Week ended November 21, 2025: risk assets battered

I will update the markets charts following Friday’s close.  In summary so far this week, risk assets have generally been battered across the world, led lower by U.S. tech shares and cryptocurrencies.  Bonds were better bid most of the week, with UST yields slightly lower across the curve.  The Dollar was a touch better, and gold a touch weaker.   

Here are the things that drove sentiment in markets this week. 

NVIDIA (NVDA) earnings

Rather than rehash the very strong results of NVDA for the 3Q26, you can find the press release here and the financial results (10Q) here, both from the company’s website.  The investor presentation is here. NVDA’s CEO Jensen Huang was extremely positive as usual on the outlook across the board, celebrating amazing quarterly results and an optimistic (understatement) outlook.   Different than meme-like stocks like TSLA and PLTR – both wildly over-valued for different reasons – NVDA backs up its more reasonable valuation with performance, quarter after quarter.  Here’s an extract from CEO Huang on the investor call, that sums up the outlook for this company, which is in the epicentre of the A.I. explosion:

“Blackwell [most sophisticated NVDA chip for A.I.] sales are off the charts, and cloud GPUs are sold out,” said Jensen Huang, founder and CEO of NVIDIA. “Compute demand keeps accelerating and compounding across training and inference — each growing exponentially. We’ve entered the virtuous cycle of AI. The AI ecosystem is scaling fast — with more new foundation model makers, more AI startups, across more industries, and in more countries. AI is going everywhere, doing everything, all at once.”

The stock popped instantly post-earnings in the after-market and opened nearly $10 higher ($195.95/share) on Thursday morning, but then began a fade that took the shares lower and lower, ultimately closing the day down just over 3% at $180.64/share.  It makes you wonder more and more about the bubble deflating in the crowded A.I. trade.  And speaking of which…

A.I. and risk assets

A.I. has been the narrative that has largely been responsible for pushing a number of U.S. stocks – none more than the hyper-scalers – to record levels.  For several months now, the talk of an A.I. bubble in stocks has made news but has largely been ignored by investors as tech stocks continued to climb.  However, it now appears that gravity is taking over, and stocks associated with A.I. are getting whacked.  Even NVDA could not hold onto its post-earnings gains, gapping up, reversing course and closing down intraday on Thursday, the day after stellar earnings and encouraging guidance. Investors have been conditioned to expect buy-the-dip investors to ride to the rescue, “fundamentals be-damned”, but I am sensing this time might be different.   Some meme and meme-like stocks, along with speculative assets like cryptocurrencies, are also in free fall with no support in sight.  The table below provides the performance of the hyper-scalers, along with some related retch / risk stocks.  It has been a rocky ride the last couple of weeks for investors in these names.

Does this mean A.I. will not ultimately be what the hype has suggested? Not at all, in my opinion, as I discussed in an article on my website last month regarding A.I..  Investors need to separate companies from their stock prices, and most of the “A.I. companies” (including private ones like OpenAI) will continue their operational mission to fundamentally change the world faster than we can imagine.  However, the alignment of investor expectations regarding returns on A.I. investment has now been brought to the forefront of concerns.  As usual, it is the bond market speaking the truth,.  Corporate bond investors are increasingly concerned about how even the most profitable companies in the world – MSFT, GOOG, AMZN and META – will raise the hundreds of billions of dollars in investment needed to roll-out A.I. which underpins the prices of these stocks.  We have seen this story play out before in other circumstances, including the “introduction’ of the internet.  The hyperbole and excitement around this new technology has gotten well cover-baked, and consolidation is in order to re-align expected returns to the substantial investment required. 

The situation could easily get worse – much worse in fact – before it gets better.  Hyper-scalers will probably need to dumb down their aggressive capital needs to bring them in line not only with expected A.I. demand, but with the availability to capital In the debt and equity capital markets to realise such aggressive roll-out.  Buy-the-dippers aside (a short term “fix” anyhow), I have little doubt that the same stocks that are getting punished now will overshoot on the way down, and there will be good entry points ahead.  My advice is not to panic and keep in mind that that speculative momentum investors – many of whom belong to the cohort of retail “X / Reddit” pump-and-dump crowd – need to be flushed out before the ship rights itself. 

Minutes from October 28-29 FOMC meeting

The minutes from the FOMC meeting on October 28-29 were released on Wednesday and can be found on the Fed’s website here.  Recall that the major decisions were to i) reduce the Federal Funds rate by 25bps and ii) stop balance sheet runoff (i.e. quantitative tightening) by December.  However, it was a nuanced meeting as the minutes highlight, with there being outliers on both sides of the rate decision.  Below is the extract from the minutes that certainly got investors’ attention:

“Most participants judged that further downward adjustments to the target range for the federal funds rate would likely be appropriate as the Committee moved to a more neutral policy stance over time, although several of these participants indicated that they did not necessarily view another 25 basis point reduction as likely to be appropriate at the December meeting. Several participants assessed that a further lowering of the target range for the federal funds rate could well be appropriate in December if the economy evolved about as they expected over the coming intermeeting period. Many participants suggested that, under their economic outlooks, it would likely be appropriate to keep the target range unchanged for the rest of the year.” 

As of this morning, the CME FedWatch Tool is projecting with a 65% probability that the Fed does not lower rates at the early December FOMC meeting.  I hope Treasury Secretary Bessent doesn’t get sacked by Mr Trump over this possible outcome, as the president alluded to in a rather amusing tongue-in-check diatribe at the U.S.–Saudi investment conferencethis week.  😂

Bitcoin decline – another crypto winter ahead?

With BTC now more than 30% below its high reached only six weeks ago, the financial press is suggesting that the collective catalysts that drove 2025’s strong performance of the benchmark cryptocurrency have now been fully digested. This means that there is little in the way of drivers left in the near term to lift BTC higher.  It’s not my thing, but I view the wobble as a sign that crypto’s claim to be a ”store of value” are evidence that this is far from true.  In addition, the adoption of BTC as a viable alternative to fiat currency is an oft-touted promise that still seems very far away from happening.  As with meme-like and some of the A.I.-related tech stocks, legitimate buyers need to step in and establish a floor under BTC.  However, so far, none have emerged, and nearly everything crypto is getting hammered. 

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