Monthly Market Monitor November 2026
In a Nutshell
Chart of the Month
France has surpassed a mark that arguably nobody in the ‘Grande Nation’ is proud of: the yield on the country’s 10-year sovereign bonds climbed above 5 % in October for the first time since 2002. Although the energy crisis and central bank rate hikes have caused yields to rise in many places this year, France has broken away from the field: the spread versus German Bunds has widened to its highest level since the euro crisis, and France today is paying more to borrow than the (one-time) problem children Italy and Greece are, though Greece has a much larg-
er public debt load amounting to more than 140 % of its annual gross domestic product. The crucial factor, however, is the direction: Athens is paying down debt and has a budget surplus while Paris is running a deficit of more than 5 % of GDP and has to issue around EUR 310 billion worth of bonds this year. On top of that, a government without a legislative majority is wrestling with a splintered parliament over the 2027 budget. That has its price: the French government’s annual interest expense on its national debt looks set to climb to above EUR 72 billion by 2027.
However, it would be exaggerated to speak of a euro crisis 2.0: there has been no contagion to other Eurozone countries thus far. Moreover, the European Central Bank could intervene in the event of a selloff of French bonds, though it is unknown if it would actually do that. In any case, the solution must come from France because what the market is punishing is less the size of the debt and more the lack of an ability to correct it.
Vive la différence | France’s risk premium on the rise Spread on 10-year French government bonds over German equivalents, in basis points
200
160
120
80
40
0 2006
2010
2014
2018
2022
2026
Sources: Bloomberg, Kaiser Partner Privatbank
The yield on the country’s 10-year sovereign bonds climbed above 5 % in October for the first time since 2002.
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Kaiser Partner Privatbank AG
Macro Radar
Taking the pulse of economic activity Midterms – a rebuke for Trump
Donald Trump will be facing a more contentious domestic policy front in the second half of his term in office: the Democrats won a majority in both the House of Representatives and the Senate in the midterm elections on November 3. That did not come as a surprise. The party of the sitting president usually loses seats in Congress in midterm elections. This time the situation was aggravated by growing public dissatisfaction with the cost of living: the Iran conflict has particularly driven up energy prices while high rent costs and weak purchasing power growth are additionally straining household budgets. Trump’s public approval ratings tumbled in October to the lowest levels recorded during his two terms in office. Trump will become a proverbial “lame duck” from January onward: he needs the Democrats in order to get laws passed, the way is paved for investigations of the Trump administration to commence, and the Senate can block presidential appointments. However, Trump can continue to put his stamp on matters such as tariffs, deregulation, and foreign policy. Wrangling over the federal budget will become more rancorous, though, raising the risk of a renewed government shutdown. But the fundamental alignment of US economic policy won’t change much for the time being.
Central banks put interest rates on hold Energy prices are driving up headline inflation on both sides of the Atlantic. The inflation rate at last look clocked in at 3.7 % in the USA and 3.8 % in the Eurozone. Core inflation was much more moderate, at 2.6 % in the USA and 2.5 % in the Eurozone, and a 2022-style widespread burst of inflation is not looming. The crucial factor is whether the higher energy costs will
become lastingly entrenched in core inflation via wages and services prices. The US Federal Reserve left its policy interest rate unchanged in October, but markets are anticipating a rate hike in December. The future path is uncertain, though: subdued wage growth argues against hiking interest rates while the sustained upward pressure on prices argues in favor of it. The European Central Bank is also facing a tradeoff. After raising interest rates in June and September, the ECB left its deposit rate at 2.5 % in October. The increase in energy costs is making everyday life more expensive and is putting a strain on purchasing power and economic growth. The inflation rate in Switzerland came in at 1 %, climbing to its highest level in over two years. Since the Swiss National Bank’s policy rate currently stands at 0 %, the prospect of a rate hike is moving back into the spotlight. Central bankers are looking through energy costs for the time being as long as the upward pressure on prices doesn’t spread.
World economy: Stable, but not immune The world economy is growing remarkably ordinarily. Despite the Iran conflict and US tariffs, growth is close to its long-term sustainable rate because more accommodative fiscal policies and the AI investment boom have offset the strains thus far. However, downside risks are mounting. Fuel and natural gas prices today are almost as high as they were at their peak levels in spring 2026. Moreover, long-term yields in industrialized countries are around a percentage point higher than at the start of this year, which is likely to slow construction, consumer spending, and investment expenditures with a time lag. The turmoil in France is putting a strain on growth in Europe, and the stimulus from the AI boom is likely to top out soon. China, meanwhile, remains dependent on exports: the country’s real estate sector and Chinese investment spending are contracting, and consumer spending is hardly making headway.
