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On Monday morning, markets woke up to the news that seven democrats and one independent had voted to back the latest Republican deal to reopen the US government and end the longest ever US shutdown.

Trump formally signed a bill to end the shutdown on Wednesday. Market reaction was mixed as US equities traded lower over concerns about how long it will take for things to return to normal…

Global markets continued to rally in October. They extended gains over the three-month period despite some potential obstacles including the first US government shutdown since December 2018, uncertainties over inflation and tariffs, and worries about an AI stock bubble. Global equities posted gains of 5.5% over the month with strong results across both developed and emerging markets.

US markets closed nearly 2% down for the week after concerns over valuations of AI & Mag 7 stocks came to a head. Over $500bn was wiped off the value of AI chipmakers, with the bosses of Goldman Sachs and Morgan Stanley speaking of fears about an imminent correction. The sustained US Government shutdown, nearing the record for the longest ever, added to these pains, with increased instability and uncertainty in US markets. UK and European markets also suffered from the sell-off, with UK markets perhaps struggling with the uncertainty of the upcoming budget.

Recently there’s been a lot of commentary on a potential bubble in AI. Some suggest challenges lie ahead for those exposed to US equity, where elevated valuations are concentrated in AI-related stocks. Others say that investing is worthwhile to fuel innovation in a revolutionary technology. While discussions around a bubble are important, one thing that’s missing is a reminder about investing basics when it comes to assessing US exposure. Several factors suggest being underweight in the US is sensible: the nature of current valuations, underlying economic conditions and other metrics that indicate the AI narrative is largely driven by speculation…

The advice profession is evolving rapidly. One of the biggest shifts we’re seeing is how firms approach investment management. For years, most advisers managed client portfolios in-house through a centralised investment proposition (CIP). But with increasing regulation and complexity of client needs, the administration and risk associated with designing portfolios and rebalancing are becoming harder to manage.

It’s not surprising, then, that many firms are outsourcing portfolio management to discretionary fund managers (DFMs)…

During Trump’s tour of Asia, Trump and Xi Jinping agreed to suspend China’s rare earth export controls in return for the US cutting the “fentanyl tariff” from 20% to 10%. China have also committed to buying a “massive” amount of American farm products including soybeans.

Trump rated the talks as a “12 on a scale of 1 to 10” but nothing has been signed yet…