Category: 3. Business

(Bloomberg) — A euro-zone inflation reading that’s likely to stay close to 2% should be enough to satisfy officials that they can avoid tweaking interest rates in December.

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Consumer prices probably rose 2.1% in November from a year earlier, according to the median of 29 forecasts in a Bloomberg survey ahead of Tuesday’s release. The underlying measure, which strips out volatile elements such as energy, is seen remaining at 2.4%.

Such readings for the final inflation numbers before the European Central Bank’s Dec. 18 decision might harden the resolve of policymakers to keep borrowing costs unchanged. That would leave them able to focus instead on their pivotal quarterly forecasts, featuring the first outlook stretching as far as 2028.

Officials find themselves in a holding pattern at present, with no clear consensus on what the next move for rates should be. Mixed signals from national reports on Friday might feed that sense of ambiguity, after stronger-than-expected inflation in Germany and Spain was balanced by weaker-than-anticipated numbers for France and Italy.

If there’s any bias within the Governing Council at present, it might be toward scouring the data for upward pressure on price growth. Vice President Luis de Guindos told Bloomberg Television on Nov. 26 that “the risk of undershooting is limited, in my view.” President Christine Lagarde, who’s repeatedly highlighted the good position that policy is currently at, may offer her own perspective in testimony to lawmakers in Brussels on Wednesday.

The unresolved sense of direction from the ECB is being mirrored by conflicting views from economists. Bloomberg Economics, for example, predicts inflation will slow in future months, adding to the case for rate cuts.

What Bloomberg Economics Says:

“Euro-area inflation will likely remain steady in November at just above the central bank’s 2% target, before resuming a sustained deceleration in December. That may add pressure on the ECB to ease policy next year, even though the Governing Council is currently resisting such a move.”

—Simona Delle Chiaie and David Powell. For full analysis, click here

BNP Paribas, in a recent note, offered a different take. “As we move into 2026, we expect the ECB to see stronger growth and inflation than it currently expects, which should further strengthen the case for a prolonged rate hold,” wrote Paul Hollingsworth, the bank’s head of developed markets economics. “We continue to see the next move as a hike.”

Elsewhere, the Paris-based OECD will release new forecasts on Tuesday, a consumer-price gauge is coming from the US, policymakers in the UK will share their financial-stability assessment, and Brazil may come to the end of its longest streak of growth in decades.

Click here for what happened in the past week, and below is our wrap of what’s coming up in the global economy.

US and Canada

Federal Reserve officials will get a dated reading on their preferred inflation gauge before settling in the following week for their final policy meeting of the year. On Friday, the Bureau of Economic Analysis releases its September income and spending report — long delayed because of the government shutdown.

The figures will include the personal consumption expenditures price index and a core measure that excludes food and energy. Economists project a third-straight 0.2% increase in the core index. That would keep the year-over-year figure hovering just below 3%, a sign that inflationary pressures are stable, yet sticky and above the Fed’s goal.

Against such a backdrop, the debate among officials will largely center on the job market and whether rates should be reduced for a third straight time when policymakers meet Dec. 9-10. Investors see a cut as more likely than not.

While the latest jobs report showed a larger-than-expected rise in payrolls, the gain was concentrated in just a few industries. The unemployment rate ticked up to an almost four-year high, and there’s been a steady drumbeat of layoff news from companies.

Other economic data in the coming week include ADP private employment figures for November, as well as Institute for Supply Management surveys of manufacturers and service providers. The Fed is also scheduled to release September industrial production figures.

In Canada, meanwhile, jobs data for November are expected to show persistent weakness as the US trade war batters key industries and weighs on broader hiring. Some analysts see employers shedding staff after two strong reports made up for losses over the summer.

The Bank of Canada plans to hold its policy rate steady at 2.25% as long as the economy and inflation evolve as expected, and it foresees a soft labor market with weak wage growth.

Asia

Asia steps into the first week of December with a packed calendar — led by a wave of manufacturing purchasing manager indexes along with price indicators that will help gauge the region’s momentum into year-end.

The tone will be shaped by remarks from Bank of Japan Governor Kazuo Ueda on Monday, with markets alert to any signals on the likelihood of a December rate hike.

Australia begins the week with housing data that’s expected to confirm another month of gains, alongside a run of third-quarter figures — including company profits and inventories — ahead of its GDP release on Wednesday, when South Korea publishes its revised figures too.

Also on Monday, Japan issues a broad set of quarterly indicators, covering capital spending, sales, and profits, that will feed into GDP revisions the following week.

Indonesia reports inflation and trade data. A sweep of PMIs from across Asia — including Australia, Indonesia, Japan, South Korea, Malaysia, the Philippines, Thailand, Taiwan and Vietnam — will offer an early reading on factory conditions as global demand remains uneven.

Tuesday brings New Zealand’s third-quarter terms of trade, followed by South Korea’s inflation for November. Australia reports its current account balance as well as government spending for the September quarter.

Thursday features Japan’s weekly portfolio-investment flows and Australia’s household-spending for October, together with the latest trade numbers.

Attention turns to India on Friday, where the country’s central bank is expected to lower the repurchase, or repo, rate, making borrowing cheaper for banks and in turn for households and businesses.

Also on Friday, South Korea releases current account data, Japan has household spending, while the Philippines and Taiwan report inflation readings for November. Singapore’s retail-sales report will show whether the improvement seen last quarter carried into October.

Europe, Middle East, Africa

While the threat of post-budget fiscal turmoil in markets appears to have subsided, the Bank of England is likely to identify other financial stability dangers when it releases its latest risk assessment on Tuesday, accompanied by a press conference with Governor Andrew Bailey.

With several global peers having released their own analyses in the past month, risks ranging from a stock bubble to parallels with the subprime debt crisis might come up. Little more than a month ago, Bailey warned of “alarm bells” in private credit.

