Financial Markets: A Month of Fragile Balance Before December's Shift
After a November marked by a steep correction followed by a swift rebound, the markets are entering the end of the year with strengthened positions and an overall favorable macroeconomic scenario.
For Mary-Sol Michel, head of discretionary management at Swiss Life Gestion Privée, the outlook remains positive, driven by stronger-than-expected growth and the prospect of a US monetary easing beginning in December.
Major indices show a near-zero change for the month, but this apparent stability masks a chaotic sequence. Technology stocks linked to artificial intelligence, among the year's best performers, initially faced a sharp correction: between November 1 and November 21, the S&P 500 lost 5%, and the Nasdaq fell 8%, dragging Europe down with it. The turnaround was equally swift. The end of the US shutdown and the anticipation of a Fed rate cut at its December 10 meeting allowed markets to regain ground in the last ten days of the month. However, not all stocks participated in the rebound: Nvidia ended November down 13%, while the Nasdaq was still down 1.5% over the entire period.
Beyond market movements, macroeconomic fundamentals continue to deliver positive surprises. Growth in 2025, which economists had forecast to be much weaker in the spring, is now expected to reach 1.4% in the eurozone and 1.9% in the United States. Upward revisions continue, particularly for 2026, in both the US and China. Core inflation is receding and stabilizing around 2.4% in the eurozone and 2.8% in the United States, a notable development given the new US tariffs.
A Positive Outlook for 2026
For Swiss Life Private Management, the upcoming weeks are expected to remain favorable, especially given that December and January have historically been positive for stocks. The recent correction has helped clear excesses; investor positions now seem more balanced, and the anticipated drop in US interest rates provides immediate support. The likely arrival of a more accommodative Fed chairman in 2026 further strengthens this scenario.
The technology sector, however, is becoming more segmented. Semiconductor and cloud players continue to show strong earnings growth, while some software publishers and IT service providers like Accenture and Salesforce have seen significant declines since the start of the year. Unlike the dot-com bubble of 1999, the current increases are based on tangible profits: companies exposed to AI are seeing earnings rise by 22%, with valuations remaining moderate relative to expectations. The « Magnificent Seven » are trading at 33 times next year's earnings, far from the multiples of 70 observed at the onset of the dot-com bust.
In a more favorable yet selective environment, Swiss Life Private Management continues its tactical adjustments. Its technology exposures have been reduced for several months; at the beginning of December, the company is prioritizing the strengthening of emerging market stocks, supported by attractive valuations, still low international holdings, and more diversified earnings momentum.
This content has been automatically translated using artificial intelligence. While we strive for accuracy, some nuances may differ from the original French version.
