November started badly for equity markets as volatility returned but finished just marginally down for the month. After a strong run through early autumn, investors dialled back risk appetite as questions around extended valuations – particularly in U.S. mega-cap technology stocks – began to weigh more heavily on sentiment. The softening tone did not signal a drop in performance by these companies, rather a collective pause as markets reassessed the durability of recent momentum. We saw some continued capital expenditure by tech companies but this time, funded more by debt issuance than from their cash piles. Higher risk assets like cryptocurrency had a difficult month and bonds continued their crab-like sideways shuffle towards modest gains.
Source: Bloomberg
In the United States, equities began to cool after an extended year-to-date rally dominated by the “Magnificent Seven”. Corporate fundamentals remained broadly supportive – with 81% of S&P 500 companies beating expected earnings in Q3 and positive outlook statements. Investors grew more cautious about the increasingly concentrated markets and the stretched valuations associated with technology shares.
Elsewhere in the region, the end of the government shutdown allowed economic data releases to resume. Inflation continued its downward trend – reinforcing expectations that the Federal Reserve could cut rates further before the end of 2025. Meanwhile, consumer spending indicators pointed to a gradual softening economy. Together, these dynamics encouraged a more measured approach among market participants, prompting a rotation toward defensive sectors.
European equities, by contrast, finished the month up 0.8%, proving resilient despite the broader slowdown in global market momentum. Economic activity across the region remained sluggish, most notably in Germany’s industrial sector, where output data continued to point to underlying weakness. Even so, the composition of Europe’s equity market helped cushion returns. Limited exposure to the high-valuation technology names that weighed on U.S. indices provided a relative advantage, while renewed strength across luxury goods, select industrials, and consumer-facing areas helped offset softness elsewhere. Meanwhile, stabilising energy prices offered an additional tailwind to both household budgets and corporate margins. Taken together, these factors allowed European equities to deliver a more stable performance compared with the U.S.
The UK market also delivered small gains led by resilient energy and materials stocks. Bank of England commentary suggested a growing willingness to cut boosted returns.
Emerging markets faced a more challenging backdrop in November, weighed down by the tech market weakness and doubts about the durability of the Chinese economy – including news of slowing industrial production, muted retail sales, and persistent strains in the property sector. Countries with significant exposure to the global technology cycle, notably South Korea and Taiwan, also experienced heightened volatility, as semiconductor and hardware manufacturers tracked the U.S. technology index lower.
In Japan, equities closed the month down 1.5%, after several months of strong gains. The structural tailwinds supporting the Japanese market – namely ongoing corporate governance reforms and a persistently competitive yen – remain in place. However, rising inflationary concerns and a flare up in geopolitical tensions between Japan and China, followed diplomatic friction around Japan’s position on Taiwan.
Across bond prices edged up overall to counter weaker stock market sentiment.
Source: Bloomberg
Softer inflation readings across the U.S., eurozone, and UK supported a modest rally in government bonds, with U.S. Treasuries leading the way and finishing the month up 0.5% as market expectations shifted further toward a December rate cut from the Federal Reserve. Elsewhere, returns were more subdued. Japanese government bonds were among the weakest performers, declining 1.3% as yields rose amid growing concerns over the sustainability of proposed tax packages under the new government leadership.
At a global level, corporate bonds slightly outperformed government bonds, supported by resilient balance sheets and positive company results.
In the eurozone, German Bunds lagged as higher-than-anticipated government borrowing requirements dampened sentiment. Inflation continued its downward trajectory, with core inflation easing to 2.1% in October. However, with this still marginally above the ECB’s 2% target – and services inflation accelerating to 3.4% – the central bank may face some complex decisions around interest rates as it looks toward 2026. For now, though, broader European government bond markets remain largely flat.
Overall, November represented a natural consolidation phase as markets absorbed earlier gains, reassessed valuation risks, and looked ahead to 2026 with cautious optimism.
As we move into the final weeks of the year, the key themes remain largely unchanged: the durability of the drop in inflation, the path ahead for central bank policy around interest rates, and the ability of the global economy to sustain growth amid ongoing geopolitical and trade-related uncertainties. Major global themes such as AI adoption continue to evolve and technology companies have become a critical part of the investment universe. The questions being asked are can they support high valuations and deliver the growth to support the extraordinary level of debt-funded capital expenditure.
Against this backdrop, we continue to believe that regional diversification within equity portfolios can help enhance long-term returns while reducing concentration risk – an important consideration in a market environment where volatility may persist. Likewise, high-quality bonds retain a valuable role as both a source of steady income and a stabilising force within multi-asset portfolios.
At Fairstone, we specialise in providing tailored investment planning advice to help clients achieve their financial goals. Our experienced advisors offer personalised strategies designed to optimise growth, manage risks, and ensure diversification across a wide range of assets. By working with Fairstone, you can have confidence that your investment decisions are guided by expertise, adaptability, and a commitment to your long-term success.
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This publication was prepared by Bernard Walsh, Head of Investments & Pensions for Fairstone Asset Management DAC trading as Fairstone & askpaul.This publication is for general information purposes and is not an invitation to deal or address your specific requirements. The information is believed to be reliable but is not guaranteed. Any expressions of opinions are subject to change without notice. This publication is not to be reproduced in whole or in part without prior permission. Articles should not be relied upon in their entirety and shall not be deemed to be, or constitute, advice. Although endeavours have been made to provide accurate and timely information of the various source material, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. We cannot accept responsibility for any loss due to acts or omissions taken in respect of the information contained within the articles. Thresholds, percentage rates and tax may be amended due to future legislative changes.
Information as of the date of publication 05/12/2025