In Switzerland, a second monthly reading of inflation barely above zero may arrive on Thursday, keeping pressure on the central bank there. The following day, Sweden’s measure of consumer-price growth targeted by officials is seen weakening drastically, to a six-month low.

Aside from inflation, the neighboring euro-zone will see national data pointing to the state of manufacturing at the start of the fourth quarter. German factory orders, along with French and Spanish industrial production, will come out on Friday.

In Ukraine — the scene of government upheaval after the exit of President Volodymyr Zelenskiy’s chief of staff — parliament will debate the draft of the 2026 budget on Tuesday amid demands from the International Monetary Fund.

In Poland the following day, the central bank will decide whether to continue with rate cuts after a series of reductions spurred by lower-than-expected inflation. A majority of economists predict it will do so.

Data in South Africa on Tuesday will likely show economic growth slowed slightly in the third quarter, to 0.5% from 0.8%, as the US’s 30% tariff on some exports weighed on manufacturing.

Saudi Arabia is set to announce its 2026 budget the same day, followed by a press conference with Finance Minister Mohammed al-Jadaan.

And the next day in Turkey, data will probably show inflation eased in November to about 31.6%. Central bank Governor Fatih Karahan has said he expects an improvement, fueling expectations for a larger rate cut in December.

Latin America

It was a nice run, but new data may well show that Brazil’s 16-quarter expansion — the longest growth streak for LatAm’s No. 1 economy in the last three decades — ran out of road in the third quarter.

The immediate causes can be boiled down to the central bank’s uncompromising monetary policy and the hit from President Donald Trump’s tariffs. A few analysts see the risk of a shallow second-half recession.

A host of reports from Mexico are likely to underscore the widening output gap and loss of momentum in LatAm’s No. 2 economy.

Manufacturing, consumer confidence, private consumption, and jobs added are all telling the same story, though perhaps none quite so dramatically as investment. As with Brazil, Trump’s “America First” trade and tariff policies are worsening an already challenging situation.

The big Andean inflation-targeting economies lead off November’s price reports from the region.

Chile, which also posts GDP-proxy figures, may report a slight cooling in consumer prices that might put a quarter-point rate cut on the table for central bankers who meet on Dec. 16.

In Peru’s megacity capital of Lima, consumer prices may have ticked slightly lower from the current below-target 1.35% — while Colombia could see a hint of deceleration in the year-on-year reading from October’s 5.51%.

–With assistance from Swati Pandey, Laura Dhillon Kane, Vince Golle, Monique Vanek, Robert Jameson, Mark Evans, Beril Akman and Andrew Langley.

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©2025 Bloomberg L.P.

This article first appeared on GuruFocus.

I’ll admit it: Salesforce Inc. (NYSE:CRM) single-digit revenue growth looks pedestrian next to AI darlings posting 40%-plus gains. However, I believe a fundamental shift is underway. Salesforce’s Data Cloud and Agentforce platform which enables autonomous AI agents to handle customer service, sales tasks, and workflows just hit $1.2 billion in annual recurring revenue (ARR) with 120% year-over-year growth. For context, that’s faster than the adoption of Slack, Tableau, or Mulesoft at similar stages. So, while the adoption of autonomous AI agents isn’t as immediately flashy as selling GPUs, Salesforce is monetizing at scale. Simultaneously, the company is expanding operating margins to record highs. That being said, Salesforce’s valuation seems to be at odds with its recent performance and opportunity in agentic AI. Trading at 5.85x sales, near a two-year low versus a 7.73 historical median, its stock appears to be priced for deceleration when the AI revenue inflection is materializing.

Salesforce offers a multi-tenant Software-as-a-Service (SaaS) customer relationship management, or CRM, platform that includes Sales Cloud, Service Cloud, Marketing Cloud, Commerce Cloud, Tableau (analytics), MuleSoft (integration), and Slack (collaboration), among others. The company segments customers by SMB (under $50 million revenue served via $25/user/month Starter Suite), mid-market ($50 million to $1 billion via Professional/Enterprise editions), and enterprise ($1 billion-plus via Enterprise/Unlimited editions). It deploys a sales-led model that aims for annual contracts. In its fiscal second quarter 2026 results, Salesforce reported a current remaining performance obligation, or cRPO, of $29.4 billion (up 11% year-over-year).

Before I get into the numbers, let’s first discuss the backdrop. Salesforce’s growth has moderated in recent quarters into the high single digits. Meanwhile, many of its peers in the Technology industry, such as Nvidia (NVDA), are leveraging artificial intelligence demand to drive immediate growth. Salesforce AI adoption hasn’t been as flashy, but it appears to be gaining momentum.

Salesforce’s FQ2 revenue was $10.24 billion (up 10% year-over-year), accelerating from 8% in prior quarters. In fact, this is the first meaningful reacceleration in over a year. More importantly, Salesforce’s core business (subscription) grew 11% year-over-year. Granted, its professional services declined 3%. Together, this signals that customers are adopting its platform faster and leaning on implementation partners rather than Salesforce’s own consultants.

What’s most impressive about Salesforce’s recent performance is not the reacceleration in revenue growth, but expanding margins. Non-GAAP operating margin reached 34.3% in FQ2, marking the tenth consecutive quarter of expansion. Likewise, Salesforce’s FCF margin expanded to 32.7% in FY25 from ~30% in FY24. The fact that Salesforce is simultaneously growing revenues and margins implies it has a good amount of operating leverage.

Looking ahead, the company raised its full-year FY2026 revenue guidance to $41.1 billion to $41.3 billion from the initial $40.5 billion to $40.9 billion, implying 8.5-9% Y/Y growth.

