MoM increase in September's PPI, reversing the previous month's 0.1% decline. This rebound would reflect businesses adjusting pricing structures to accommodate persistent cost pressures, particularly in the goods sector. The reading carries heightened importance following the postponement of October's personal consumption expenditures (PCE) report, originally scheduled for 26 November, which removes a key datapoint from policymakers' assessment framework. A substantially stronger-than-expected PPI outcome could reinforce concerns that inflationary pressures remain entrenched, potentially constraining the Fed's capacity to reduce rates in December despite recent labour market softening.

Australian inflation data on Wednesday will clarify the Reserve Bank of Australia's (RBA) policy path — the trimmed mean inflation unexpectedly rose to 3% in Q3. The central bank is expecting the inflation rate to peak in the next few months and is therefore in a wait-and-see mode before considering further rate reduction.

Sunday's China PMI readings will shed light on the domestic economy after a range of lacklustre trade, retail and investment data two weeks ago. The manufacturing component has remained below the 50 expansion threshold since April, registering 49.0 in October. The non-manufacturing index, which encompasses services and construction, hovers around 50, suggesting momentum is subdued despite policy support measures. Markets will scrutinise whether the extended US-China trade truce has stabilised export demand and whether domestic service activities have resumed following the Golden Week holiday. A further deterioration in either index would intensify concerns regarding China's economic trajectory and its implications for global growth.

On the corporate front, Chinese technology companies deliver key earnings insights this week. Alibaba reports Tuesday, with investors scrutinising whether cloud computing momentum has sustained growth despite broader consumption challenges. Meituan's Friday results will reveal how the food delivery sector leader is doing under extreme competitive pressures that drove profit down 97% previously.

Figure 4: China's PMI trend

Key macro events this week

Tuesday 25 November 2025

• 9.15pm (HK time) — US ADP employment change weekly: previous -2.5K
• 9.30pm (HK time) — US PPI MoM (September): previous -0.1%, consensus 0.3%
• 9.30pm (HK time) — US retail sales MoM (September): previous 0.6%, consensus 0.4%

Wednesday 26 November 2025

• 8.30am (HK time) — Australia inflation rate YoY (October): previous 3.5%
• 9.30pm (HK time) — US durable goods orders MoM (September): previous 2.9%, consensus 0.3%
• 9.30pm (HK time) — US initial jobless claims (week of 22 November): previous 220K

Friday 28 November 2025

• 7.30am (HK time) — Japan unemployment rate (October): previous 2.6%, consensus 2.5%
• 7.30am (HK time) — Japan retail sales YoY (October): previous 0.5%, consensus 0.8%

Sunday 30 November 2025

• 9.30am (HK time) — China NBS manufacturing PMI (November): previous 49.0
• 9.30am (HK time) — China NBS non-manufacturing PMI (November): previous 50.1

Key corporate earnings

(in local exchange time)

Tuesday 25 November 2025

• Alibaba
• Analog Devices
• Dell

Wednesday 26 November 2025

• Deere

Friday 28 November 2025

• Meituan

Source: Trading Economics, Nasdaq, LSEG (as of 22 November 2025)