Global Market Overview
Global markets entered November navigating a complex environment defined by slowing economic momentum, divergent monetary policy expectations, and an increasingly visible rotation across sectors and styles. Developed market equities delivered mixed results, with the MSCI World Index marginally positive, while the S&P 500 ended the month slightly higher in USD terms. The standout feature of global markets was the continued correction in the NASDAQ 100, which again posted negative returns for the month in USD terms, reflecting fading investor appetite for richly valued mega-cap technology shares following several quarters of narrow market leadership.
Adding to the uncertainty, the United States faced significant data gaps due to a 43-day federal government shutdown, the longest in history, which ran from 1 October to 12 November. Investors were forced to interpret the economic landscape through private-sector data, which collectively pointed to softening conditions—slower consumption, mixed employment indicators, and more cautious corporate spending. The Federal Reserve’s November Beige Book echoed this weaker tone, highlighting particular strain among lower-income households. The Fed itself appeared divided, with some officials arguing for a rate cut at the upcoming December meeting and others warning that inflation remains too high to ease prematurely. Market pricing increasingly reflected expectations of rate cuts in 2026. Political noise around reports that Kevin Hassett may replace Jerome Powell as Fed Chair had limited market impact, with investors focused squarely on the policy trajectory rather than personnel changes.
Economic data from other major regions painted a similarly nuanced picture. In the United Kingdom, GDP growth slowed to 0.1% in Q3, weighed down by a 10.3% drop in auto and transport equipment output following the cyberattack at Jaguar Land Rover. Inflation eased to 3.6% in October, allowing the Bank of England to strongly signal a potential rate cut in December. PMI data showed early signs of stabilisation as Manufacturing rebounded to 49.7 and Services rose to 52.3. The UK Budget, however, introduced several measures that will meaningfully increase the long-term tax burden, including the new mansion tax and extended threshold freezes.
In the Eurozone, inflation held steady at 2.1%—very close to the ECB’s target—while PMIs suggested a gradual stabilisation in both manufacturing and services. Although some policymakers have warned that falling energy prices may pull inflation below target in 2026, the ECB remains in no hurry to act, with no policy changes expected until at least mid-2026.
Across Asia, conditions remained varied. China continued to grapple with weak export demand and uneven domestic recovery. The PBOC held its benchmark Loan Prime Rates steady for a sixth consecutive month, signalling a preference for targeted fiscal support over further monetary easing. Consumer inflation rose 0.2% YoY in October—the fastest pace since January—driven by non-food categories, while core inflation strengthened to 1.2%. Manufacturing PMI softened to 50.6 and Services PMI drifted to 52.6 amid growing trade uncertainty, even as domestic orders improved. Notably, China is estimated to be accumulating gold at 7–10 times officially reported levels, a factor contributing to gold’s strong and stable performance globally.
Japan continued to experience firm inflation, with core CPI rising to 3.0% and the BOJ’s preferred core-core measure reaching 3.1%. The BOJ has signalled openness to renewed rate hikes as inflation remains well above the 2% target. GDP contracted 0.4% in Q3 under pressure from US tariffs, and PMI data showed manufacturing contracting sharply while services remained resilient.
In contrast, India stood out as a major economic outperformer. GDP surged 8.2% in Q3—its fastest pace in 18 months—supported by strong domestic demand, manufacturing strength and front-loaded production ahead of the festive season. Inflation plunged to 0.25% YoY following aggressive GST cuts and sharp declines in food prices. The RBI is widely expected to cut rates again in December, adding to the 100bps already delivered this year.
Commodities remained a bright spot, with gold and platinum both delivering strong monthly gains, supported by de-dollarisation trends, fiscal expansion globally, central bank demand, and supply constraints. Brent crude softened modestly, while industrial metals were broadly stable. The US Dollar retained its resilience, underpinned by superior US productivity and expectations that the ECB will remain more dovish than the Fed.
A key global market theme that strengthened through November was the rotation away from highly concentrated US mega-cap technology leadership toward real assets, including materials, energy, healthcare and precious metals. This aligns closely with the perspectives raised in our weekly investment meetings and represents a potentially durable structural shift as global supply chains, geopolitical dynamics and inflation norms continue to evolve.
South African Market Overview
South African assets extended their exceptional year in November, with equities, bonds and listed property all delivering strong returns relative to global markets. The FTSE/JSE All Share Index gained 1.7% for the month, lifting year-to-date performance to 36.2% in ZAR terms and 50% in USD—cementing South Africa’s position as one of the world’s top-performing equity markets in 2025.
