December monthly investment update - Reflections on November 2025

In November, stock markets continued to reach new highs, Chancellor Rachel Reeves delivered her highly publicised UK Autumn budget, and the US government finally opened its doors again after the longest funding shut down in US history.

Equities reach new highs; gold prices soar!

It was a mixed bag of emotions for investors in November, as global markets navigated a delicate balance of softer economic data, shifting interest rate expectations and geopolitical uncertainty.

As far as global equities were concerned, some investors continued to remain twitchy about over-stretched US tech stock valuations. In early November, shares in those tech companies briefly tumbled (taking down broader stock markets with them). However, as the month progressed, they recovered and were once again hitting new record highs. But those lingering fears regarding a possible AI bubble on the horizon, just haven’t gone away. This is also something we remarked on in our update last month.

November typically saw companies announce their quarter three company results, and there were some winners. Those of our funds that have holdings in companies that reported robust earnings, have generally benefited. At the end of October, Mega-chip giant Nvidia - the world’s most valuable company – posted an impressive 62% increase in year-on-year revenue alongside a strong forecast – which will help to calm those investors’ AI related jitters, for now, at least.

However, investor sentiment might be more fragile than it appears. An indication could be the price of gold. Towards the end of November, it reached record-breaking highs - up 56% so far in 2025, as it reportedly heads for its best year since 1979.

Traditionally, a hike in gold prices can signal concerns about many things, such as global fiscal policies, and high amounts of public debt, as markets lose confidence in normal currencies. Signs of financial stress are something our Investment Analysts keep a close eye on.

Thanks to some of those market highs we mentioned earlier, we were hitting new highs of our own: Our flagship With Profits Fund pushed through the £5bn valuation in early November, though it did drop back as wider stock markets were impacted by that brief ‘tech’ wobble – which is all part of the normal ebb and flow of investing – nonetheless, a significant achievement.

UK bond markets unphased by budget

On 26 November, Chancellor Rachel Reeves prepared to deliver her highly anticipated Autumn Budget live from the Commons. However, the Office for Budget Responsibility (OBR) beat her to it by accidentally leaking the details it contained online only minutes before.

The chaos sparked brief volatility in UK bond markets with UK gilt yields (an indication of government borrowing costs) moving sharply down, then sharply higher, before quickly gravitating back to their pre-Budget leak position.

Government borrowing costs, globally, have been volatile in 2025 so far, as investors continue to feel uneasy about individual country’s government fiscal policies. It became clear though, as the UK Budget unfolded, that the Chancellor’s main measures were going to deliver more fiscal headroom – an estimated £22bn in five years’ time – a credible increase from the £9.9bn the Chancellor gave herself in her very first budget in November 2024.

The £22bn is important for investor confidence. Without it, fears could abound about the current Labour government having to raise further taxes and/or cut government spending – uncertainty that UK gilt markets dislike. It’s also one which could put investors off UK markets – lest we forget the Conservative government’s mini-budget fiasco of 2022, and the immediate repercussions it had for bond investors back then. For now, they seem largely untroubled by the Chancellor’s fiscal announcement on Budget Day 2025 – but only time will tell.

UK inflation softens

UK inflation, for the year to October, fell to 3.6% - the first fall since rising to a peak of 3.8% in July and staying there until September. Investment markets are already pricing in a rate cut in December. But what could persuade the Bank of England further, is weakening jobs market figures released by the Office for National Statistics (ONS) in November. It showed that UK unemployment rose to 5% in the three months to September.

The latest drop in inflation (which incidentally was slightly less than economists had anticipated), was driven, in part, by prices rising at their slowest rate in months, and smaller hikes in household energy costs (as reported by the ONS). The Autumn Budget also revealed some cost savings in that there will be further (modest) easing of energy bills going forward. All welcome news, no doubt, for UK households.

US Government shutdown ends

November also saw the longest-ever US federal government shutdown end after 43 days. During this time, 1.4m federal employees received no pay for weeks, and many flights were either delayed or cancelled and there could still be a cost to the US economy in the fourth quarter. President Trump signed the new 328-page funding bill into law on 14 November. Amongst the many things it contained, was the funding to keep most federal agencies operating until 30 January 2026.

We mentioned last month that the shutdown had delayed the release of the US jobs data - important as it is an indicator of how the world’s biggest economy is doing. The data also helps to guide the Federal Reserve when considering cutting interest rates. Some economists feel a December US rate cut is on the cards following the release of recent unemployment rates – which rose to 4.4% in September – the highest in four years.

Jerome Powell’s term as Fed Chair ends in May 2026, and investors are now waiting to see who succeeds him. With five names in the hat, it provides President Trump with the opportunity to appoint a more 'like-minded' individual on the subject of lower US interest rates – a constant criticism he has of Mr Powell.

It could, therefore, bring into question the role of the central bank whose job it is to remain independent of political influence. Latest reports state that the 'chosen one' will be revealed before Christmas, and Kevin Hassett (a White House Economic Adviser) is currently the front runner - according to recent market sources.

In the meantime, President Trump, officially can’t bid a 'final farewell' to Mr Powell just yet, as he is scheduled to remain in his role of Fed Governor until 2028.

Hopes for peace

As we head towards the end of 2025, there is no doubt that geopolitical tensions will continue to dominate headlines now and into the New Year. All eyes are now on the Trump-backed peace talks with Russia and Ukraine, the results of which could reshape the outlook of Eastern Europe as we know it.

One last reflection, though, must go to all those still suffering from hardship and degradation in war torn parts of the world, and where conflict continues to destroy innocent lives.

With that thought in mind, we would like to wish you all a very Happy Christmas, and we’ll be back in the New Year to share more insights and reflections.