So, what is driving all of this? Here’s where the autonomous AI agents come in: Data Cloud and Agentforce combined now represent $1.2 billion-plus in ARR, growing an astonishing 120% year-over-year. Salesforce has closed on 6,000 Agentforce deals with an additional 6,500 in the works. So, this isn’t some experiment. Customers are actually putting these AI agents into production.

During a recent conference call, Salesforce described its AI agents as handling millions of conversations while humans are delivering the empathy and expertise. AI agents are also managing scheduling and logistics. It is really more complicated than that, though. They are operating across apps, departments, [and] silos.

Think about it. Instead of hiring three customer service reps at $50,000 each ($150,000 annually), a company can deploy three Agentforce agents at $2 per conversation or $550/month for unlimited usage. At scale, this costs a fraction of one human salary, with the added benefits of 24/7 operation across multiple languages with perfect CRM integration.

Autonomous AI agents are replacing entire workflows, but why Salesforce? I believe that Salesforce has major structural advantages to become the leader.

First, as is often the case, data is king. Agentforce agents aren’t just some general-purpose chatbots you have seen when you’ve gone on a website in the past. They are trained on each customer’s specific CRM data (think service history, product catalog, and business rules). Before the advent of AI and Agentforce, Salesforce had tens of thousands of companies’ customer interaction data. Replicating this data layer will be a major challenge for Salesforce’s competitors.

Second, customers aren’t jumping to hand customer interactions to AI without audit trails, permission controls, and regulatory compliance. Salesforce’s Einstein Trust Layer builds a trust and compliance layer that ensures every agent action is logged, every data access is governed, etc. This was not built overnight.

Last but not least, Agentforce’s embedded distribution across the CRM system simplifies deployment while maximizing data advantage. The agents can run natively inside Salesforce, so they automatically inherit permissions, see real-time pipeline changes, and access the same customer 360-degree view that human reps use. A standalone AI agent (from Salesforce competitors) would need APIs, syncing delays, and constant maintenance to replicate.

How large is this opportunity? There are roughly 17 million customer service roles globally, and, according to Gartner, By 2029, agentic AI will resolve 80% of common customer service issues without human intervention. Even if 30% of these workflows shift to autonomous agents over the next few years, that’s a $50-plus billion revenue opportunity. This is on top of Salesforce’s existing $38 billion (FY25) CRM business. The market’s current valuation of Salesforce seems to imply that Data Cloud and Agentforce are mere features, rather than a second business line inside the first.

My discounted cash flow model isolates what I believe are the two most important drivers of valuation: revenue growth and free cash flow (FCF).

In modeling Salesforce, Year 1 Revenue represents the consensus analyst estimate for 2025. In the trailing twelve months, Salesforce grew revenues 8.3% year-over-year and achieved a FCF margin of 31.6%. Salesforce’s stock beta is ~1.2 per multiple sources. This is also consistent with the software (system & application) industry beta of 1.24 per NYU Stern data. Of course, when it comes to software, Salesforce is more mature and robust than most companies. Everything else is either standard DCF methodology (e.g., terminal value 2.5%) or was derived from Salesforce’s most recent financial statements (e.g., debt, cash).

According to my model, Salesforce is undervalued by nearly 7% on a cash flow basis. However, the model assumes everything stays the same throughout the nine-year projection. What if Salesforce improves its FCF margin or revenue growth by 100 bps?

My sensitivity analysis reveals how small changes to growth or margin impact valuation.

It also tells us that growth is the primary driver of Salesforce’s valuation, which could explain why its stock has been stagnant besides material improvements in margin.

Let’s compare scenarios. What if Salesforce’s growth returns to >10% and margins continue to improve? On the other hand, what if growth continues to contract?

At this moment, Salesforce appears to be priced for my Bear scenario.

Other valuation metrics echo my sentiment that Salesforce is priced conservatively.

Now that we have Salesforce’s Base scenario, let’s explore how the company can leverage its growth and margins.

Per IDC, Salesforce remains the #1 CRM provider for the 12th consecutive year, with 20.7% market share. Microsoft Dynamics comes in second with ~18% market share. Oracle and Adobe are close behind. As of October 2024, Salesforce ranks #1 on the Gartner Magic Quadrant for CRM Customer Engagement Center. Microsoft (MSFT) and Oracle (ORCL) are also pegged as Leaders.

As alluded to, Microsoft is Salesforce’s fiercest competitor. Its Dynamics 365 can integrate easily with Office and includes Copilot AI. That being said, Microsoft lacks Salesforce customization depth and has a smaller ecosystem. Of course, Salesforce addresses Microsoft head-on, claiming that (based on its own internal metrics) 71,000+ Microsoft customers choose Salesforce for CRM.

Certainly, there is room for multiple players. Grand View Research estimates that the CRM market is projected to reach $163.16 billion by 2030 (CAGR of 14.6%). Although competition is a major risk to Salesforce, there’s no reason to think that it is simply going to fall out of its clear and sustained leadership position.

Beyond product features, Salesforce benefits from switching costs that create significant customer lock-in. Think about it. Once a company’s operations are deeply embedded in Salesforce’s ecosystem, moving away becomes quite expensive and risky. Years of customer interaction history, custom fields, workflows, and business logic accumulate, and migrating all the data is costly, time-consuming, and risky.

Many of its customers have built thousands of custom objects, fields, and Apex code (Salesforce’s proprietary programming language) tailored to specific processes. Redoing all of this on another platform essentially requires building from scratch.

Another one is ecosystem lock-in. Salesforce’s AppExchange marketplace hosts over 5,000 third-party applications that integrate natively with the platform. Many companies rely on these apps for specialized functions like marketing automation and contract management. So, switching CRM providers is not merely switching CRM providers; it is replacing the entire app stack.

