Global equities were flat in November, the first month since March that didn’t finish in the green. Things could have been worse, however. In the first half of the month, hawkish US Federal Reserve (Fed) rhetoric and sticky inflation data saw December rate-cut expectations unwind, triggering a substantial sell-off, compounded by concerns over AI valuations. However, that then reversed after further data – much of it delayed due to the longest government shutdown in US history – was softer than expected and Fed officials struck a more dovish tone, helping global indices claw back much of their mid-month decline.

Across markets, performance was mixed. European equities held up relatively well, supported by renewed optimism around a potential ceasefire in Ukraine after constructive signals from political leaders. UK assets were steadier, with the government’s Budget landing more smoothly with markets than many had expected. Japan, by contrast, saw a reversal of recent strength: a large fiscal package pushed government bond yields sharply higher, weighing on the Nikkei and extending the yen’s slide.

Emerging markets delivered another uneven month. Chinese equities drifted lower as sentiment remained fragile, not helped by property developer Vanke, which shocked creditors by proposing for the first time to delay paying a local bond. Elsewhere, performance was more robust, with Brazil once again among the stronger markets and parts of emerging Europe and Asia proving relatively resilient.

Source: Bloomberg as at 30 November 2025.

US equities veered from one extreme to another in November, as investors went from fretting about AI-driven bubbles to growing optimism around shifting Federal Reserve policy expectations. A late-month Thanksgiving rally lifted the S&P 500 narrowly into positive territory, extending its winning streak to seven months for the first time since 2021. The rally broadened, with gains in the blue-chip Dow Jones Industrial Average and the Russell 2000 index of smaller companies.

The tech-heavy Nasdaq, however, lagged as investors reassessed the lofty valuations of the AI leaders, with the Magnificent 7 declining as a collective for the first time since March. Much of the news flow centred on Nvidia, which logged its weakest month since 2022 amid concerns that Google’s Gemini 3 model, which runs on its own TPU chips, could pose a challenge to Nvidia’s hardware. The world's biggest company fell by 13% during the month, while Alphabet climbed nearly 14%.

In general, sentiment improved as the government shutdown ended and expectations for further Fed easing firmed. Policymaker comments boosted confidence that a third rate cut of 2025 could arrive in December, even as the macro picture became more nuanced: inflation showed signs of firming while labour-market data softened, leaving the Fed to balance growth support against renewed price pressures.

Corporate earnings were generally better than expected, with investors beginning to look towards 2026 outlooks for a steer on where future market leadership may be found.

South African capital markets were broadly firmer in November, supported by improving domestic fundamentals and a more constructive global backdrop.

Resources rallied on the back of stronger precious metal prices, with the precious metals & mining sector the standout performer. Local bond yields fell meaningfully, with the 10-year government bond yield closing the month at around 8.5%, supported by increased foreign demand and compelling real yields relative to global peers.

On the macroeconomic front, the South African Reserve Bank (SARB) resumed its easing cycle after cutting its key policy rate by 25 basis points to 6.75%, as expected, while revising its 2025 growth forecast modestly higher to 1.3%. Further support came in the form of National Treasury’s official adoption of the new 3% inflation target, which replaces the previous 3–6% band. National Treasury also announced the launch of its first-ever Infrastructure and Development Finance Bond, aimed at funding critical infrastructure and stimulating long-term economic growth and employment. Meanwhile, global ratings agency Standard & Poor’s raised South Africa’s sovereign credit rating from ‘BB-’ to ‘BB’ with a positive outlook.

In other news, headline inflation rose to 3.6% in October, marginally below market expectations, while core inflation eased to 3.1%. Retail trade rose by 3.1% year-on-year in September, well above the downward-revised 2.2% increase in August. The rand benefitted from the positive momentum, edging firmer to around R17.3 per US dollar.

Source: Bloomberg as at 30 November 2025.

November was a weak month for Chinese equities, as soft macroeconomic data, a broader AI-driven global tech sell-off and the government’s intensifying focus on anti-involution weighed on sentiment.

On the data front, the official manufacturing PMI came in at 49.2, a slight improvement on October. Services activity also weakened, falling to its lowest level in three years and underscoring persistent softness in domestic demand. Retail sales grew 2.9% year-on-year, the slowest pace since August 2024, highlighting the continued challenge of boosting consumer spending.

Global risk appetite was also pressured in November. Renewed concerns about an AI-driven bubble triggered a broad tech correction across Asia, although markets saw a partial recovery towards month-end. Sentiment was further hit by fresh property-sector worries after state-owned developer China Vanke delayed an upcoming onshore bond payment, reviving questions about the depth of government support for stressed real-estate entities.