Energy makes the difference | Core inflation remains comparatively low Year-on-year inflation and core inflation in USA and Eurozone 12% 10% 8% 6% 4% 2% 0% -2% 2019
2020 USA: Inflation
2021 2022 USA: Core Inflation
2023 2024 Eurozone: Inflation
2025 2026 Eurozone: Core Inflation
Sources: Bloomberg, Kaiser Partner Privatbank
Europe, and the stimulus from the AI boom is likely to top out soon.
Monthly Market Monitor – November 2026
3
Asset Allocation
Notes from the Investment Committee October bestowed Wall Street with new highs at first, but from the middle of the month onward, AI euphoria increasingly came under pressure. Doubts about whether the huge investments will ever pay off weighed on technology stocks. Beneath the surface, a rotation set in: value stocks and defensive
sectors were in demand, as were US Treasury bonds, the yields on which pulled back noticeably from their recent highs. Given the US midterm elections, the Iran conflict, and the ongoing uncertainty about energy prices, volatility looks set to stay elevated in the weeks ahead.
Asset Allocation Monitor –
+
Cash
Equities
Fixed Income
Global
Sovereign bonds
Switzerland
Corporate bonds
Europe
Microfinance
UK
Inflation-linked bonds
USA
High-yield bonds
Japan
Emerging-market bonds
Emerging markets
Insurance-linked bonds
Alternative Assets
Convertible bonds
Gold
Duration
Hedge funds
Currencies
Structured products
US dollar
Private equity
Swiss franc Euro British pound
–
+
–
+
Private credit 10/2026
Infrastructure Real estate
Scorecard Macro Monetary / fiscal policy Corporate earnings Valuation Trend Investor sentiment
4
Kaiser Partner Privatbank AG
Equities: A rotation rather than a retreat The Nasdaq 100 and the S&P 500 both climbed to new highs at first in October, but from the middle of the month onward, doubts mounted about whether the tremendous investments in AI would ever pay off. Technology stocks came under pressure as a result. The reporting season for the third quarter did little to change that: although most companies beat earnings estimates, upside surprises were not rewarded across the board on the US stock market. Amid lofty valuations and correspondingly high expectations, good numbers alone are no longer enough – what matters is the outlook. The equal-weight S&P 500, value stocks, and defensive sectors have held up much better. The performance to date is more suggestive of a rotation within the equity market than of a general retreat from risky assets. The crucial factor is whether earnings growth continues and whether or not high real interest rates put a stronger drag on economic activity. It would start to get uncomfortable if there were a significant pullback in earnings forecasts or an escalation of the Iran conflict that drives the price of oil even higher. History inspires some confidence: periods following midterm elections have normally been favorable for stocks, and from a seasonal standpoint, the pre-Christmas period usually belongs to the bulls. In the USA, earnings estimate upgrades have outpaced share-price gains over the course of this year. Despite record-high stock index levels, this has compressed the market’s priceto-earnings (P/E) multiple to just below 22 ×, which is lower than a year ago. This creates a bit of a buffer for disappointments even if the valuation is still above the long-term average. Europe is much less expensive at a P/E multiple of around 15 ×. In a historical comparison, however, the valuation discount is not a bargain, particularly since the energy price shock hurts the region more severely than it does the USA and because earnings forecasts for Europe have been lowered lately. Switzer-
land, at a P/E of around 20 ×, is not cheap, but it offers stability with its high weight of pharmaceutical and consumer-staples stocks when defensive qualities are in demand. The strong franc remains a fly in the ointment, though, for Swiss exporters. France is an outlier. The CAC 40 has been lagging behind the rest of Europe for three years now, and its relative valuation is at a recordlow level. That sounds alluring, particularly since the companies in the index generate a good three-quarters of their revenue outside France. However, French domestic stocks and banks are not particularly inexpensive when measured against the political risk. A re-rating of the French stock market would arguably require a catalyst such as the passage of a national budget or the emergence of a centrist candidate with a real chance of winning the presidential election next spring. Until then, it continues to apply that cheap by itself is not a buy signal.
