Equity Market Updates
Market Daily
04/12/2025
Macro Update:
Weak US ADP jobs data reinforces expectations of Fed rate cut
US private payrolls fell by 32,000 in November, according to ADP. This is the steepest decline since March 2023, with the drop almost entirely driven by small businesses (the segment accounts for 48% of US private sector employment). Meanwhile, the ISM showed US services activity expanded slightly in November with the headline index rising from 52.4 to 52.6, while the index for prices paid eased to a 7-month low, a potentially positive sign for inflation. Signs of a slower job market and easing inflation give room for the Fed to cut rates further. The next data focus is on the September PCE print due tomorrow.
Main Upcoming Macro Indicators
US EQUITIES
US stocks advanced on Wednesday as a flurry of economic data kept expectations elevated for an interest rate cut by the Fed next week.
EUROPE EQUITIES
European shares ended higher on Wednesday, aided by gains in technology that offset declines in financials.
HK EQUITIES
Hong Kong stocks declined on Wednesday as China’s slowing services growth added to worries about an economy grappling with a prolonged property slump.
Microsoft (MSFT US)
Shares of Microsoft slid on Wednesday after a report stating that the company has lowered expectations for demand in its cloud unit’s AI models and agents.
The report specifically cited several divisions in Microsoft lowering quotas for salespeople to increase sales of certain AI products after many missed their targets in the latest fiscal year.
A Microsoft spokesperson denied the report, stating that the report “inaccurately combines the concepts of growth and sales quotas.”
The market will closely watch further developments surrounding this topic going forward.
MARKET CONSENSUS: 71 BUYS, 2 HOLDS, AVERAGE TP USD631.42
Salesforce (CRM US)
Enterprise software company Salesforce on Wednesday provided an outlook for revenue in the current fiscal quarter that exceeded analyst estimates, pointing to strong demand for its AI tools. This will likely be supportive for Salesforce’s share price in the medium to long term.
The company expects revenue to be between USD11.1bln and 11.2bln in the quarter ending January 2026, higher than market estimates of USD10.9bln. Current remaining performance obligations, a measure of bookings, is also forecasted to increase about 15% vs. 10% expected.
In terms of FY3Q results, Salesforce’s revenue stood at USD10.26bln vs. USD10.28bln expected, while adjusted EPS was at USD3.25 vs. USD2.86 expected.
MARKET CONSENSUS: 51 BUYS, 12 HOLDS, 1 SELL, AVERAGE TP USD325.92
Micron Technology (MU US)
Memory chipmaker Micron said on Wednesday it will exit its consumer business as it doubles down on advanced memory chips used in AI data centers.
The company’s move comes against a backdrop of worldwide strain in memory supply chains, with tight availability of semiconductors ranging from flash chips used in smartphones to advanced high-bandwidth memory, or HBM, employed in AI data centers.
Micron will continue product shipments through the consumer channel until February 2026.
MARKET CONSENSUS: 42 BUYS, 4 HOLDS, 2 SELLS, AVERAGE TP USD228.42
Rivian (RIVN US)
The US National Highway Traffic Safety Administration (NHTSA) said on Wednesday that Rivian plans to recall over 34,000 US vehicles due to a damaged seat belt pretension cable that may fail to properly restrain the driver's seat belt, increasing crash injury risk.
As part of the fix, Rivian has issued an over-the-air software update for certain 2022–2025 EDV models and will inspect and replace the driver's seat belt pretension assembly if needed.
This recall could potentially hurt Rivian’s reputation and thus put downward pressure to its top- and bottom-line going forward.
MARKET CONSENSUS: 9 BUYS, 14 HOLDS, 4 SELLS, AVERAGE TP USD14.64
Airbus (AIR FP)
European planemaker Airbus lowered its commercial aircraft delivery target to around 790 aircraft for 2025 on Wednesday due to a supplier quality issue impacting fuselage panels on its A320 family of jets.
Airbus engineers have found defects on a wider set of A320 fuselage panels as they prepare to inspect hundreds of jets, around 40% of which are still in assembly lines. The affected parts have the wrong thickness following a process of stretching and milling carried out by Seville-based Sofitec Aero.
The world's largest planemaker had previously expected to deliver around 820 commercial aircraft this year. The popular A320 overtook the Boeing 737 in October as the most-delivered model in history.