Despite subdued domestic data, foreign investors have been quietly rebuilding positions in Chinese equities. According to the Institute of International Finance, offshore inflows into China’s stock market reached US$50.6 billion between January and October 2025, up sharply from US$11.4 billion over the same period in 2024. This suggests that, despite ongoing structural challenges and complex US–China dynamics, global investors are somewhat more constructive on China than in recent years.

The MSCI China All Shares Index was down 2.4% in US dollars in November, but expectations of additional stimulus in early 2026 to combat slowing growth increased over the month.

Emerging markets (EM) gave back a little ground in November, although year-to-date gains remain robust heading into the final leg of the year. The MSCI Emerging Markets Index fell 2.4% for the month in US dollars.

Two themes stood out across EM: i) consolidation in the AI-tech complex as fears of an AI bubble lingered, triggering an Asia tech unwind; and ii) improving disinflation dynamics and policy expectations in parts of Latin America, which supported regional performance. The late-month stabilisation in risk appetite, as markets priced in a high probability of a US Federal Reserve rate cut in December, was ultimately not enough to push EM equities back into positive territory.

China underperformed as early-month news of a trade truce briefly buoyed sentiment before the AI-tech wobble reasserted itself. Broader profit-taking and a renewed re-rating of property and related financials – sparked by property developer Vanke’s difficulties – also weighed on the market. This was despite decent performance from internet and select tech stocks, which have become China’s main market drivers. Elsewhere, Taiwan and South Korea, both core to the AI supply chain, also retreated as investors locked in profits and reassessed near-term AI positioning, tracking the dip in the US ‘Mag 7’, which posted its first negative return after seven consecutive gains.

On a more positive note, India’s market scaled new highs, supported by more attractive valuations, an earnings recovery and a resilient economy benefitting from supportive fiscal and monetary policy. Latin America was another bright spot, with Brazil in particular advancing on cooling inflation and the prospect of easier policy into 2026.

At the sector level, information technology was the main drag on performance over the month as consolidation across semiconductors and AI-linked hardware set in after strong gains year to date.

European markets performed relatively well versus global counterparts with tentative signs of progress in the Ukraine peace talks, which were boosted by comments from President Trump. Although nothing concrete has yet resulted, with the issue of territory the key sticking point, there were pockets of weakness among assets more sensitive to the conflict, with defence stocks declining over the month. Elsewhere, banking shares were also weak as falling interest rates put pressure on their net interest margins. However, corporate earnings were broadly strong, with more than half of the Stoxx 600 beating expectations, and minutes from the ECB’s October meeting suggested the central bank’s rate-setters viewed inflation risks as ‘fairly balanced’, lifting sentiment.

In the UK, the government’s Budget was the only show in town. Billed as a balancing act between boosting growth and repairing public finances, equities were initially weak amid concerns that tax hikes could put a dampener on consumer spending and economic activity. This appeared to be confirmed in the middle of the month when Q3 GDP growth came in below expectations at 0.1%, hampered by manufacturing and a general weakening in sentiment. However, the Budget itself was received positively from a market perspective, both in terms of gilts and equities, with more fiscal headroom and less sweeping tax rises than expected ensuring it didn’t turn into the more negative risk event that some had feared. On the monetary front, the Bank of England held rates at 4%, although the 5-4 split on the committee prompted markets to price in a December cut.

The emerging market (EM) fixed income asset class continued to show resilience over November, with all segments on track to deliver a solid year of performance.

It was a particularly strong month for the local currency debt market (JPMorgan GBI-EM GD), which gained 1.3% in US dollar terms. Performance was driven by EM currencies benefitting from a weaker US dollar, particularly in Latin America, with the Colombian peso and Dominican peso among the top performers. Local bonds also added to returns, with South African rates rallying after the government’s budget was well received by the market.

The sovereign hard currency debt market (JPMorgan EMBI GD) posted gains of 0.4%, driven by the high-yield segment (0.8%), while investment-grade returns were flat. Both investment-grade and high-yield markets benefitted from falling US Treasury yields, although in investment-grade the effect was muted by spread widening caused by increased US corporate issuance. From a regional perspective, African markets outperformed, while in Latin America, Ecuador’s bonds rallied following a credit rating upgrade by Fitch to B-.

The EM corporate debt market (JP Morgan CEMBI BD) saw a modest gain of 0.2%, with investment-grade markets outperforming high yield. Both markets were aided by the decline in US Treasury yields, but a widening of credit spreads – particularly in the high-yield segment – dampened returns. On a sector basis, real estate returns were negative, primarily driven by China where bond prices continue to be under pressure as physical property sales remain weak.

Source: Bloomberg as at 30 November 2025.