Fixed income: Has the peak been reached? Yields on long-term sovereign bonds continue to hover near multiyear highs in many countries. What’s interesting is how this came about: the rise in yields was driven primarily by an increase in real interest rates while long-term inflation expectations held steady despite the oil price shock. Moreover, the term premium remains below the level recorded at the start of this year despite all of the concerns about debt. The biggest drivers were the price of oil and US Federal Reserve policy rate expectations, two factors that could turn at any time. Near the trough of the slump in bond prices, the magazine The Economist sensationally asked on its cover whether bond markets would now blow up. Cover story images of that kind have often proven to be reverse indicators, as did this one: shortly after its appearance, the yield on 10-year US Treasury notes fell back below the 5 % mark. There are indications that yields have topped out for the time being. However, gaping government budget defi-
cits and the AI buildout’s ravenous demand for capital look set to remain in place. It may make sense to lengthen duration gradually. Risk premiums on corporate bonds have widened to their highest levels in months, with high-yield bonds from emerging-market countries registering the biggest widening moves. A flood of AI-related bond issues is causing additional pressure in the investment-grade segment. If the Iran conflict simmers down and economic activity stays robust, spreads may tighten again. But in the event of an escalation and sustained high oil prices, there’s a risk of further spread widening, particularly among lower-grade borrowers.
Alternative assets: Gold is not glittering (for now) Gold is currently trading more than 25 % below its record high hit in January, and its price intermittently dropped below the USD 4,000-per-ounce mark in October. One would actually expect the uncertainty surrounding the Iran conflict to give the precious metal a boost. However, the increase in bond yields and a firmer US dollar are outweighing that, at least for the near term, particularly since gold does not bear any interest. The longterm picture looks different, though: central banks continue to buy gold, and gold ETF holdings reached a record high in September. The yellow metal hasn’t lost any of its utility as a portfolio hedge – interest rates dictate its price in the short run, but central-bank gold buying does in the long term. Silver, too, is having a hard time right now. At its level of around USD 50 per ounce as of the end of October, silver now costs less than half of its record-high price registered in January 2026. At that time, silver was on its way to a single-month gain of more than 60 % – its best month in decades – driven by the dynamics of the gold rally and a wave of speculation. Afterwards its price nosedived, and its highs are unlikely to be revisited anytime soon.
History inspires some confidence: periods following midterm elections have normally been favorable for stocks, and from a seasonal standpoint, the pre-Christmas period usually belongs to the bulls. Monthly Market Monitor – November 2026
5
Currencies: The euro hinges on Paris The euro suffered as a result of the turmoil in France and dropped below 1.12 against the US dollar for a time. The interest-rate differential could help the euro in the medium term: if the European Central Bank raises its policy rate further and the US Federal Reserve’s tightening course turns out more moderate than the nearly three quarterpoint rate hikes by the end of 2027 that are currently priced in, the dollar’s interest-rate advantage would diminish. However, that
Several of the largest companies of the AI era have long been growing in private hands and are now rushing to go public. SpaceX, Anthropic, and OpenAI together are almost as valuable as the combined first-day market value of the more than 3,300 US technology companies that have IPO’d since 1980. This comparison admittedly is a little misleading because it juxtaposes current valuations against nominal values drawn from a span of 45 years, but the sheer scale is nonetheless unprecedented. In June, SpaceX issued USD 86 billion worth of shares to the public, more than any other IPO in history, and lockup periods on over USD 500 billion worth of SpaceX shares are set to expire by the end of this year. Anthropic filed its IPO prospectus in late October and was valued at USD 965 billion at last look while OpenAI (USD 852 billion) is negotiating a new funding round and is aiming to go public in 2027. IPOs of that kind drain money from the rest of the market. At the same time, a major buyer drops out: instead of buying back their own shares, big tech companies are investing in data centers and chips. Whether or not the prices are too high is ultimately determined by earnings and whether they keep pace with expectations. In the near term, so much new supply needs buyers – and buyers are becoming choosier.
is predicated on the situation in France not worsening. If the ECB were to have to step in to prop up French bonds, that would be tantamount to easing monetary policy and would weigh on the euro. The credibility of France’s fiscal policy is the crucial factor – by now even the Rassemblement National is vowing to cut the country’s budget deficit to 3 % of GDP by 2030. How serious the party’s pledge is remains to be seen. Amid the ongoing political uncertainty, the euro is hardly likely to gain much ground against the Swiss franc for the time being.
Chart in the Spotlight Who will buy it all? | AI titans are rushing to go public Valuation in USD trillion1 5
4
3
0.85
2
0.97
1
0
1.98
4.07 SpaceX
Anthropic
OpenAI
US-Tech-IPOs
Sources: Bloomberg, Jay R. Ritter (University of Florida), Kaiser Partner Privatbank 1
S paceX: market capitalization as of Oct. 30, 2026; Anthropic and OpenAI: post-money valuation of last funding round (in May and March 2026, respectively). Right: sum of valuations at time of IPO, nominal.
