Global macro conditions in November reflected a slowing and uneven global economy, with policy uncertainty, volatile data, and fading momentum across several key regions. Market performance was broadly mixed as investors weighed decelerating growth against shifting monetary policy expectations.

United States: Liquidity, Data Distortions, and Valuation Re-pricing

US equities staged a late-month recovery supported by rising expectations of a December Federal Reserve rate cut, but overall sentiment remained fragile. Elevated volatility, softening labour data, and sticky services inflation left investors cautious. Fed officials signalled support for a third consecutive rate cut, a rare stance given inflation remains above target, thus complicating policy credibility.

Market Performance

• S&P 500: +0.2%
• Dow: +0.3%
• Nasdaq: –1.5% (breaking a seven-month upward trend as rotation out of high-valuation AI names intensified)

Data Distortions After Shutdown. The 43-day government shutdown severely disrupted economic data:

• October & November CPI was delayed, limiting real-time inflation visibility.
• Non-farm payrolls were delayed, reducing labour-market clarity.
• Consumer and retail survey data displayed atypical volatility due to gaps in collection.

Latest Available Data (September)

• CPI: +0.3% (persistent services inflation)
• Retail sales: +0.2% (slowing consumption heading into Q4)
• Consumer confidence: weakest since April (rising recession concerns)

Eurozone: Modest Growth Upside, Weak Domestic Demand

European equity performance was muted, reflecting external support but weak internal fundamentals.

Market Performance

• CAC 40: flat
• DAX: –0.5%

Macro Breakdown

• GDP +0.2% in Q3, marginally above expectations.
• Growth driven primarily by strong US import demand boosting eurozone exports.
• Household consumption subdued.
• Fixed investment flat, offering little support.

Structural Pressures

• Ongoing weak industrial output, especially in Germany.
• PMIs remain in contraction, signalling deteriorating forward demand.
• Fragmented credit conditions between core and peripheral economies persist.

United Kingdom: Sticky Inflation and Weak Output

UK markets ended flat as investors balanced slowing growth against persistent inflation.

Macro Indicators

• Headline CPI: 3.6% YoY (from 3.8%)
• Core CPI: 3.4% YoY (from 3.5%)
• Q3 GDP: +0.1% (down from +0.3% in Q2)

The UK economy remains stagnant, with inflation proving sticky across services categories. Markets continue to price a slow and shallow rate-cut cycle from the Bank of England.

Asia: China Under Pressure, Japan Outperforms

China: Persistent Structural Weakness:

Asian markets were mixed, with China remaining the clear regional laggard.

Market Performance

• Shanghai Composite: –1.7%
• Hang Seng: –0.2%

Investment & Activity Data - Indicators showed broad-based weakness:

• Fixed-asset investment: –1.7%
• Infrastructure investment: –0.1%
• Manufacturing investment: –2.7%
• Industrial output and retail sales both slowed further, highlighting insufficient domestic demand.

PMI Results

• Manufacturing PMI: 49.2 (contraction)
• Non-manufacturing PMI: 49.5 (below expansion)

Persistent contraction underscores limited impact from policy efforts and ongoing structural headwinds.

Japan: Regional Outperformer

Japan remained a standout performer amid regional volatility.

Market Performance

• Nikkei: +4.1%

Foreign inflows rose on the back of attractive valuations, governance improvements, and stable earnings expectations.

Macro Indicators

• Inflation: 3.0% YoY (from 2.9%)—highest since July.
• Inflation remains above the BoJ’s target, strengthening expectations of a gradual departure from ultra-loose policy.

Japan continues to be treated as a relative safe-growth market in Asia.

South Africa: Currency Strength, Rating Upgrade, and Sector Divergence

South Africa’s equity market delivered a ninth consecutive monthly gain.

Market Performance

• ALSI: +1.6%

Key Drivers

• Stronger rand, trading below R17/$ for the first time in over two years.
• Higher commodity prices supporting resources.
• S&P rating upgrade (BB– → BB, positive outlook).

Sector performance remained bifurcated.

• Resources (+10.2%) significantly outperformed amid higher metals prices and renewed interest in inflation-hedge assets.
• Property (+7.1%) benefited from expectations of a shallower domestic rate path.
• Financials (+2.1%) posted modest gains.
• Industrials (–5.4%) lagged materially as technology-exposed names sold off in line with global sentiment.

Top Performers

Sibanye Stillwater (+20.6%), Anglogold (+20.3%), Pan African (+17.9%), DRDGold (+15.9%), Impala (+15%).

Major Underperformers

Blue Label (–20.3%), Naspers (–12.3%), Prosus (–11.2%), Foschini (–9.3%), Life Healthcare (–9.0%), MTN (–8.7%).

Headline inflation in October rose slightly to 3.6% YoY (from 3.4%), while core inflation eased to 3.1% from 3.2%. With the inflation trajectory remaining broadly favourable, the SARB delivered the expected 25 bps rate cut, lowering the repo rate to 6.75% and prime to 10.25%. The well-received MTBPS reinforced confidence in South Africa’s fiscal direction and contributed to sustained inflows into domestic assets.