US

The longest US government shutdown in history ended in November, and its impact on the bond market was significant. The prolonged disruption – lasting 43 days – constrained the flow of economic data, resulting in a sharp swing in market expectations around a December Federal Reserve (Fed) rate cut. In the first half of the month, hawkish Fed minutes and better US economic activity data meant the market was pricing in a low (25%) probability of a rate cut, but this rebounded to around 80% by month-end following dovish comments from some Fed members. US Treasury yields fell further upon reports that Kevin Hassett – previously a supporter of additional rate cuts – had emerged as a leading contender for the next Fed chair. A bull steepening of the Treasury yield curve ensued, as dovish expectations meant shorter-dated yields declined more meaningfully than longer maturities.

UK

Markets responded positively to the UK government’s Budget announcement at the end of November. Gilts rallied on more positive developments around UK fiscal policy, coupled with the Debt Management Office’s announcement of plans to reduce the share of long-dated government bond issuance. However, concerns remain over the fact that measures to improve the fiscal balance won’t come into force for a few years, and their impact on inflation is unclear. This followed an initial sell-off mid-month, after reports that the government would not raise income tax reignited doubts about fiscal sustainability. Despite these notable intra-month moves in Gilt yields, the curve ended the month largely unchanged. The Bank of England (BoE) held rates at 4% at the November meeting in line with market expectations – although four out of nine members voted in favour of a cut. This more dovish outcome, coupled with inflation falling to 3.6%, strengthened the case for a rate cut in December.

Europe

Minutes from the European Central Bank’s (ECB) October meeting – when interest rates were held at 2% - confirmed that rate cuts are unlikely in the near term. This is reflected in current market pricing with no interest rate moves expected over 2026. Economic data released in November indicated that European growth remains resilient overall, and inflation remains close to the ECB’s 2% target. A renewed focus on the German government’s fiscal plan drove up bund yields across the curve.

Japan

In Japan, government bond yields rose sharply across the curve, with longer-dated yields rising to their highest levels in decades. Prime Minister Takaichi’s announcement of a JPY21.3 trillion economic stimulus package – larger than the market anticipated – prompted renewed concern about Japan’s debt burden, putting pressure on bond prices and driving the yen weaker against the US dollar. Exports were weaker as a result of US tariffs, which weighed on economic growth. Meanwhile, the Bank of Japan (BoJ) turned more hawkish, with comments from Governor Ueda at the end of the month leading markets to raise expectations of a rate hike in December.

Source: Bloomberg as at 30 November 2025.

Credit markets in the US had a positive month overall, with agency mortgage-backed securities (MBS), investment-grade and high-yield bonds all performing well. Spreads were broadly unchanged across these markets, but falling US Treasury yields and increased expectations of a December rate cut from the US Federal Reserve meant that returns were positive.

In Europe, investment-grade bonds had a negative month in terms of performance, with higher sovereign bond yields and wider spreads weighing on returns. European high-yield bond returns were broadly flat.

In the loan space, European loans outperformed their US counterparts. Spreads were tighter in Europe against a backdrop of moderately higher sovereign bond yields but widened in the US where Treasury yields fell.

Returns were mixed within the collateralised loan obligation (CLO) market. European CLOs had a positive month, helped by marginally tighter credit spreads and carry (income). In the US, positive performance in higher-rated (less-risky) CLO tranches was offset by notable spread widening in lower-rated tranches, resulting in negative returns over the month.

Commodities were mixed in November. Oil declined despite the major oil-producing nations pausing plans to increase output next year, in response to concerns of a glut. Brent crude slipped about 3% to US$63 per barrel, on expectations of soft demand growth. US natural gas prices rose sharply, primarily due to forecasts for colder weather.

Gold delivered another positive month, rising almost 6% to US$4,239 per Troy ounce. The precious metal continued to be supported by robust demand from central banks and investors seeking to hedge against geopolitical uncertainty and a weakening US dollar. According to a Financial Times report, China’s central bank may be buying 10x the amount of gold that it reports officially as it diversifies away from the US dollar. The shares of gold-producing companies outperformed gold, with a 15% gain for the NYSE Arca Gold Miners Index in November. Silver maintained its very strong run, rising 17% to US$56 per ounce.

Among base metals, copper closed the month almost 3% higher as fears of a tight market persisted. Supply outages at major mines have constrained supply, while the demand outlook remains robust and is showing signs of strengthening. Iron ore and aluminium prices posted small declines.

In agriculture, soybeans gained as recent progress in trade talks saw China increase its purchases of US beans. Corn recorded a relatively small monthly price increase, while wheat fell back slightly.

Source: Bloomberg as at 30 November 2025.