Interestingly, I think the data network effect will compound with Agentforce. What do I mean by this? Every interaction processed through Salesforce becomes a breeding ground for its AI agents to become more effective. This creates an elusive flywheel, wherein better AI agents ? more customer value ? more usage ? more training data ? even better agents.

Lastly, don’t underestimate organizational inertia. Changing the CRM requires CEO-level sponsorship, board approval, and acceptance of significant business risk. This is not something that companies undertake with ease or certainty.

That being said, this is all hypothetical. How does this play out in real life? So far, so good for Salesforce, judging by its market share leadership (IDC) and repeated Gartner Leader placements. You can also combine this with double-digit cRPO growth and low revenue attrition (<10%). GuruFocus GF Score of 92/100 with Profitability Rank 8/10 and Financial Strength 7/10 further supports durability despite slower headline growth. To sum it up, Salesforce has a durable competitive position in CRM, and Agentforce could not only expand its TAM but also expand its leadership position within CRM.

While Agentforce is off to a solid start, the true test is renewal rates and expansion. If customers find that AI agents require excessive human oversight or don’t justify ROI versus human labor, adoption could stall. Agentforce is still very much in the early innings. The $1.2 billion ARR figure is merely ~3% of Salesforce’s total revenue.

Second, while Salesforce has a first-mover advantage in CRM, it’s apparent that competition is intensifying. Microsoft poses a significant threat, particularly as it bundles Copilot across its entire ecosystem, and it has the advantage of deep Office 365 integration. Oracle and Adobe are also making heavy investments in AI-powered CRM. All three of these companies have deep enough pockets to undercut prices to achieve more market share.

As always, macro headwinds, such as a recession or tightening credit, can pressure enterprise spending. Salesforce’s average deal size of over $1 million means that decisions require executive sign-off, board approval, and extended procurement cycles.

Operating margins have expanded for ten consecutive quarters, but Salesforce is nearing best-in-class levels for enterprise SaaS (~35%). This begs the question: how much more can Salesforce actually improve its margins? It could cut back on R&D or sales investment, but this could handicap its competitive positioning.

While FQ2 revenue growth accelerated to 10%, full-year guidance implies 8.5-9% growth. If Data Cloud and Agentforce fail to offset core CRM saturation, Salesforce may slip back into mid-single-digit growth. Should this happen, Salesforce’s P/E ratio of 35 would look fair rather than cheap.

A broader industry risk is regulatory and trust concerns. AI agents handling customer data and making decisions face increasing regulatory scrutiny. This is already taking place in Europe (AI Act) and in healthcare/financial services.

Recall that I opened by acknowledging that Salesforce’s single-digit revenue growth looks unexciting compared to AI infrastructure plays posting 40%-plus gains. That being said, I believe the market is mispricing the inflection point that is happening right now.

The company is monetizing AI at scale. Data Cloud and Agentforce eclipsing $1 billion in ARR and growing over 100% Y/Y is nothing to scoff at.

As implied by the millions of customer services roles globally that Gartner projects can be almost entirely replaced by agentic AI, the opportunity is substantial for the CRM leader.

While my DCF analysis suggests 7% upside even in the base case, the real opportunity lies in what happens if revenue growth is >10% (as FQ2 demonstrated) while margins continue expanding. In that scenario, Salesforce could be undervalued by over 25%.

To wrap up, the risk/reward appears asymmetric. The market is pricing in deceleration while the AI revenue inflection is materializing.

Earlier this month, McDonald’s promoted a limited-time $8 10-piece chicken McNugget value meal for November.

But under the company’s Nov. 14 X post marketing the deal, many promised not to eat at the chain due to reasons ranging from price inflation and perceived lower quality to long drive-through wait times.

“Since when is $8 a good price for 10 little nuggets, a hand full of fries and a drink?” one commenter said.

The company responded to a number of these complaints in the post’s thread, asking users to send their contact information in a direct message to sort out their complaints, but the post racked up hundreds of unhappy reviews.

McDonald’s was unable to provide an immediate response to Fortune’s request for comment due to the holiday weekend.

The backlash comes as the company tries to revive its image of affordability as price hikes have hit its menu.

Last year, the company was criticized for its price inflation since 2019, even drawing rebukes from House Republicans in an X post that claimed, under then-President Joe Biden, prices for medium fries surged 167.6% and 103.5% for a Big Mac meal.

McDonald’s refuted claims that its prices doubled, saying the average price of the company’s menu items increased about 40% in the time period, attributing most of it to “the increase of costs to run restaurants, which have gone up.” These costs include hiking restaurant worker salaries up to 40% and increased costs of food and paper, according to the company.

Over the past couple of years, McDonald’s has been criticized online by value-conscious customers for its prices. An X post displaying a $18 Big Mac combo meal went viral in 2023, spurring debate that the chain had become too expensive. This post also elicited a response from McDonald’s USA president, Joe Erlinger, who claimed the meal was an “exception” and that the chain’s prices have not outpaced inflation.

Even CEO Chris Kempczinski acknowledged combo meals priced over $10 were “negatively shaping value perceptions.”

During the company’s second-quarter earnings call, he told investors that the “single biggest driver” of what shapes a consumer’s overall perception of McDonald’s value is the menu board.

“We’ve got to get that fixed,” he said.

In May, Kempczinski said the company’s U.S. first-quarter traffic this year from low-income consumers declined by “nearly double digits,” and middle-income consumer traffic fell by almost the same amount. 

He said that these consumers “in particular, are being weighted down by the cumulative impact of inflation and heightened anxiety about the economic outlook.”

Despite the backlash, the company’s global comparable sales increased 3.6% in the third quarter—and its U.S. sales increased 2.4%.

