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Global Market Overview | November 2025
02 December 2025
Ashburton Investments
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Written by the FNB Wealth and Investments Research team
Global markets were mixed in November (MSCI World Index: +0.3%, MSCI Emerging Markets Index: -2.4%) as heightened volatility permeated through the equity and bond space. This was driven by uncertainty surrounding the United States (US) Federal Reserve’s path going forward as a delay in key economic releases due to the prolonged US government shutdown, left investors scrambling for clues on the Fed’s final move for the year. Policy uncertainty in conjunction with fears around stretched artificial-intelligence (AI) valuations, and whether or not the billions spent will generate reasonable and sustainable returns, amplified the sombre mood across markets and led to a swift sell-off in the tech sector (Magnificent 7 Index: -1.1%) as well as a $1.2 trillion wipe-out in the cryptocurrency space – Bitcoin was down ~16.5% for the month. The CNN Fear & Greed Index, a widely used measure of sentiment/mood, deteriorated rapidly into “extreme fear” territory.
It was a busy month for the US (S&P 500 Index: +0.2%) with several key events keeping investors on edge including the longest US Federal Government shutdown on record. The shutdown ended mid-month after 43 days, which helped to restore some confidence among investors. However, heightened uncertainty over the Fed’s next move kept markets volatile and overshadowed a relatively robust earnings season. Surprisingly, US equities completely erased their November losses in the last few days of the month as the return of economic releases fuelled expectations for a rate cut, along with news that White House National Economic Council Director, Kevin Hassett, is the leading contender to become the next Fed chair (a choice investors see as aligning with President Trump’s agenda for lower rates) providing a further push. Fed funds futures are pricing in a 99% probability of a December rate cut, which is a stark contrast compared to the 30% probability that was priced in earlier in the month.
Moving over to Europe (Euro Stoxx 600 Index: +1.0%), the region pushed higher with the latest United Kingdom (UK) budget having bolstered expectations for the Bank of England (BoE) to resume cutting interest rates. The money markets are indicating that there is a greater than 90% chance that the BoE will lower rates at its upcoming December meeting. In keeping with the AI theme, the European Central Bank (ECB) also raised concerns about stretched valuations in the US tech space and noted that investor decisions are being driven by fears of missing out (FOMO) or could be betting on tail risks not materialising. The ECB also highlighted high market concentration as a key risk and went on to caution that sharp price adjustments could be on the cards in the event of a negative surprise.
Chinese equities (MSCI China Index: -2.3%) were dragged lower by a more widespread cautious/risk-off mood. Generally soft economic data and ongoing weakness in the property market also had a negative impact on monthly returns. Renewed optimism about the Federal Reserve’s rate cut in December catalysed an improvement into month end.
The local bourse had another strong month with the All Share index adding 1.7% (USD terms: +3.1%). This was bolstered by several positive factors including a credit rating upgrade from S&P Global Ratings with the agency citing improved fiscal stability, stronger growth prospects, and progress on reforms at state-owned entities like Eskom as driving the decision. This marked the first upgrade for the country from S&P in 20 years and included a positive outlook, though it still remains two notches away from investment grade. A well-received Medium-Term Budget Policy Statement (MTBPS) as well as another rate cut from the South African Reserve Bank’s (SARB) also assisted. The Monetary Policy Committee (MPC) unanimously voted to cut rates by 25bps at its November meeting, lowering the policy rate to 6.75%.
Outlook
Local
- This year was turbulent as policy uncertainty and heightened geopolitical tensions drove market volatility. That said, global activity proved resilient and emerging markets were strengthened by ongoing structural reforms that have upheld more conducive financial conditions. Going into 2026, the risk of abrupt and incoherent policy shifts is likely to persist, compounding the threat of asset repricing, rising inequality, and military conflict. All the while, climate change is accelerating. Therefore, medium-term growth will likely be tepid when compared to the pre-pandemic period, and downside surprises could emerge.
