The UK equity market rose in November as consumer confidence rebounded despite sluggish growth and rising inflation.
US stocks gained ground, outperforming global equity markets on news of Donald Trump’s election victory.
Asia Pacific equity markets declined, with Taiwan and Korea slipping back.
In November, European equities made small gains in local currency terms, with Germany faring better despite tariff headwinds, while France struggled due to political turmoil. The UK market rose as consumer confidence rebounded. The BoE cut rates to 4.75%. US stocks gained post-Trump’s election, with major indices performing well. Asia Pacific markets delivered negative returns, with China underperforming. Emerging markets declined, led by Asia Pacific, while Emerging Europe gained.
European equities made small gains over November in local currency terms (but factoring in currency moves, lower in GBP terms), with Germany faring better regionally despite the potential of tariff headwinds, while France struggled due to the ongoing political turmoil and fiscal worries.
From a sector perspective, technology, communication services and industrials fared best, while materials and consumer staples were among the relative underperformers.
In macroeconomic news, Eurozone headline inflation rose from 2.0% in October to 2.3% in November. This was in line with expectations and was almost entirely caused by a base-effects driven increase in energy inflation.
The UK equity market rose in November as consumer confidence rebounded despite sluggish growth and rising inflation. The Bank of England (BoE) cut rates to 4.75%, signalling no further cuts this year. UK inflation rose to 2.3% in October, driven by energy prices. Gross Domestic Product (GDP) growth was 0.1% in third quarter. Consumer confidence improved, and retail sales grew. Government borrowing hit £17.4bn in October.
US stocks gained as Donald Trump’s election victory boosted investor sentiment. Major indices like the S&P 500, Russell 2000, and Nasdaq performed well. Tesla surged, and US banks rose on deregulation hopes. The Federal Reserve (Fed) cut interest rates by 25 basis point (bps) to 4.75%. US Consumer Price Index (CPI) inflation rose to 2.6%, while core CPI stayed at 3.3%. The US economy added 12,000 jobs in October, and in the third quarter GDP grew by 2.8%. The Composite PMI (Purchasing Manager’s Index) was 54.1, indicating expansion.
Asia Pacific equity markets delivered negative returns, with China underperforming. Taiwan and Korea were impacted by Trump's election and his protectionist policies. Australian equities advanced due to improving consumer sentiment and a robust labour market. China's support package fell short, shaking investor confidence. Taiwan and Korea faced declines due to trade policy concerns. Indian equities were flat, pressured by Adani Group's issues and rising inflation. Japan's markets rose, aided by a weaker yen, while Australia's market advanced on positive economic indicators.
Emerging market equities declined, led by Asia Pacific, with smaller falls in Latin America, while Emerging Europe gained. The strong US dollar pressured regional currencies and equity markets. Brazilian equities fell as the central bank raised the Selic rate to 11.25%. Mexico's market ended lower with a rate cut to 10.25%. Hungary's market advanced with lower-than-expected inflation. The UAE market gained, driven by a surge in initial public offering (IPOs) and significant government spending on infrastructure.
Government bond markets had a strong month, especially in Europe, with investors anticipating faster ECB rate cuts. The Fed cut rates by 25bps to 4.5%-4.75%, and UK rates fell to 4.75%. German bunds led gains, returning 2.39%, while French bonds rose 1.82%. US economic data showed strength, but European PMIs missed expectations. Corporate bonds performed well, with US IG spreads hitting record lows. November saw over €50 billion in euro/sterling IG bond issuance.
Monthly fixed income ETF update
November was a broadly positive month for bond markets as yields rallied into month end. Read our latest thoughts on how fixed income markets performed during the month and what we think you should be looking out for in the near term.
Fixed Income: The argument for bonds is the strongest it has been in years
We believe the case for investing in bonds is the strongest it has been since the GFC. Invesco’s experts from across Fixed Income teams and asset classes share their views on the outlook and opportunities.
European Real Estate: A new real estate value cycle
Our experts unpack the 2025 outlook on the evolving real estate market. We explore the implications of recent trends and ESG considerations on the market.
Equities: An improving landscape in the year ahead
The 2025 equities outlook is improving. Balance sheets look healthy, and many stocks are attractively valued, though geopolitical risks remain. Find out more.
Private credit: A strategic source of income in portfolios for the year
Our experts unpack the 2025 market outlook on the evolving private credit market. We explore the implications of recent trends on bank loans, distressed credit and direct lending.
The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.
Views and opinions are based on current market conditions and are subject to change.
This is marketing material and not financial advice. It is not intended as a recommendation to buy or sell any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication.
EMEA4082382
