The U.S. Federal Reserve cut interest rates by 25 basis points on Wednesday, as widely expected, marking the third-rate reduction this year. The decision was passed by a 9–3 vote, again highlighting a growing divide within the committee. Hawkish members remain concerned about inflation and favour higher rates, while dovish members are more focused on supporting the labour market through lower borrowing costs.

The Fed’s updated “dot plot” points to a cautious path ahead, with policymakers collectively pencilling in just one additional rate cut in 2026 and another in 2027, underscoring significant disagreement about the future direction of policy. In a further move to support market liquidity, the Fed announced it will resume purchases of U.S. Treasury securities, starting with $40 billion in Treasury bills from Friday.

On the economic outlook, the committee raised its forecast for U.S. GDP growth in 2026 to 2.3%, a half-percentage-point increase from its September projection. Inflation, however, is still expected to remain above the Fed’s 2% target until 2028. The Fed’s preferred inflation gauge showed prices rising at an annual rate of 2.8% in September—well below recent peaks, but still uncomfortably high for policymakers.

U.S. equities pulled back on Friday as investors continued to rotate out of technology stocks into more value-oriented sectors. Concerns over elevated valuations and whether heavy spending on artificial intelligence infrastructure will deliver sufficient returns weighed on the tech-heavy Nasdaq Composite. For the week, the S&P 500 declined 0.6% and the Nasdaq fell 1.6%, while the Dow Jones Industrial Average bucked the trend, gaining 1.1%.

Divisions within the Fed have increasingly played out in public, presenting a challenge for Chair Jerome Powell as uncertainty around the U.S. economic outlook persists, particularly in light of President Donald Trump’s aggressive trade policies. President Trump has repeatedly pressured the Fed to cut rates and has signalled that former Fed governor Kevin Warsh is now a leading candidate to succeed Powell when his term expires in May, according to reports.

European markets were modestly weaker. The STOXX Europe 50 Index ended slightly lower, while the UK’s FTSE 100 slipped 0.19%. The European Central Bank is widely expected to keep interest rates unchanged at its December 18 meeting, marking a fourth consecutive hold since its June rate cut. ECB officials struck a relatively confident tone during the week, with President Christine Lagarde noting that the European economy appears resilient to trade tensions and could see upgraded growth projections later this month.

In the UK, economic data disappointed as GDP unexpectedly contracted by 0.1% in October, following a similar decline in September. Construction was the weakest sector, while services output also fell.

Asian markets were mixed. Japan’s equities advanced, with the Nikkei Index rising 0.68% for the week. Ahead of the Bank of Japan’s December policy meeting, economists expect a 25-basis-point rate hike to 0.75%, which would mark another step away from ultra-loose policy. In contrast, Chinese markets retreated as investors took profits. The Shanghai Composite fell 0.34% and Hong Kong’s Hang Seng Index slipped 0.41%. Inflation data continued to highlight deflationary pressures in China, with consumer prices rising just 0.7% year on year in November.

Brent crude oil prices stabilised around $61 per barrel but were still on track for a weekly decline of more than 4%, driven by expectations of a global supply surplus. Gold prices climbed above $4,300 per ounce, testing record highs last seen in October, and posted a weekly gain of 2.4% on expectations of further U.S. monetary easing.

The week ahead is packed with key data releases. In the U.S., markets will focus on the delayed jobs reports for October and November, November CPI inflation, and retail sales figures. In Europe, monetary policy will be in the spotlight as both the ECB and the Bank of England hold policy meetings. In Asia, investors will watch a range of Chinese economic indicators, while in Japan attention will centre on the Bank of Japan meeting, where a rate hike to 0.75% is widely anticipated.

Market Moves of the Week:

South Africa’s Communications Minister, Solly Malatsi, has directed the country’s telecoms regulator to amend regulations to allow international players, including Elon Musk’s Starlink, to enter the local market under an alternative empowerment framework. Currently, the Electronic Communications Act requires foreign-owned communications licensees to sell 30% of equity in their South African subsidiaries to historically disadvantaged groups—a requirement that has drawn criticism from Starlink and other global operators.

