Global equity markets ended a seven-month winning streak in November, their longest winning streak since 2021. The MSCI All Country World Equity index posted a marginal loss of -0.1% for the month (in USD). Developed markets saw modest gains, while emerging markets declined, pushing the broad index slightly negative. Many global indices spent the month in negative territory before a final-week rally reversed some losses. The broad U.S. market was flat at the end in November, after experiencing some intra-month volatility and inter-sectoral rotation. Investor concerns about AI monetization, high stock valuations, and increasing corporate debt weighed on sentiment. Softer economic data, including labor market weakness, raised the possibility of a December interest rate cut, fueling a late-month rally. The Federal Reserve (Fed) softened its tone on future rate hikes, adding to optimism. Despite strong earnings, NVIDIA stock dropped over 12% in the month amid competition from Google’s new Gemini chip, contributing to tech sector volatility.European markets were among the strongest regions in the month, buoyed by favorable inflation data and wage growth, which offset weak consumer spending. The euro rallied as expectations grew that the European Central Bank (ECB) would hold rates steady. The UK continued to struggle with high deficits and unemployment, keeping tax rates elevated, though hopes for deficit reduction and potential rate cuts led to modest gains. Germany’s returns remained subdued as the government stimulus package delivered little progress in improving corporate productivity and economic growth. Developed markets in Asia fell as the Bank of Japan maintained a hawkish stance, focusing on on the inflationary aspects of a weak yen. South Korea’s market finally cooled in November, falling more than 4% (in own currency), but remaining up over 77% year-to-date!  Hong Kong’s market rallied, driven by new Chinese IPOs at a four-year high, but still closed the month with a small loss in USD terms. Emerging markets experienced their worst month in a year – China continued to struggle, as manufacturing activity remained in a contraction and the nonmanufacturing PMI fell into contraction for the first time since December 2022. November brought a mood shift among investors. Some of the year's top-performing sectors — including Information Technology or Utilities — were among the month's laggards, largely because of AI- and policy-related concerns. On the other hand, some more defensive sectors — including Healthcare and  Consumer staples— were among the leaders, as investors looked for opportunities outside IT. Global bond markets were generally flat. the The Bloomberg Global Aggregate Bond index fell negligibly over the month (in USD), as weaker US labour market and consumer confidence data provided some support to fixed income markets, while the perception of more bond issuance and higher future supply depressed performance.
        In November the U.S. equity market returns were flat, reflecting concerns about artificial intelligence (AI) return on investment, and changing expectations for monetary policy. The flaghip S&P500 equity index finished in positive territory for the month (0.13% in USD), closing a seventh consecutive positive month – a rare bulish signal, and one of the longest streaks of “risk-on” months. The ride wasn’t smooth though. Volatility, measured by the VIX, spiked to its highest since April’s tariff-driven selloff, before easing in the final week of November. Two main factors drove this. Firstly, AI has fueled tech sector growth, but November brought doubts about whether rapid expansion (through colossal CapEx) and high valuations are sustainable. This skepticism weighed on tech equities, especially U.S. large-cap stocks related to AI. Although Nvidia beat both on revenue and net income in 3Q, its stock dropped over 12% after Google announced its new Gemini chip, increasing competition and volatility. So, even with strong tech earnings, market reactions were muted, showing worries about high expectations and future growth. Secondly, monetary policy added to the uncertainty. Even though the government shutdown ended in November, delayed economic data, a softer labor market, and ongoing inflation left the Fed’s next move unclear. This uncertainty about future rates made investors cautious and their mood changed. While growth-style investments, especially U.S. large-cap growth stocks, had outperformed over the past year, value investments led in November. Defensive sectors like Healthcare, Consumer staples, and Materials outperformed, while Information technology, Utilities, and Industrials lagged. This notable sector rotation was emphasized by the small- and mid-cap stocks (often more value-oriented), which performed better than the large ones. The American economy continued to demonstrate resilience. The 3Q earnings season confirmed strong corporate fundamentals. In the S&P500, 81% of companies beat earnings expectations, with year-over-year growth at 13%. Technology companies were leaders, with EPS growth rising above 22% from an year earlier. Despite these results, the market response was subdued, suggesting high expectations may already be priced in. As Thanksgiving was approaching, weak labor data increased the chance of a December rate cut, fueling a late-November rally. The tech-heavy NASDAQ 100 equity index fell by 8% between late October and November 20th, but rose almost 6% by the month end. The Fed’s less hawkish tone also boosted optimism for equities. Fixed income markets, though, faced uncertainty due to limited U.S. macroeconomic data and unclear Fed policy direction. The pass-through of tariffs to the US consumer continues to be a big unknown for economists. Companies have been restrained so far at the expense of their profit margins, but that could change in 2026, igniting inflation. By late November, expectations shifted toward a potential Fed rate cut by 0.25% at the December meeting. Labor market data was mixed, with rising unemployment and jobless claims but stronger-than-expected non-farm payrolls. However, weak consumer confidence in November cast doubt on the strength of U.S. growth, and Treasury yields fell (bond yields and bond prices move in opposite directions). On aggregate, government and corporate, U.S. bonds gained 0.6% for the month .