“We’re fueling momentum by delivering everyday value and affordability, menu innovation, and compelling marketing that continue to bring customers through our doors,” Kempczinski said in McDonald’s third-quarter earnings release.

By Felix Vezina-Poirier

Stocks and bonds will react to new data on job openings, wages and labor-market perceptions

The U.S. Federal Reserve, led by Chair Jerome Powell, will make a crucial decision on interest rates at its December meeting.

With the U.S. government now reopened, the flow of economic data will resume over the next few weeks. The first major release was the September employment report, published last Thursday, while the White House has signaled the October data will likely only be partially released. That makes September’s report the only full labor-market reading the Federal Reserve will receive before its December meeting. What does it show, and where does it leave the Fed?

What we know about employment

September nonfarm payrolls rose 119,000, more than expected, rebounding from a downwardly revised loss of 4,000 in August. The pattern of downward revisions continued, with 33,000 jobs removed from prior months. This leaves the three-month average at 62,000, up from 18,000 in August but far below the 232,000 pace at the start of the year. Given the persistent revision pattern, the 119,000 figure is likely to be revised down as well.

The unemployment rate ticked up to 4.4% from 4.3%. The labor market remains near equilibrium, but slightly above the Fed’s view of the natural rate of unemployment. Further weakening would create slack, and that weakness could feed on itself.

The next employment report, for October, will be incomplete. Because the household survey was not collected during the shutdown, the report will not contain the unemployment rate. This is inconvenient for investors, to say the least. The key current macro question has been whether the slowdown in employment reflects a cyclical weakening of the economy due to tariff uncertainty, or a structural slowing in population growth driven by aging and restrictive immigration policy.

What we probably know about the October labor market

Broad alternative indicators show little improvement in October. Private-sector surveys of manufacturing and services firms point to contracting employment. ADP data showed minimal gains. Private-sector measures of job openings and small-business surveys indicate softening labor demand. Private-sector layoff measures have increased, although weekly unemployment claims remain contained.

In sum, employment growth likely remained weak without collapsing. The unemployment rate likely ticked up again, but not sharply. Importantly, businesses do not report increased hiring difficulty, while workers report jobs are getting harder to get. The opposite pattern would appear if aging and reduced immigration were tightening the labor market more than weaker demand.

The Fed’s struggle

Whether employment weakness is driven by labor demand or labor supply is a key fault line within the FOMC. The labor market remains the pivotal factor that will determine the pace of Fed easing. The 10-2 vote at the last meeting for a 25-basis-point cut featured dissents on both sides: Governor Stephan Miran favored a 50-basis-point cut, while Kansas City Fed President Jeffrey Schmid voted to hold rates.

The September job report will not have changed those positions. Hawks can point to the rebound in headline job growth in a context of still-high inflation. Doves can point to the rising unemployment rate, negative payroll revisions, falling wage growth and weak job growth in cyclical sectors.

Recent Fed speeches point to a pause in cuts at the December meeting. Schmid, from the hawkish camp, argued that inflation remains broad-based and above target, with decent growth momentum and a balanced labor market. He views the slowdown as structural and warned about de-anchoring inflation expectations. Meanwhile, governor Christopher Waller, a leading dove, sees inflation driven mostly by tariffs and cyclical labor weakness, with slower wage growth and falling openings signaling demand-side slowing.

While the hawks could win the December debate, the doves’ case appears stronger for 2026. Alternative indicators for October and November do not point to a meaningful rebound in the labor market, and a greater share of the employment slowdown appears cyclical, not structural.

Ultimately, a weakening labor market will weigh on inflation. Goods inflation will soon peak, as shown by our price pressure index, which has crested. Slow growth limits companies’ ability to pass on costs, and falling oil prices have partly offset tariff-driven pressures. While December is uncertain, and should be a holding decision absent an immediate deterioration in the data, the direction of travel for policy rates is lower in 2026.

What investors should know now

This backdrop does not warrant an immediate shift in your investment portfolio, but it requires attention to how the labor market evolves. Signs of structural weakness will validate the hawks and reduce odds of easing. Signs of cyclical weakness will tilt votes toward the doves and increase the likelihood of faster easing.

The indicators to watch are job openings, wages and companies’ and workers’ perceptions of the labor market.

This is a precarious setup. Without major AI developments, good economic news could actually drive stocks lower. Equity markets have been betting on AI for upside, and on a dovish Fed supporting a slowing expansion as downside protection. With inflation still above target, strong data reduces the odds of the Fed easing.

We thus remain modestly defensive on stocks as growth and employment slow, awaiting clearer signs of sustained disinflation and improving macro momentum before turning constructive. Investors should maintain a neutral stance on stocks, an overweight on government bonds and underweight on credit and cash holdings. The labor market will set the direction for policy, and policy will set the terms for risk.

Felix Vezina-Poirier is the chief strategist for Daily Insights, BCA Research’s global cross-asset strategy service. Follow him on LinkedIn and X.

More: Why a functional U.S. government could actually trigger a bear market

Also read: AI and tech stocks are giving ‘early 1999’ dot-com bubble vibes. Is their rally finished?

-Felix Vezina-Poirier

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“The ministry always acted in compliance with rules and standard practices,” a Treasury official said.

Sign up here.

Prosecutors have been looking into whether the two investors and the bank acted in coordination while keeping supervisory authorities and investors in the dark.

MPS and the two shareholders, Italian tycoon Francesco Gaetano Caltagirone and holding company Delfin, have denied any wrongdoing and expressed confidence the investigation will exonerate them.

Caltagirone and Delfin told markets watchdog Consob they had been sounded out by the ministry ahead of that sale in relation to a plan by the Treasury to create a core of more stable domestic shareholders in MPS, a judicial document reviewed by Reuters showed on Saturday.