MARKET CONSENSUS: 20 BUYS, 7 HOLDS, 1 SELL, AVERAGE TP EUR226
Earnings Announcements
US Market
Dollar General, SentinelOne, Docusign, Hewlett Packard Enterprise
European Market
Aurubis AG
HK - China Market
-
Global Indices Changes (%)
Fixed Income Market Updates
It was reported that Indonesia government will look to continue maintaining a presence in the bond markets denominated in various currencies such as CNH, JPY, AUD after their inaugural bond issuances in AUD and CNH this year. This will present good opportunities for investors looking for non-USD denominated bonds for diversification.
European Bank Coco (AT1)
Prices of European Bank AT1 bonds continued to grind higher as markets opened on a firm note yesterday. Asian investors had been buying USD-denominated AT1 bonds while EUR-denominated AT1 bonds saw more two-ways trading. We are selective in the AT1 space. While we find some AT1 bonds offer favourable carry, there are some trading at expensive levels.
Asia Investment Grade (IG)
Trading activity was skewed to better buying as macroeconomic sentiment stabilised. Asset managers continued to rebalancing their portfolios and we saw more switches out of short-dated bonds into longer-dates ones. High-beta bonds were in demand as well as these bonds offer better carry. Spreads were generally 1-2bps tighter.
Asia High Yield (HY)
In the Indian HY space, non-bank financials were rather active. Muthoot complex was in demand while investors sold Shriram and Sammaan Capital. Trading flows in renewables were rather balanced with sellers in Continuum and Renew Power while Greenko was in demand. We remain cautious in the HY space and would prefer to be conservative especially as we approach year-end with liquidity thinning.
Forex Market Updates
The US Dollar slumped towards 98.87 on Wednesday on the back of soft employment data and as markets increased their bets on Hassett as the next Fed Chair.
USD
The US Dollar Index fell 0.46% to close at 98.87, pressured by weaker than expected ADP employment data and market chatter that Kevin Hassett, known for his dovish stance and support for rate cuts would replace Fed Chair Jerome Powell. The ADP employment reported a 32,000 drop in private payrolls for November, far below forecasts that projected a 10,000 increase. The ISM Services PMI also offered little comfort holding at 52.6 with the underlying components still pointing to slowing orders, soft employment and elevated input prices. Money markets are now pricing in a 89% chance of a 25bp cut in December which would weigh on the US dollar. Up next, markets will watch for the Initial Jobless Claims later today and the Core PCE Price Index and the UoM Consumer Sentiment Survey due on Friday.
The Dollar Index may see further weakness towards the 98.00 handle moving forward.
CAD
The Canadian Dollar posted slight gains of 0.13% against the US dollar yesterday with the USDCAD closing at 1.395, supported by a weaker US dollar, firmer risk sentiment and stronger commodity prices. A narrowing of the interest rate differentials in the coming year between the Fed and the BoC could drive additional support to the Loonie. On the domestic front, Q3 labor productivity came in higher than expected at 0.9% qoq, beating the -1.0% reading in the previous quarter by a large margin and the forecast of 0.4%. Market focus now shifts to Friday’s labor market report, a key input ahead of BoC’s December 10 policy decision. Consensus expects unemployment rate to tick up to 7% from 6.9% in October although labor force levels are likely to remain unchanged.
The loonie may trade range bound for now between 1.3950 and 1.4110.
CHF
The Swiss Franc gained 0.41% towards the 0.8000 level yesterday to close at 0.7996 as the Franc strengthened against the US dollar on the back of weaker employment data from the US. In Switzerland, inflation data for November was mixed, whilst CPI fell 0.2% mom as expected, annual inflation slowed to 0.0% yoy, undershooting the 0.1% forecast and coming into the lower range of the SNB’s 0-2% target. These subdued readings reinforce expectations that the SNB will leave rates unchanged on its 11th December meeting, with Chair Martin Schlegel recently noting that the bar for returning to negative rates remains “high”. Despite the drag from elevated tariffs on the Swiss economy, the Swiss Franc’s safe-haven appeal and Switzerland’s strong current account position suggests further gains for the currency.
The Swiss Franc has room for to strengthen further against the US dollar and may trade towards the 0.7950 level.
XAU
Gold was hardly moved on Wednesday, holding above the 4,200 mark as weak ADP data showing job losses keeps markets positioned for further Fed easing. Additionally, speculation that Kevin Hassent favors further rate cuts will be the next Fed Chair after Powell has added pressure to the dollar and in turn provided support for the yellow metal. The World Gold Council also reported that central banks globally had purchased 53 tons of gold in October, one of its strongest monthly flows in 2025. Technically, Gold’s uptrend remains intact although a close below 4,150 could risk a deeper pullback. On the other hand, a break above 4,250 would pave a way for gold to test 4,300 and its record high of 4,381.
Gold bulls are likely to have the 4,300/oz level in their sights amid continued USD weakness.
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