Under a new policy direction published in the Government Gazette on Friday, so-called “equity equivalent” investment programmes will be recognised as contributing toward empowerment objectives. This change would enable communications companies to bypass the 30% equity requirement, instead meeting empowerment goals through investments such as digital infrastructure and related initiatives, potentially easing market entry for global technology providers.

Investor attention is turning to November consumer inflation data, scheduled for release on 17 December. The data will be closely watched following South Africa’s decision last month to lower its inflation target to 3%, from the previous 3%–6% range. A fourth-quarter survey of business leaders, trade union officials and analysts released on Friday showed a sharp decline in inflation expectations for 2026, suggesting growing confidence in the credibility of the new lower inflation target.

On the Johannesburg Stock Exchange, the JSE All Share Index finished the week 0.73% higher, supported by strong performances from resource companies.

The South African rand was largely steady on Friday, underpinned by firmer gold prices. Currency markets remained cautious ahead of next week’s inflation release, which is expected to provide further insight into the underlying health of Africa’s most industrialised economy.

Chart of the Week:

As always, we appreciate your support and value your trust in LNKD Investment Managers. 

U.S. markets ended the holiday-shortened week higher, supported by dovish signals from Federal Reserve officials and a run of softer economic data that strengthened expectations of a December rate cut. Small caps outperformed, the Nasdaq bounced back on renewed AI optimism, and overall sentiment remained constructive despite typically thin Thanksgiving trading volumes.

U.S. economic releases pointed to cooling momentum. Retail sales slowed sharply, core control-group sales contracted, and producer price inflation remained contained. Durable goods orders offered a pleasant upside surprise, though business surveys such as the Chicago PMI and Richmond Fed continued to signal softer underlying activity. Labour market indicators were mixed: initial jobless claims fell to a seven-month low, suggesting employers remain reluctant to cut staff, while continuing claims nudged higher. Meanwhile, consumer sentiment deteriorated meaningfully as surveys highlighted mounting concerns over inflation, job security and household finances heading into the holiday season.

The Fed’s Beige Book reinforced the narrative of a gradually slowing economy, noting slightly weaker employment, moderate price pressures and softer consumer spending. Markets became increasingly sensitive to policy signals after comments from senior Fed officials and reports that Kevin Hassett may replace Jerome Powell, both of which reinforced expectations that the next move will likely be a rate cut. Bond yields drifted lower, the dollar softened, and tech stocks rallied on further AI-related developments.

Across Europe, data continued to point to mild stabilisation. Germany’s GDP flatlined after a prior contraction and consumer confidence improved slightly, while France recorded a small dip in sentiment. Eurozone-wide confidence held steady, and inflation remained subdued across major economies, keeping the headline CPI reading close to the ECB’s 2% target. In the UK, the Autumn Budget introduced GBP 26 billion in new taxes, prompting the OBR to lower growth forecasts and highlight a rising long-term tax burden.

Tensions in East Asia escalated as China criticised Japan’s position on Taiwan and imposed travel and import restrictions, heightening geopolitical risks in the region. Despite this backdrop, Japan’s economic readings were mixed: inflation held steady, unemployment remained unchanged and industrial production softened. Japanese equities nevertheless advanced on dovish U.S. signals, while speculation around a possible BoJ rate hike pushed the 10-year JGB yield toward 17-year highs.

In China, equity markets rose as renewed enthusiasm for domestic tech and AI overshadowed concerns about slowing economic momentum. Industrial profits unexpectedly declined and producer prices remained in deflation, signalling still-weak underlying demand. Even so, most analysts continue to expect China to meet its 5% growth target, supported by ongoing policy measures and relatively steady consumer sectors.

Broader geopolitical developments added fresh dynamics to global markets. Growing optimism around potential peace in Ukraine and the prospect of a new U.S.–China trade agreement triggered debate about asset-allocation shifts for 2026. Defence stocks pulled back, while reconstruction-linked materials gained strongly. Oil prices edged lower ahead of the OPEC+ meeting as markets weighed diplomatic developments against supply expectations, with Brent drifting toward $62 a barrel amid signs of a growing global surplus.