The first two share placements brought in as shareholders dozens of international investment funds.

The judicial document showed the ministry told Consob there had been no previous contacts with the investors that took part in the November 2024 placement.

That sale cut the Treasury’s stake in MPS below 12%. The Mediobanca deal reduced it further below 5%.

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Tech Mahindra’s stock price target has been revised upward, with the fair value estimate rising from ₹1,568.60 to ₹1,577.74. This increase follows analysts’ consideration of both improved business fundamentals and a dynamic, mixed outlook for the company. Read on to learn what is influencing these updates and how you can keep track of the evolving narrative surrounding Tech Mahindra’s valuation.

Analyst Price Targets don’t always capture the full story. Head over to our Company Report to find new ways to value Tech Mahindra.

Analyst commentary on Tech Mahindra continues to evolve as firms regularly review the company’s outlook, factoring in recent performance and broader market trends. While the dataset features limited direct street research specific to Tech Mahindra, notable themes from current analyst feedback can still inform the discussion on the company’s valuation and future prospects.

🐂 Bullish Takeaways

• Recent upward revisions in fair value estimates reflect optimism around Tech Mahindra’s business fundamentals and potential for growth momentum.

• Analysts have highlighted execution quality and proactive cost control as positive differentiators for the company in the current environment.

• Forward-looking adjustments to price targets often cite transparent business updates and progress in strategic initiatives as supporting factors for a positive stance.

🐻 Bearish Takeaways

• Even within a generally constructive environment, some analysts maintain reservations around valuation levels, with certain metrics suggesting the upside may be largely priced in at current levels.

• Near-term uncertainties, such as evolving market demand or industry cyclicality, remain key watch points cited in more cautious or neutral research notes.

• While no recent downward price target revisions were noted in the available data, analysts continue to flag the need for vigilance as the outlook changes.

Overall, the analyst narrative surrounding Tech Mahindra balances recognition of ongoing progress and healthy execution with an awareness of remaining risks. This keeps market observers attentive to both upside and potential headwinds in the company’s valuation story.

Do your thoughts align with the Bull or Bear Analysts? Perhaps you think there’s more to the story. Head to the Simply Wall St Community to discover more perspectives or begin writing your own Narrative!

• Tech Mahindra has joined forces with the German Research Center for Artificial Intelligence (DFKI) to co-develop next-generation smart factory solutions. This strategic alliance aims to advance responsible AI applications in manufacturing.

• The company partnered with Crosscall to enhance enterprise mobility in North America. The partnership will focus on rugged device integration and AI/ML solutions targeted at key sectors such as oil and gas, manufacturing, and telecom.

• A Global Chess League Experience Center was opened at Tech Mahindra’s U.S. headquarters in Plano, Dallas, establishing a new hub for innovation and major chess tournaments at the intersection of technology and sport.

• Tech Mahindra introduced the TechM Orion Marketplace, an AI-driven platform designed to boost enterprise automation and operational efficiency through intelligent and autonomous agents.

• The Fair Value Estimate has risen slightly from ₹1,568.60 to ₹1,577.74, reflecting enhanced business fundamentals.

• The Discount Rate has increased marginally from 15.89% to 16.00%, indicating a modest shift in required return assumptions.

• The Revenue Growth Projection has edged up from 7.58% to 7.60%, showing a minor upward revision in analyst expectations.

• The Net Profit Margin forecast has improved slightly from 11.90% to 11.92%, pointing to better anticipated profitability.

• The Future P/E Ratio has increased modestly from 27.08x to 27.24x, suggesting a small change in valuation multiples.

Narratives take investing beyond the numbers, allowing users to share a story by expressing their perspective behind a company’s valuation and outlook. Each Narrative on Simply Wall St links business strategy to financial forecasts and then to a fair value. The goal is to simplify decision-making for millions of investors. By comparing Fair Value to the current Price and updating dynamically as news or earnings are released, Narratives offer guidance on whether to buy, sell, or hold directly from the Community page.

Visit the original Narrative on Tech Mahindra to stay informed on:

• How Tech Mahindra’s focus on high-growth sectors and global expansion could influence revenue momentum.

• The effects of AI-driven innovation and operational efficiencies on future profit margins and earnings quality.

• Risks related to sector declines, challenges in scaling, and customer renewal patterns that may impact long-term growth.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include TECHM.nsei.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

MP Materials (MP) shares moved higher after the company reported annual net income growth and strong revenue gains. Investors are paying close attention to profitability trends, as rare earth demand shapes the outlook for the sector.

See our latest analysis for MP Materials.

After a strong annual report, MP Materials’ share price showed impressive momentum with a 12.09% jump over the past week, bringing its latest close to $61.95. While the 1-year total shareholder return sits at a remarkable 194.02%, longer-term results also remain well ahead of the market. This signals building optimism around the business’s growth prospects and sector position.

If the recent shift in momentum has you curious about what else is out there, now is the perfect moment to broaden the search and discover fast growing stocks with high insider ownership

With MP Materials trading at a notable premium to its recent historical levels, investors are left to wonder if this surge is a signal that more upside remains, or if the market has already priced in all the future growth.

With the current fair value pegged at $79.11 and the latest close at $61.95, the prevailing narrative suggests there is meaningful upside left. Let us look at a core catalyst that drives this bold view.

Structural global shifts prioritizing domestic and allied supply chains for critical materials, underpinned by national security and electrification policies, have resulted in massive government funding, ownership stakes, and market protections for MP. This sets up long-term demand and premium pricing for U.S.-produced rare earths and supports sustained margin expansion.

Read the complete narrative.

Why do analysts see room to run? Their price target calculation leans on blockbuster revenue projections, robust margin signals, and the premium that policymakers and major tech buyers are willing to pay for strategic materials security. Want to see the specific figures driving this powerful upside case? The full narrative pulls back the curtain.

