Latest / Markets with Megan: A Quick Financial Markets Update / November’s Market Whiplash Explained | S2 E101 | 12-01-25

Transcript

November’s Market Whiplash Explained | S2 E101 | 12-01-25 · Markets with Megan: A Quick Financial Markets Update

• 0:00
  Megan Horneman: Another month and another impressive turnaround for the U.S.
• 0:04
  Megan Horneman: equity market.
• 0:05
  Megan Horneman: It's Monday, December the 1st, and this is Markets with Megan.
• 0:08
  Megan Horneman: If you like this podcast, please subscribe.
• 0:10
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• 0:12
  Megan Horneman: Also share with your friends, family, or colleagues, anybody that you think may be interested in the economic data that we see and what that means for the markets and especially investments.
• 0:22
  Megan Horneman: Today we want to give you a review, though, of the month of November because it was not a quiet month by far.
• 0:28
  Megan Horneman: We did end the official government shutdown that was the longest U.S.
• 0:33
  Megan Horneman: government shutdown on record, but it didn't stop the SP 500 here in the US from experiencing its first pullback, which is a decline of 5% or more.
• 0:43
  Megan Horneman: It saw its first pullback since really the liberation day decline that we saw.
• 0:47
  Megan Horneman: And when you look at the tech heavy NASDAQ as well as small cap equities, they actually saw nearly a 10% decline for the month.
• 0:55
  Megan Horneman: The VIX index, which measures volatility in the U.S.
• 0:59
  Megan Horneman: equity market, that rose to the highest level also since liberation, since April of this year.
• 1:06
  Megan Horneman: But as we finished out the month the last couple of weeks, that market kept going and we got the SP 500 to end the month in actually positive territory.
• 1:15
  Megan Horneman: So a really big turnaround for U.S.
• 1:17
  Megan Horneman: equities.
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  Megan Horneman: The reason behind that was that there was the expectation that with the economic data that was slowly starting to be released, it would give the Fed the flexibility to cut interest rates at their December meeting.
• 1:30
  Megan Horneman: Now let's go into what we saw from an economic standpoint as well as from a market standpoint.
• 1:35
  Megan Horneman: From an economic standpoint, the consumer continues to be on shaky ground.
• 1:40
  Megan Horneman: When you look at the super core retail sales, that dropped for the first time in five months.
• 1:46
  Megan Horneman: And that we call super core because it excludes all those volatile items like building materials, gas, food, energy.
• 1:54
  Megan Horneman: We also saw consumer confidence, which we think can be a leading indicator for future spending.
• 2:01
  Megan Horneman: That fell to the lowest level since 2013.
• 2:05
  Megan Horneman: When you look at the component that measures the expectations that consumers have about the future of the economy, inflation was mixed.
• 2:13
  Megan Horneman: The core producer prices were a bit better than expected.
• 2:17
  Megan Horneman: But when you look at services where we spend the majority of our money, you did see that that index saw in prices rise to a three-year high.
• 2:26
  Megan Horneman: Now, jumping into the markets, the US equity market was really the leader here, but it wasn't all technology.
• 2:33
  Megan Horneman: In fact, the NASDAQ and the Russell 1000 Growth Index actually declined for the month.
• 2:39
  Megan Horneman: It was broadened out.
• 2:40
  Megan Horneman: You saw value outperform growth at all three market cap levels.
• 2:45
  Megan Horneman: Also, when you look at the international markets, they actually lagged the US.
• 2:50
  Megan Horneman: You saw the MSCI All-Country World Index, excluding the US, dropped for the first time in four months.
• 2:57
  Megan Horneman: The SP outperformed its developed market counterparts, which is the MSCI EFA.
• 3:03
  Megan Horneman: That was for the third consecutive month.
• 3:05
  Megan Horneman: And that's primarily due to weakness in Japan.
• 3:08
  Megan Horneman: And then globally, we saw weakness in the emerging markets.
• 3:12
  Megan Horneman: Fixed income here in the US, we saw bonds rally for the fourth consecutive month.
• 3:17
  Megan Horneman: Again, one hopes the Fed's going to cut interest rates and bring rates lower.
• 3:21
  Megan Horneman: But it was led by, if you look at the drop in yields in the short term.
• 3:26
  Megan Horneman: So the two-year fell to the lowest level since 2022.
• 3:30
  Megan Horneman: Also, investors favored the quality of treasury bonds over things like high yield and emerging market bonds.
• 3:38
  Megan Horneman: From a commodity perspective, we did see the broad commodity index rally for the fourth consecutive month, but it was primarily due to precious metals.
• 3:47
  Megan Horneman: Now, gold, similar to some of the equity markets, saw a pretty big drop to start the month.
• 3:52
  Megan Horneman: We saw gold drop about 10% during the month, but it did rally back along with the risk assets to end the month with its fourth positive monthly gain.
• 4:01
  Megan Horneman: And then on the energy front, we saw that natural gas outweighed that negative decline in oil prices.
• 4:08
  Megan Horneman: And the Bloomberg Energy Index actually ended the month positive for the second consecutive month.
• 4:14
  Megan Horneman: That's all we have for what we saw in the month of November.
• 4:17
  Megan Horneman: We'll be back to give you some more details as we see as the month of December goes out and we round out this year.
• 4:22
  Megan Horneman: Thank you.
• 4:22
  Megan Horneman: And if you want a history of our podcast, you go to marketswithmegan.fm.