The month’s major policy development was the SARB’s unanimous decision to cut the repo rate by 25 basis points to 6.75%, bringing the prime rate down to 10.25%. The MPC attributed the move to restrictive real interest rates, subdued growth, and benign inflationary pressure. Although headline CPI edged up slightly to 3.6% in October, the uptick reflected short-term, non-core drivers, while the underlying inflation environment remains anchored and broadly supportive. The SARB also noted that a stronger Rand and lower oil price assumptions have led to downward revisions to the inflation outlook and reaffirmed its commitment to the medium-term 3% inflation target.
Labour market conditions improved, with the unemployment rate declining to 31.9% in Q3—supported by job gains in construction, community and social services, and trade. While unemployment remains structurally high, this improvement contributed to a more constructive domestic macro narrative.
Bond markets responded emphatically to the rate cut, improved inflation dynamics and fiscal consolidation efforts. The standout development was the SA 10-year yield breaking below 9%, a technically and symbolically important level that reflects both rising domestic confidence and improving external sentiment toward South Africa. This drove strong performance across fixed income, with the All Bond Index returning 3.45% in November, extending its impressive year-to-date gains.
SA Listed Property delivered the strongest local performance for the month, rising 7.7%, supported by falling yields, improved operating conditions, and increased investor appetite for high-income, inflation-linked assets. Year-to-date, the sector has returned over 30%, benefiting from both the bond rally and better clarity around electricity supply and municipal reforms.
Equity performance broadened across sectors, with financials and value-oriented counters benefiting from improving domestic macro conditions, while resources remained supported by higher precious metals prices and a weaker USD environment. In contrast, some SA Inc counters continued to face headwinds from rising competitive pressures, including new fintech entrants in banking and intensified competition in retail from global online marketplaces.
The Rand strengthened 1.3% against the US Dollar during November, supported by the bond rally and stable global risk appetite. A sustained break below R17.05 would open the path toward R16.00, particularly if the Dollar weakens as global rate-cut expectations solidify.
South Africa’s narrative continues to improve as the combination of fiscal discipline, credible monetary policy, and favourable global sector dynamics aligns with deeply attractive valuations. While structural risks remain, they are increasingly overshadowed by compelling macro and market momentum.
Key Insights from Weekly Investment Team Meetings
- Global equities showing fatigue, with NASDAQ testing key support near 24,500.
- Strengthening rotation from concentrated tech leadership toward materials, energy, healthcare and gold.
- China’s true gold accumulation potentially 7–10 times higher than official reporting, reinforcing gold’s strategic role.
- SA 10-year yield breaking below 9% marks a major bullish technical shift.
- Rand strength consistent with improving fiscal conditions; break below 17.05 opens potential path to 16.00.
- Commodities showing powerful technical setups, including silver breaking a 40-year trendline.
- Strategic de-risking of SA and EM equities back to neutral, building cash buffers ahead of key global catalysts.
- Manager adjustments ongoing, reallocating from underperformers and adding to money market for liquidity.
- Growing preference for active managers aligned with rotation themes and quality exposures.
Portfolio Performance and Strategy
The themes that dominated November reinforce the structural shifts underway in global markets. Narrow mega-cap technology dominance is giving way to a broader phase in which value, real assets and cyclical exposures are increasingly rewarded. For MitonOptimal portfolios, this environment remains aligned with our barbell approach—balancing high-quality global growth exposures with tactical and strategic allocations to resources, commodities, and sectors tied to real economic activity.
Our earlier decision to remain overweight South Africa across asset classes has materially benefited clients, supported by strong equity returns, a resurgent property market and a powerful bond rally. The subsequent decision to de-risk SA and EM equities back to neutral was prudent after strong gains, while still leaving portfolios positioned to benefit from structural valuation support and improving macro conditions.
Globally, we maintain balanced exposure across quality, value and selected growth themes, with a disciplined emphasis on risk management given elevated uncertainty in global policy, earnings and geopolitics. Gold remains a core diversifier, supported by strong central bank demand and its role within the broader “financial repression” narrative.
As we move into the year-end, our positioning remains flexible, risk-aware and aligned with the evolving macro landscape—ready to take advantage of volatility and valuation opportunities as they present themselves.
Source of all data: Morningstar, unless otherwise stated.
Jacques de Kock
Quantitative Analyst & Portfolio Manager
The content of this article is for information purposes only and does not constitute an offer or invitation to any person. The opinions expressed are subject to change and are not to be interpreted as investment advice. You should consult an adviser who will be able to provide appropriate advice that is based on your specific needs and circumstances. The information and opinions contained herein have been compiled or arrived at from sources believed to be reliable and given in good faith, but no representation is made as to their accuracy, completeness or correctness. MitonOptimal South Africa (Pty) Limited is an Authorised Financial Services Provider Licence No. 28160, regulated by the Financial Sector Conduct Authority (FSCA) – Registration No. 2005/032750/07.MitonOptimal Portfolio Management (Pty) Limited is an Authorised Financial Services Provider Licence No. 734, regulated by the FSCA – Registration No. 2000/000717/07.