- South Africa’s exports have performed better than feared but ongoing tensions with the US had a pulpable impact on sentiment. Fortunately, structural reforms are progressing alongside fiscal consolidation and efforts to reduce living and borrowing costs. Furthermore, there has been greater calm in the Government of National Unity. Combined, the factors have sustained a rising trend in capital inflows and broader foreign interest in local markets, as well as a stronger rand.
- Imported inflation has softened and is supporting downside surprises in goods inflation. Therefore, even as services inflation continues to normalise, total core inflation remains contained. Restrictive monetary policy should maintain some slack in the economy, restraining cost passthrough, while guiding inflation expectations towards the new 3% objective. With inflation embedded at 3%, monetary policy should ease more meaningfully – as both nominal and real interest rates fall.
- This should usher in more robust uptake of credit and support spending as well as investment growth. Furthermore, an improvement in the operating environment should bode well for re-industrialisation, the intensification of external trade, and faster employment creation.
- In a nutshell, we have seen household spending upholding growth this year but look forward to improved industrial dynamics going into 2026. Higher commodity prices should lead the volume gains expected from more energy and logistical efficiencies. As more capacity is utilised, the case for expansion will be made and fixed investments will start to contribute to economic growth. The risks from the global backdrop (including dumping), socioeconomic tensions, and political wrangling ahead of the municipal elections are worth monitoring.
Global
- The US government shutdown ended on 12 November, after 43 days, making it the longest shutdown ever. Data releases were severely impacted by the shutdown, with the October employment report and inflation data not being published. This will muddy the water for the Fed, as the Federal Open Market Committee (FOMC) will meet in December without a full picture of inflation and employment dynamics. This played out in the rates markets in November, as the probability attached to a cut ranged from 100% to 30% and back up to an almost certainty by month end.
- Growth expectations generally improved over the last month. Tariffs have not (yet) negatively impacted global growth (as expected after Liberation Day) and fiscal stimulus from Japan, Europe and China has dented the impact.
- As mentioned, US CPI was not released in November. In general, though, goods inflation is showing some evidence of tariff passthrough, but housing rental inflation (and owner's equivalent rent) is moderating. Inflation expectations are still elevated; University of Michigan one-year inflation expectations printed 4.5% from 4.6% in the previous month. This is still some way off the 2% target of the Fed. Shelter inflation and core services should continue to trend lower, causing overall inflation to move down towards target, but risks remain that inflation proves “stickier” than expected (depending on the rates where tariffs eventually settle).
- The Fed cut interest rates by 0.25% to a range of 3.75% to 4.0% at the October meeting, as expected. However, the cut was not unanimous, and Fed Chair Jerome Powell made it clear that a rate cut in December is not a done deal. There appears to be strongly differing views in the FOMC, and limited data visibility due to the government shutdown. Markets are forecasting a close to 100% chance of another cut in December, as well as another two cuts in 2026. The Fed also announced an end to their Quantitative Tightening (QT) programme, effective 1 December 2025.
- China’s economic data mostly disappointed to the downside in November. The property sector showed no signs of improvement, retail sales disappointed, as did industrial production and fixed asset investment. We await news from the Fourth Plenum.
- The US dollar (as measured by the DXY index) was flat for November, but still down 7% for the year. Capital flows for the year have been out of the US into other less expensive markets as uncertainty remains, with Europe initially, and emerging markets more recently, the biggest beneficiaries.
- Gold had a volatile month but still performed well, rising by 5.9% to $4, 239 per fine ounce. Reasons include central bank buying, geopolitical tensions, uncertainty around policies, lower interest rates, and growing investor appetite. Platinum prices rallied into month end.
- Oil continued its weakening trend, with Brent crude ending the month down 2.9%, at $63.20 a barrel.
- Given all the above uncertainties, we are closely aligned to our strategic asset allocation benchmarks.
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Our team of investment specialists is ready to discuss how we can help you achieve your financial objectives.
Call us on+27(0) 860 000 339
Email us onquery@ashburton.co.za
Johannesburg Head Office2 Merchant Place, 1 Fredman Drive, Sandton, Johannesburg, 2196
