Last week, the markets experienced a bout of volatility due to multiple and varied overreactions. Gold and silver soared before cooling off on Friday. The initial panic over US regional banks ended as quickly as it began. Reactions to quarterly earnings announcements led to fireworks or memorable crashes. In short, there was volatility and disparate performances.

The most striking difference was between France's CAC 40 and Germany's DAX. The former gained 3.2% in five days, its best weekly performance since the week of April 21. The latter lost 1.7%. This considerable gap (5%) can be explained by the beginning of a rotation in strategies. Encouraging figures from LVMH boosted the Paris index and the entire cyclical sector. In recent quarters, the CAC 40 had suffered in comparison with other indices because its main driver, luxury goods, was sluggish. It is a little too early to talk of a real turnaround, but weekly gains for LVMH (11%), Hermès (7.7%), L'Oréal (5.7%) and EssilorLuxottica (14.3%) have done the Paris market a world of good. In contrast, Frankfurt was gloomy, with heavy profit-taking affecting the military and banking sectors. The looming ceasefire in the Middle East and the resumption of talks between the United States and Russia on the Ukrainian conflict gave investors an excuse to take profits on a defense sector that has been extremely prolific on the stock market this year.

Meanwhile, Wall Street has overcome all the obstacles in its path: fears of an AI bubble, the government shutdown, tariffs, tensions over regional banks… Nothing has prevented the indices from returning to within striking distance of the record highs abandoned the previous week. It must be said, however, that Donald Trump, as usual, softened his tone towards Beijing after threatening China with the worst possible consequences a week earlier. His Treasury Secretary Scott Bessent is due to hold talks this week with Chinese Vice Premier He Lifeng in an attempt to resolve some or all of the points of friction between the two countries.

Here are the top news not to miss at the start of the week:

  • S&P downgraded France's sovereign rating to A+/A-1 due to the political situation. It is the second of the three major agencies to downgrade France below the symbolic “double A” rating.
  • The standoff over the federal budget continues in the United States. The shutdown has been going on for 20 days.
  • Trump has urged Zelensky to accept Putin's terms or be "destroyed" by Russia. The Ukrainian president has called for an end to the fighting before any talks can take place.
  • The road to peace in the Middle East remains fraught with obstacles. Israel has struck Hamas and suspended aid deliveries to Gaza after an ambush that killed two of its soldiers.
  • On the corporate agenda: it's time for the first big week of Q3 results. Among the headliners are L'Oréal, Hermès, Unicredit, Barclays, SAP, Thales, and Roche in Europe. GE Aerospace, Tesla, Netflix, Intel, and Procter & Gamble in the United States.
  • On the macro agenda: October's flash PMI indicators will be released on Friday. This is also the day chosen by the US Bureau of Labor Statistics to release September's inflation figures, which could not be released on time due to the shutdown.

There is quite a lot of news coming out of Asia this morning. In Japan, the Liberal Democratic Party has reached an agreement with the Japan Innovation Party to form a coalition government, bringing Sanae Takaichi closer to the top job. She would be the first female prime minister in the country's history. She is seen as favorable to fiscal stimulus and low interest rates, which is reviving strategies based on these themes in Japan.

In China, quarterly GDP came in close to expectations, although its pace shows a slowdown compared to previous quarters. The statistics, published overnight, precede a four-day meeting of Chinese political leaders on the preparation of the five-year plan to be unveiled next March. As usual, investors will speculate on measures to stimulate the Chinese economy. And as usual, they are likely to be disappointed.

The week is off to a strong start in Asia-Pacific. Japan jumped 2.8% after Takaichi's strong comeback. Hong Kong is not far behind with a 2.4% increase. Taiwan and South Korea are up 1.5%, while India is content with 0.5% gains. This is slightly more than Australia, which brings up the rear with +0.4%. European stock markets are expected to rise in early trading.

Today's economic highlights:

On today's agenda: China's quarterly, annual, and year-to-date GDP; industrial production and retail sales in China; the PPI in Germany; the leading index in the United States. See the full calendar here.

  • GBP / USD: US$1.34
  • Gold: US$4,255.19
  • Crude Oil (BRENT): US$60.92
  • United States 10 years: 4.02%
  • BITCOIN: US$111,115

In corporate news:

  • Sed Energy Holdings Plc commenced operations at Edrill-2 under a multi-year contract with PTTEP.
  • UK pension giants committed 3 billion pounds to investments in private markets.
  • The UK housing market slowed down, with minimal increases in asking prices during the autumn sales period before the budget announcement.
  • Roche Holding AG received FDA approval for Tecentriq for bladder cancer and Gazyva/Gazyvaro for lupus nephritis.
  • Holcim AG plans to acquire Xella for 1.85 billion euros.
  • Swedish Orphan Biovitrum AB (publ) increased its annual forecast and announced a write-down of 6.6 billion SEK.
  • ThyssenKrupp Marine Systems is set to make its stock market debut in Frankfurt on Monday.
  • BayWa is engaging with new investors to discuss the sale of Cefetra.
  • ENAV secured a contract to provide and install a digital control tower system at Senai Airport in Malaysia.
  • Vow ASA announced a lower-than-expected EBITDA for the third quarter of 2025.
  • Q-Linea reported increased revenue and reduced net loss for Q3 2025.
  • Novo Nordisk received FDA approval for Rybelsus to reduce heart risks in type 2 diabetes patients.
  • The Cooper Companies saw activist investor Jana Partners acquire a stake to advocate for strategic alternatives.
  • Germany intends to purchase an additional 15 F-35 jets from the US for 2.5 billion euros.
  • TGS ASA secured a contract for an OBN 4D survey in the Gulf of America.

See more news from UK listed companies here

Analyst Recommendations:

  • Big Yellow Group Plc: Peel Hunt maintains its add recommendation and raises the target price from GBP 11 to GBP 13.10.
  • Marks & Spencer Group Plc: RBC Capital downgrades to sector perform from outperform with a price target raised from GBX 375 to GBX 400.
  • Pearson Plc: Barclays maintains its equalweight recommendation and raises the target price from GBP 11.50 to GBP 11.75.
  • Travis Perkins Plc: Barclays maintains its overweight recommendation and reduces the target price from GBP 8.30 to GBP 7.70.
  • Informa Plc: Goldman Sachs maintains its buy recommendation and raises the target price from GBX 1140 to GBX 1200.
  • Pearson Plc: JP Morgan maintains its overweight recommendation and raises the target price from GBP 13.10 to GBP 13.30.
  • Ibstock Plc: Jefferies maintains its buy recommendation and reduces the target price from GBX 188 to GBX 143.
  • Mondi Plc: JP Morgan maintains its neutral recommendation and reduces the target price from ZAR 274 to ZAR 197.
  • Energean Plc: Jefferies maintains its hold recommendation and reduces the target price from GBX 940 to GBX 930.
  • Ithaca Energy Plc: Jefferies upgrades to buy from hold with a price target raised from GBX 145 to GBX 220.