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Quick TakeGlobal volatility amid shifting rate expectations: Global equity markets were mixed in November as investors weighed sticky inflation, evolving interest rate expectations and ongoing geopolitical risks. The S&P 500 rose 0.25%, the Dow gained 0.48%, while the Nasdaq fell 1.45% and the Russell 2000 added 0.96%. US markets swung sharply during the month before recovering into month-end, helped by a late shift towards a high probability of a December Federal Reserve rate cut. US bond yields eased, with the 2-year falling to 3.50% and the 10-year to 4.03%, while gold continued its strong run. Europe steadies on earnings resilience and policy clarity: In Europe, the STOXX Europe 600 rose 0.98%, with several major indices remaining near record highs. Sentiment improved as inflation stayed benign, Q3 earnings beat expectations and forward profit forecasts were revised higher. Central banks largely held policy steady, while softer UK inflation at 3.6% and weaker labour data saw markets price in a greater likelihood of Bank of England rate cuts. French political and budget uncertainty persisted but did not derail the broader improvement in the regional outlook. Australia lags as sticky inflation restrains optimism: In Australia, the ASX 200 fell 2.66%, its weakest month since March, as cautious earnings updates and offshore leads weighed on sentiment. The Reserve Bank left the cash rate at 3.60% but flagged lingering inflation pressures, reinforced by stronger employment data and a hotter monthly CPI print. Bond yields moved higher across the curve, while the Australian dollar was broadly steady, rising 0.18% to US$0.6558. |
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Snapshot
Global equity markets were mixed in November as investors navigated shifting interest rate expectations, ongoing geopolitical uncertainty, and a series of volatile moves across major benchmarks. While the month began with renewed concerns around sticky inflation and the possibility of delayed monetary easing, sentiment improved late in the period as central bank commentary turned more supportive. Government bond yields declined across several regions, the US dollar softened slightly, and gold extended its strong year-to-date run. Oil prices continued to drift lower, reflecting both supply dynamics and early signs of progress in geopolitical negotiations.
In the United States, equities delivered a subdued but positive performance overall. The S&P 500 rose 0.25%, the Dow gained 0.48%, while the Nasdaq fell 1.45%, snapping its multi-month winning streak. The Russell 2000 added 0.96% as smaller companies enjoyed a modest rebound. Markets were volatile throughout the month, with the S&P 500 having been down more than 4.5% at one point before recovering into month-end. A key driver of sentiment was the evolving outlook for interest rates. Early in November, several Federal Reserve officials emphasised caution around near-term easing, which pushed expectations for a December rate cut below 30%. However, more dovish comments late in the month reversed much of that shift, with markets assigning a high probability to a December reduction by month-end. Bond yields declined accordingly, with the US 2-year falling to 3.50% and the 10-year easing to 4.03%. The broader economic backdrop remained resilient, supported by firm GDP estimates and solid corporate earnings trends.
European equities also ended the month mixed, with the STOXX Europe 600 up 0.98%. Several major indices remained near record highs, helped by improving macro visibility, benign inflation data, and stronger-than-expected Q3 earnings results across the region. Corporate sentiment continued to recover, with forward earnings expectations broadly revised higher. Central banks largely remained on hold, though markets increasingly priced the potential for Bank of England rate cuts as UK inflation eased to 3.6% and labour-market conditions softened. Fiscal policy developments also drew attention, particularly the UK Budget, which added to the government’s fiscal buffer through a series of tax measures. Meanwhile, France continued to experience elevated political and budget uncertainty, which contributed to a cautious tone among investors. Despite this, Europe’s overall economic outlook improved, underscored by ongoing expansion in private-sector activity and clearer policy settings heading into 2026.
In Australia, the ASX 200 declined 2.66% in November, marking its weakest monthly performance since March. Market sentiment was weighed down by cautious earnings updates, unfavourable offshore leads, and renewed concerns around the domestic inflation outlook. The Reserve Bank left the cash rate unchanged at 3.60% but noted signs that inflationary pressures may persist for longer than expected. Stronger-than-anticipated employment data and a hotter monthly CPI reading reinforced expectations that the RBA may stay on hold for an extended period. Bond yields moved higher across the curve, while the Australian dollar was little changed, rising 0.18% to US$0.6558.
Overall, November was defined by volatility but not a material change in the global economic narrative. While policy uncertainty remains, easing inflation in key regions, resilient macro conditions, and supportive corporate earnings trends helped markets stabilise into month-end. The focus now shifts to December’s central bank meetings and year-end economic data, which will provide important signals for the interest rate outlook and the market environment as we head into 2026.
Key Stocks
Ryan joined Cutcher & Neale as a Portfolio Manager in January 2023, with over 15 years' experience managing multi-asset investment portfolios, specialising in fundamental equity analysis. Ryan holds the Chartered Financial Analyst (CFA) designation and is Chairperson of the Cutcher & Neale Investment Committee, which oversees clients' Australian Share, International Share, Fixed Income and Cash exposures.