In June, SpaceX issued USD 86 billion worth of shares to the public, more than any other IPO in history, and lockup periods on over USD 500 billion worth of SpaceX shares are set to expire by the end of this year. 6
Kaiser Partner Privatbank AG
The Back Page
Asset Classes Performance as of 31 October 2026 Asset class
YTD 1 Month
1 year
3 years*
Index
Cash US-Dollar
3.34%
0.36%
4.02%
4.70%
USD Interest Rate Return
Euro
2.00%
0.23%
2.35%
2.88%
EUR Interest Rate Return
Swiss Franc
-0.03%
-0.01%
-0.03%
0.51%
CHF Interest Rate Return
USA
-1.76%
3.07%
-1.34%
4.76%
Bloomberg US Govt 7-10 Yr Bond Index (USD)
USA inflation-protected
0.44%
2.61%
0.21%
4.90%
Bloomberg US Treasury Inflation-Linked Bond Index (USD)
Germany
-0.91%
2.22%
-2.12%
1.58%
Bloomberg Germany Govt 7-10 Yr Bond Index (EUR)
United Kingdom
-1.13%
1.20%
-0.87%
3.19%
Bloomberg UK Govt 7-10 Yr Bond Index (GBP)
Switzerland
-4.61%
-2.21%
-3.97%
2.73%
Bloomberg Switzerland Govt 7-10 Yr Bond Index (CHF)
Fixed Income Government Bonds
Corporate Bonds US Investment Grade
0.23%
1.51%
1.15%
6.17%
Bloomberg US Corporate 3-5 Yr Index (USD)
EU Investment Grade
-0.40%
0.59%
-0.56%
4.22%
Bloomberg European Corporate 3-5 Yr Index (EUR)
US High Yield
0.40%
0.30%
1.56%
8.56%
Bloomberg US Corporate High Yield Index (USD)
EU High Yield
-0.74%
-1.05%
-0.15%
6.37%
Bloomberg Pan-European High Yield Index (EUR)
Emerging-market bonds
-0.41%
1.50%
0.58%
10.28%
JPMorgan EMBI Global Core Index (USD)
Insurance-linked bonds
10.58%
0.96%
12.07%
13.79%
Swiss Re Global Cat Bond Total Return Index (USD)
Convertible bonds
6.30%
-5.87%
4.52%
16.36%
Bloomberg Global Convertibles Index (USD)
Others
Equities Global
11.25%
-0.75%
12.53%
22.80%
MSCI World Gross Total Return Index (USD)
USA
11.77%
-0.87%
12.11%
23.40%
S&P 500 Total Return Index (USD)
Europe
12.30%
1.98%
16.59%
17.97%
STOXX Europe 600 (Gross Return) (EUR)
United Kingdom
10.97%
1.29%
13.92%
17.60%
FTSE 100 Total Return Index (GBP)
Switzerland
14.42%
6.30%
22.76%
15.26%
Swiss Performance Index (CHF)
Japan
18.77%
-3.48%
21.71%
23.59%
Topix Total Return Index (JPY)
China
-17.91%
-6.98%
-20.93%
8.91%
MSCI China Gross Total Return Index (USD)
Emerging-markets ex. China
25.99%
-8.30%
28.88%
27.89%
MSCI Emerging Markets ex China Gross Return Index (USD)
Alternatives Commodities
28.73%
-0.41%
31.60%
10.51%
Bloomberg Commodity Index (USD)
Gold
-10.30%
-6.80%
-3.21%
25.00%
Gold Spot (US Dollar / Ounce)
Bitcoin
-11.67%
-7.41%
-29.25%
30.73%
XBTUSD Spot Exchange Rate
Real estate USA
9.67%
4.55%
8.79%
9.45%
S&P US All Equity REIT Index (USD)
Real estate Switzerland
-2.04%
0.96%
-0.28%
11.83%
SXI Real Estate Funds Total Return Index (CHF)
Hedge Funds
5.99%
-0.59%
7.36%
11.84%
Bloomberg All Hedge Fund Index (USD)
Private Equity
-12.62%
3.48%
-10.72%
10.77%
Global Listed Private Equity Index (USD)
Currencies EUR/USD
-4.99%
-1.50%
-3.27%
1.81%
EURUSD Spot Exchange Rate
EUR/CHF
-1.11%
-2.80%
-0.85%
-1.49%
EURCHF Spot Exchange Rate
GBP/USD
-0.62%
0.95%
1.82%
3.29%
GBPUSD Spot Exchange Rate
*annualised
Monthly Market Monitor – November 2026
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