         Shares in Europe had a moderately good month overall in November. The pan-European equity index Stoxx600 added almost 0.8% to its value for the month (in EUR), supported by a robust 12% earnings growth expectation for 2026 and less concentration in technology stocks. However, it was IT and Financial stocks that demonstrated strong earnings, while the consumer sector — especially autos — underperformed. In France, the political turmoil continued as the National Assembly rejected parts of Prime Minister Sébastien Lecornu’s budget draft, following a pattern (his two predecessors also failed to pass their budgets). On trade, the Trump administration reached a framework agreement with Switzerland to cut tariffs on Swiss imports from 39% to 15%. Swiss companies committed to invest $200 billion in the US, including $50 billion from Roche and $23 billion from Novartis. The agreement aims to reduce America’s trade deficit in pharmaceuticals and other sectors. German stocks declined in November – the DAX equity index lost 0.5%, but is still up 20% for the year (in EUR). Retail sales and business conditions in Germany remained sluggish, with investors watching for the effects of new government stimulus measures. The equity market in UK rebounded and finished flat (FTSE100 was up just 0.03% in GBP), as investors anticipated another interest rate cut from the Bank of England (BoE). However, the British pound remained under pressure due to ongoing concerns about government budget deficits. Britain's Chancellor Rachel Reeves presented a budget that would increase annual spending by £11 billion and taxes by £26 billion by 2029-30. Extra spending begins immediately, while tax increases are gradual, leading to higher borrowing in the next four years. Despite no major welfare cuts, markets did not react badly: borrowing costs fell. Inflation in the UK (the highest among the countries in G7) fell to 3.6% in October from 3.8%, with services inflation dropping to 4.5%. Although inflation is still high above the BoE's 2% target, markets expect a rate cut in December. On fixed income markets, German government bonds (Bunds) performed worse than expected due to higher than anticipated federal borrowing, while inflation-linked bonds saw only a modest 0.2% increase, pressured by inflation. German Consumer Price Index (CPI) came out +0.3% for October, while analysts had expected -0.2% for a monthly move. In the Eurozone as a whole inflation remained modest, as October CPI showed just 2.1% rise compared to a year earlier (slightly below analysts’ expectations of 2.2%). In the UK, despite the favorable inflation movement, uncertainty over the budget kept government bonds (Gilts) performance restrained, with returns nearly flat at 0.1%. The budget announcement itself was uneventful, although the lower projected Gilt supply gave some reassurance to fixed income investors.
         November was a good month for the shareholders on the Bulgarian Stock Exchange (BSE). The flagship SOFIX equity index posted a descent rise of more than 1.4% for the month and is now up almost 22% since the beginning of the year (in BGN/EUR). Among the significant events on the local bourse was the launch of trading in the largest issue of MREL bonds (EUR 60 million) issued by TBI Bank. The issue consists of 3-year bonds (with an option to redeem one year earlier) with an annual coupon of 7%. In November, an extraordinary general meeting of shareholders of BSE was held at which, in addition to electing members of the Board of Directors for a new five-year term, an interim dividend of BGN 1.26 per share (EUR 0.64) was approved. Thus, among the big movers on the domestic exchange, the biggest gainer for the month were the shares of the Bulgarian Stock Exchange AD itself, which rose by more than 10%, while the worst performer were the shares of the technology company Wise Technology AD, which fell by 11%.
Source: Bloomberg, BSE