Result: Fair Value of $79.11 (UNDERVALUED)

Have a read of the narrative in full and understand what’s behind the forecasts.

However, ambitious facility build-outs risk delays or cost overruns. In addition, heavy dependence on a few key customers could introduce earnings volatility ahead.

Find out about the key risks to this MP Materials narrative.

Taking a different look using the price-to-sales ratio, MP Materials trades at 47.2x, which is much higher than both its peer average of 0.8x and the US Metals and Mining industry average of 2.4x. Even compared to a fair ratio of 2.5x, the stock appears expensive. Does this large gap signal added risk for new investors?

See what the numbers say about this price — find out in our valuation breakdown.

If you have your own perspective, or want to dive into the details yourself, it takes just minutes to craft an independent narrative. Do it your way

A great starting point for your MP Materials research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

Smart investors consistently seek fresh opportunities to get ahead of the market. Don’t miss your chance to tap into stocks with hidden potential using these handpicked screeners from Simply Wall Street:

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include MP.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

Artificial intelligence (AI) allows computers and machines to simulate learning, comprehending, problem-solving, and decision-making in a similar manner to humans.¹ AI is rapidly transforming the field of pharmacy and will continue to do so.

The benefits of AI in pharmacy are far-reaching. It can enhance clinical and personalized medicine through pharmacogenomics, clinical decision support systems, and predictive analytics for medication management. It can streamline pharmacy operations through workflow automation, inventory optimization, billing, and regulatory compliance. AI improves patient safety and engagement by way of adverse event monitoring, patient engagement tools, and educational resources. It also accelerates drug discovery and development through clinical trial optimization and drug repurposing.

Although these benefits are crucial to the field of pharmacy, integration of AI presents significant ethical challenges that must be recognized and addressed to ensure patient welfare. Careful consideration must be given to key ethical concerns such as data privacy, algorithmic bias, transparency, accountability, and human oversight in order to balance crucial innovation with ethical standards.

Data Privacy and Security

AI relies on vast amounts of sensitive patient data, thereby creating significant data privacy challenges. Proper safeguards are necessary to protect patient data and adhere to relevant regulatory requirements, such as the Health Insurance Portability and Accountability Act (HIPAA).²

Data Breaches and Cyber-Attacks

AI-driven pharmacies are vulnerable to data breaches and cyber-attacks through the targeting of patient information, intellectual property, and drug data. An increased reliance on digital systems creates entry points for attackers to use ransomware, commence phishing, and breach AI data pipelines.³

Re-Identification of De-Identified Data

Combining datasets using advanced algorithms to exploit unique combinations of identifiers that can then be used to find overlapping information. These can then be pieced together to uncover a real identity.⁴

Third-Party Vendor Risk

In health care, almost one-third of all data breaches originate through third-party compromise. These attacks target vulnerabilities in the vendor’s systems, allowing attackers to access data they normally would not have access to.⁵

Algorithmic Bias and Fairness

Most AI algorithms learn from enormous datasets. If these datasets are incomplete, skewed, or compromised in any way, the AI algorithm may reproduce and amplify incorrect information.

Biased Training Data

If training data is misrepresentative of the full population, AI may propagate this bias, which may lead to poor patient outcomes.⁶

Lack of Data Diversity

Data diversity represents the inclusion of data from a variety of demographics including age, gender, ethnicity, geographic locations, and socioeconomic status. Cultural diversity indicates accounting for differences in language, customs, and mores. Behavioral diversity denotes including data from more than just dominant patterns. Finally, contextual diversity means that data is captured from varied environments and situations.⁶

Information Bias

Information bias is the outcome of a combination of errors in how training data is collected, measured, or processed that can lead to inaccurate and possibly discriminatory results.

Unintended Feedback Bias

AI models learn not only through large datasets but also through a feedback loop. This can lead AI to reinforce its own flawed conclusions.

Transparency and Explainability

By making AI processes and data understandable and providing clear and understandable reasoning for recommendations produced by AI, pharmacists can help detect bias, ensure accuracy, and enhance patient safety. This also facilitates shared decision-making by helping both patients and health care providers understand the risks and benefits of therapy.

Human Oversight and Control

Incorporating human intervention throughout the AI process is imperative to ensure patient safety, ethical practice, regulatory compliance, and system accuracy. AI cannot match pharmacists’ strategic thinking, ethical judgment, or clinical expertise. Regulators of AI must focus on human-in-the-loop (intervention at critical points to guide and review AI outputs) and human-on-the-loop (human supervision for necessary interventions).⁷

Equitable Access

Health equity relating to AI applications refers to the fair and just distribution of health technologies and their associated benefits. All individuals should have access to the same health care services regardless of race, gender, ethnicity, socioeconomic status, or geographic location.

Artificial intelligence must advance health care and provide positive health outcomes while also doing so in a way that lessens existing health disparities rather than increasing them.⁸

Accountability and Liability

Accountability and liability in pharmacy when using AI is complex as there are several stakeholders to consider and a lack of clear legal frameworks.

• Pharmacists: Pharmacists are responsible for patient care and are required to act under the “reasonable professional” standard whether they are using AI as a tool. Failure to act on a flawed AI recommendation can result in liability and, conversely, failure to use an available AI tool that may have prevented an error are liable as well.
• Health care institutions: Hospitals and pharmacies can be held liable for the AI they implement. Negligent supervision encompasses failure to adequately train staff and set oversight procedures. Negligent selections would be implementing an unreliable and/or unverified AI system. Vicarious liability includes holding the institution responsible for the actions of their employees.
• AI developers and vendors: Product liabilities include coding errors and glitches, inadequate prerelease testing, failure to warn of limitations and risks of products, and using biased training data that leads to discriminatory outcomes.

