Market Update - Month Overview (November 2025)

Summarised by Dylan Sinclair (Report via Zenith)

International Markets Summary

Global markets paused in November following a strong multi-month rally, as concerns over heavy AI-related capital expenditure and stretched valuations triggered profit-taking across major technology names. Despite broadly solid US earnings, where both mega-cap and wider market results exceeded expectations, AI-exposed stocks such as Nvidia and Microsoft pulled back, with weakness also extending to more speculative growth segments and even bitcoin. Developed markets posted mixed results, with the US finishing slightly positive after dovish comments from several Fed officials revived expectations of a December rate cut, while Europe and the UK outperformed thanks to stronger currencies and more stable economic conditions. Sector performance was defensive, with healthcare, insurance, and utilities outperforming as IT lagged. Emerging markets fell after sharp reversals in Korea and Taiwan, though Brazil delivered strong gains on improved trade and diplomatic developments. Bond yields fluctuated as markets balanced softer US labour data with messaging from global central banks, while expectations for several rate cuts in 2026 helped support overall valuations despite pockets of vulnerability.

Australian Markets Summary

Australian equities again underperformed global peers in November, with the ASX 200 declining as persistent inflation pushed markets to reprice interest rate expectations. Large caps were particularly weak, weighed down by the banking sector’s ongoing underperformance, although resources and healthcare posted positive returns. Despite this, underlying economic data showed improvement, business surveys and the latest GDP figures indicated strengthening conditions, supported by firmer household spending and investment. Markets now anticipate EPS (Earnings Per Share) growth above 8 per cent in the year ahead, but rising bond yields and expectations of a potential rate hike by late 2026 have constrained valuations. Australian fixed interest was similarly pressured, with yields lifting materially on stronger activity and stubborn inflation. Overall, while pockets of the economy and select sectors are showing resilience, elevated inflation, higher bond yields, and weaker earnings trends among large caps continue to temper broader market performance.