Deutsche Bank-Thematic Research Monthly ideas – Post-Nvidia, another ever...-118964964

2025 16:18:09 GMT2025 16:18:09 GMT0Deutsche Bank Research | Monthly ideas: Post-Nvidia, another everything rally? | November 2025Deutsche BankResearchMonthly ideas: Post-Nvidia,another everything rally?November 2025Luke Templeman | Galina PozdnyakovaIMPORTANT RESEARCH DISCLOSURES AND ANALYST CERTIFICATIONS LOCATED IN APPENDIX 1. UNTIL 19th MARCH 2021 INCOMPLETE DISCLOSURE INFORMATION MAY HAVE BEEN DISPLAYED, PLEASE SEE APPENDIX 1 FOR FURTHER DETAILS.1Deutsche Bank Research | Monthly ideas: Post-Nvidia, another everything rally? | November 2025Executive summary: Our top ideas this monthThe demand for computing power is “accelerating and compounding”. So said Nvidia Chief Executive Huang last night after his company’s strong results drove equity markets higher today. As such, it appears the burgeoning growth of AI at a fundamental level will continue for some time.So, do we prepare ourselves for more of the ‘everything rally’?This month we offer some caution to some popular ideas and look more optimistically at others that are somewhat ignored.• Return chasing in US equity markets is running out of steam• Earnings season shows value outside mega caps• Private credit concerns are not a big deal, yet.• Has negative sentiment on Chinese assets finally unwound?Executive summaryReturn chasing is running out of steamEarnings season shows value outside mega capsPrivate credit concernsChina: has the negative sentiment unwound?13422Deutsche Bank Research | Monthly ideas: Post-Nvidia, another everything rally? | November 2025Return chasing is running out of steam3Deutsche Bank Research | Monthly ideas: Post-Nvidia, another everything rally? | November 2025Source: Bloomberg Finance LP, Deutsche Bank.Daily price moves in US stocks have been increasingly detached from other US assets recently0%10%20%30%40%50%60%70%80%Share of variance in US equities explained by the dollar, UST yields, gold and oil over the past 60 daysS&P 500S&P 500 e.w.Executive summaryReturn chasing is running out of steamEarnings season shows value outside mega capsPrivate credit concernsChina: has the negative sentiment unwound?13424Deutsche Bank Research | Monthly ideas: Post-Nvidia, another everything rally? | November 2025Source: Bloomberg Finance LP, Deutsche Bank.US stocks have been propelled by return chasing in recent months. This has been especially pronounced in tech and cyclicals – the three sectors that have been down the most in Q1 are now the best performers since then. -20%-10%0%10%20%30%40%JanFebMarAprMayJunJulAugSepOctHow sticky are monthly returns of S&P 500 stocks?Median autocorrelation with 1m lagAll stocksITReturns over the past month are positively correlated with next month’s returns-15%-10%-5%0%5%10%15%20%25%Median total returns by sector, S&P 500Since Q1'25Q1'25US elections-end of 2024Tech stocks and the broader index are back to behaving similarlyExecutive summaryReturn chasing is running out of steamEarnings season shows value outside mega capsPriva