Patient Autonomy and Informed Consent

Patients must understand how AI can influence treatment decisions through clear communication about the process in which AI analyzes data and makes recommendations. Patients have the absolute right to make informed decisions about their care, even when AI is involved.

Regular Monitoring and Auditing

To remain reliable and effective, AI systems must be continuously monitored and evaluated for “drift”, where the accuracy of AI recommendations degrades over time due to data changes or evolving circumstances.

Conclusion

The potential for AI to transform the field of pharmacy is immense. This potential is tempered by a wide range of ethical considerations including data privacy, bias, transparency, equitable access, and accountability. Successful implementation of AI requires collaborative efforts between AI developers, pharmacists, regulators, and more to establish ethical standards and educational frameworks.

REFERENCES

1. What is AI? IBM website. August 9, 2024. https://www.ibm.com/think/topics/artificial-intelligence. Accessed September 9, 2025.

2. Artificial Intelligence in Pharmacy: Appropriate Use of AI (Part 1 of 2). Florida Pharmacy Foundation website. https://flpharmfound.org/artificial-intelligence-in-pharmacy-part-1#:~:text=Additionally%2C%20the%20ethical%20implications%20of,and%20mitigate%20potential%20ethical%20issues. Accessed September 9, 2025.

3. Li J. Security Implications of AI Chatbots in Health Care. J Med Internet Res. 2023 Nov 28;25:e47551. doi: 10.2196/47551. PMID: 38015597; PMCID: PMC10716748.

4. Erosion of Anonymity: Mitigating the Risk of Re-Identification of De-Identified Health Data. Health Law Advisor website. February 28, 2019. https://www.healthlawadvisor.com/erosion-of-anonymity-mitigating-the-risk-of-re-identification-of-de-identified-health-data#:~:text=To%20mitigate%20these%20risks%2C%20organizations%20can:%20*,sharing%20and%20use%20agreement%20with%20the%20recipient. Accessed September 10, 2025.

5. More Than One-Third of Data Breaches Due to Third-Party Supplier Compromises. The HIPAA Journal website. March 28, 2025. https://www.hipaajournal.com/more-than-one-third-data-breaches-third-party-compromises/. Accessed September 10, 2025.

6. Norori N, Hu Q, Aellen FM, Faraci FD, Tzovara A. Addressing bias in big data and AI for health care: A call for open science. Patterns (N Y). 2021 Oct 8;2(10):100347. doi: 10.1016/j.patter.2021.100347. PMID: 34693373; PMCID: PMC8515002.

7. Singh R, Paxton M, Auclair J. Regulating the AI-enabled ecosystem for human therapeutics. Commun Med (Lond). 2025 May 17;5(1):181. doi: 10.1038/s43856-025-00910-x. PMID: 40382515; PMCID: PMC12085592.

8. Health Equity and Ethical Considerations in Using Artificial Intelligence in Public Health and Medicine. Centers for Disease Control and Prevention website. August 22, 2024. https://www.cdc.gov/pcd/issues/2024/24_0245.htm#:~:text=The%20potential%20of%20AI%20to,or%20geographic%20location%20(8). Accessed September 10, 2025.

RWE (XTRA:RWE) stock has been on the move lately, and many investors are keeping an eye on the utility’s performance across European and international markets. The company’s ability to generate consistent revenue growth makes it a key name to watch in the sector.

See our latest analysis for RWE.

RWE’s steady run has caught the eye lately, especially after a robust rally that’s seen the share price jump nearly 48% year-to-date and surge over 27% in the last 90 days. Momentum is clearly building, with the one-year total shareholder return also standing strong at 41.8%, highlighting both recent excitement and solid long-term value for investors.

If you want to broaden your perspective beyond utilities, now’s a great time to discover fast growing stocks with high insider ownership

With RWE’s impressive rally and steady fundamentals, investors are left to wonder if the recent gains signal a bargain waiting to be seized or if the market has already taken the company’s future growth prospects into account.

With RWE shares last closing at €43.74 and the most-watched narrative suggesting a fair value of €47.16, there is a visible gap between current price and what analysts believe is justified. This difference is drawing fresh attention from market observers, and the stage is set for a closer look at the catalysts shaping those projections.

Major policy tailwinds in core markets, the U.K. retention of a single price zone, extension of CfD periods to 20 years, higher auction price caps, and the new U.S. “Big Beautiful Bill” with tax incentives are expected to provide greater revenue visibility and de-risk project cash flows. These factors may support higher recurring revenues and improved earnings quality over time.

Read the complete narrative.

Curious what aggressive financial forecasts are behind that premium? The narrative is anchored in bold growth drivers and a future multiple that is turning heads. Don’t miss the surprisingly optimistic projections that could change how you value RWE.

Result: Fair Value of €47.16 (UNDERVALUED)

Have a read of the narrative in full and understand what’s behind the forecasts.

However, unpredictably weak wind conditions or supply chain disruptions could quickly challenge RWE’s current growth outlook and prompt investors to reassess their expectations.

Find out about the key risks to this RWE narrative.

Taking a different approach, our DCF model estimates RWE’s fair value at €26.80, which is significantly lower than the current share price. This means that, despite the optimism shown by analyst targets, a cash flow-based perspective sees the stock as overvalued. Is the market too optimistic about RWE’s growth, or is the DCF being too cautious?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out RWE for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 920 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match – so you never miss a potential opportunity.

If you want a second opinion or enjoy digging into the numbers yourself, it takes less than three minutes to build your own perspective and Do it your way.

A great starting point for your RWE research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

Upgrade your portfolio by taking action on fresh opportunities you may be overlooking. These screens are waiting for you and could reveal your next winning stock.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include RWE.DE.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com