Devon Funds Morning Note - 18 November 2025

Wednesday 19th November 2025

All Eyes on Chip Giant’s Earnings

Global

The US markets have begun the week back in the red, as the S&P 500 fell 1.0%, the Nasdaq shed 0.8%, and the Dow Jones tumbled 1.2%. Investors are keeping a close eye on major risk events, with sentiment particularly sensitive ahead of Nvidia’s highly anticipated quarterly earnings report, which is due to be released after the US market closes on Wednesday (Thursday morning NZ time). Nvidia’s results are expected to be a key catalyst for broader market moves, as any surprises in its outlook or profit numbers will likely determine the tone for both technology stocks and the overall direction of the S&P 500 for the rest of the week.

Further to this, uncertainty about further US Federal Reserve rate cuts is mounting because the underlying economic data has not provided strong justification for additional easing, especially at the upcoming December meeting.

Though recent months saw some softening in labour market indicators and core inflation trending closer to target, data releases have been inconsistent, with some signals of resilience in employment and consumer spending. To complicate matters, the government shutdown has suspended major official reports, amplifying uncertainty and causing market participants and some FOMC members to argue that the lack of reliable new numbers increases the risk of making policy mistakes. As a result, the odds of a December rate cut have slipped, with the consensus shifting towards a ‘wait and see’ approach until more conclusive evidence emerges to support a move, leaving markets oscillating amid elevated anticipation and caution.

Noteworthy decliners included Dell Technologies -8.4%, HP -6.8%, and Apple -1.8% as Apple has intensified CEO succession planning efforts, preparing for Tim Cook to step down as soon as next year.

Across to Europe and the UK, the major indices posted muted to slightly lower results; the FTSE 100 slipped 0.2% for a third straight decline, while the Euro Stoxx 600 inched 0.5% lower.

Over to Asia, Japan’s PM Takaichi is slated to meet with the Bank of Japan Governor today after data revealed Japan’s economy contracted by 0.4% in the third quarter. The meeting will set the backdrop for whether the Bank of Japan will continue its ultra-easy stance or signal any steps toward tightening policy in the coming months, given the fragile economic outlook. The Nikkei 225 closed flat down 0.1%.

New Zealand

The Kiwi market started the week strong, with the NZX 50 finishing up 0.3% higher due to a late surge. Among the heavyweights, Meridian (+2.1%), Auckland International Airport (+1.3%), and Ebos Group (2.2%) helped the index outpace heavy losses from Serko Ltd. (-5.4%), Gentrack Group (-4.7%), and Fisher & Paykel (-1.9%).

Auckland Airport’s October operating statistics have shown continued passenger growth, with international movements (excluding transits) up 3% year-on-year and domestic up 1%. Overall capacity increased, with short-haul international seats up 9%, long-haul by 1%, and domestic by 4%, reflecting steadily improving demand for both international and domestic travel.

Sticking with flying, Air New Zealand has announced the launch of a new non-stop seasonal route between Queenstown and Brisbane, set to commence on 22 June 2026 and operate three times weekly until 23 October 2026, directly competing with Qantas and upcoming flights from Jetstar. The new service looks to provide travellers with over 17,000 seats across the season, offering flexibility and choice for both New Zealanders seeking winter sun and Australians heading to New Zealand’s adventure tourism hub.

Lastly, the latest inflation data has revealed that food prices rose 4.7% annually but recorded a second consecutive monthly decline in October as fruit and vegetable costs softened and hospitality spending slipped. Rents saw a mild 1.6% annual increase but were flat month-on-month, while household energy costs surged, with electricity up 11.8% year-on-year and gas prices climbing as well.

The RBNZ quarterly Household Expectations Survey went on to reveal New Zealand households expect inflation to be 4.3% two years from now, down from 4.6% in the previous survey. While this rate remains above the RBNZ’s 1% to 3% target band, the downward trend in expectations is encouraging for the central bank as it signals that inflation perceptions are moderating.

Australia

The Australian share market started the week off flat, with the ASX 200 closing in the green after staging a late rally to recover early losses. This stability followed a volatile week marked by a sharp selloff led by declines in heavyweight banks, technology, and energy stocks. The latest session, however, saw a bounce back in tech names, up 1.2% in the sector. Financials continued to drag with Commonwealth Bank sliding an extra 1.0%, while BHP slipped 0.6% after the UK High Court decision (yesterday’s note).

Gold miners were a bright spot on the ASX as rare earth names, Lynas Rare Earths, rallied 5.5%, and Iluka Resources gained 5.7% amid broader precious and critical minerals strength. Elsewhere in the market, Aerospace & Defence name, Droneshield Limited (+11.6%) has rebounded from lows, while peer Elsight (+12.9%) was recently selected for the prestigious Northrop Grumman Technology Accelerator Program, which fast-tracks collaboration and integration with one of the world's largest defence contractors.

Finally, in the news, HSBC Australia is in the process of selling its retail banking business, with National Australia Bank (NAB) considered the frontrunner to acquire the unit, though Macquarie has also expressed interest. The sale, managed by Citi, involves a substantial portfolio including around A$40 billion in loans and A$18 billion in deposits. NAB's prior acquisition of Citi's Australian retail banking operations positions it well as a likely buyer, seeking to expand its market share and credit card offerings. Macquarie's interest indicates broader competition, but the decision remains uncertain as HSBC aims to streamline its global operations and focus on core markets in the UK and Asia. The deal will see ongoing consolidation in the Australian bank sector amid regulatory pressures.

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