Global markets closed the week firmly higher, buoyed by improving risk appetite and ongoing optimism around U.S. monetary easing. All three major U.S. indices posted strong gains, led by a 4.91% rise in the Nasdaq. European equities also pushed higher, while in Asia, Japan’s Nikkei 225 climbed 3.35%, Hong Kong’s Hang Seng rose 2.82% and the Shanghai Composite added 1.40%. Bond yields were mostly softer, with U.S., UK and German yields edging lower as rate-cut expectations strengthened, while Japan’s 10-year yield moved higher to 1.81% on growing expectations of BoJ tightening.

Market Moves of the Week:

South Africa is considering a 20% tax on online gambling to slow the industry’s rapid expansion and limit related social harms. Treasury expects the measure could raise about R10 billion, but stresses that the main objective is to curb problem gambling, which has surged alongside smartphone adoption and economic strain. Participation has risen sharply, and total wagers reached R1.5 trillion in 2024/25, almost one-third higher than the previous year. The proposal follows global trends – such as the UK’s 21% remote gaming tax – and may include stricter reporting and registration requirements for online operators.

Nersa has taken three major steps toward launching South Africa’s competitive wholesale electricity market in April 2026: approving a market-operator licence for Eskom’s NTCSA, finalising grid access rules, and establishing the Electricity Market Advisory Forum. However, it is withholding final licence conditions until NTCSA outlines how it will prevent conflicts of interest with Eskom, which will compete alongside other generators. Industry bodies have welcomed the reforms as long-overdue measures that improve transparency, strengthen oversight, and support a more competitive investment environment.

Other economic developments included a 1.2% MoM decline in South Africa’s leading business cycle indicator for September and mixed producer inflation data, with PPI down 0.1% MoM but up 2.9% YoY in October. Globally, China’s launch of physically settled platinum futures boosted platinum prices and offered a structural positive for South African PGM producers. Meanwhile, U.S. President Donald Trump escalated political tensions by declaring South Africa would not be invited to the 2026 G20 Summit, questioning its membership and threatening to halt U.S. support.

South African markets delivered a mixed performance over the week, with the JSE All Share Index rising 1.20% as a sharp rebound in resources (+8.78%) offset weakness in industrials (-3.45%) and financials (-0.54%). Resource counters continued to surge on stronger commodity prices, while listed property added 1.72%, extending its solid year-to-date gains. The rand strengthened meaningfully, appreciating 1.53% to R17.10/$ alongside broader U.S. dollar softness, and the South African 10-year government bond yield declined 17 basis points to 8.50%, supported by improved global risk sentiment and expectations of further monetary easing abroad.

Chart of the Week:

As always, we appreciate your support and value your trust in LNKD Investment Managers. 

After a six-week delay due to the government shutdown, the September employment report offered a mixed reading. Payroll growth came in higher than expected at 119,000, marking an improvement from the subdued hiring seen over the summer. However, the unemployment rate edged up to 4.4%, the highest level in four years. The Bureau of Labor Statistics confirmed that the October report has been cancelled, with the next release, covering November, scheduled for 16 December.

In one of the most closely watched earnings releases of the quarter, NVIDIA reported record revenue that exceeded expectations, supported by strong demand for its AI chips. The company also issued a stronger-than-anticipated Q4 outlook. Markets opened higher on Thursday, but momentum faded later in the session, and NVIDIA ended the week 3.90% lower, as renewed uncertainty around the broader AI theme weighed on major equity indices.

The minutes from the early-November FOMC meeting revealed deeper divisions among policymakers than initially suggested, even after the committee delivered a rate cut earlier in the month. Several members argued that a December cut would be inappropriate and could risk adding to inflation pressures, while most still anticipate a continued easing cycle over time. The Fed also noted that the labour market is expected to soften gradually, with no signs of a sharp deterioration. Political pressure resurfaced as President Trump criticised Chair Jerome Powell as “grossly incompetent” and hinted he has identified a potential replacement ahead of Powell’s term expiry in May.

Early eurozone PMI readings for November indicated that activity continued to expand at a steady pace. The HCOB composite PMI eased slightly to 52.4 from 52.5, remaining above expectations and still in expansionary territory. Services firmed to an 18-month high of 53.1, while manufacturing slipped back below 50 to 49.7.

In the UK, annual CPI inflation slowed to 3.6% in October from 3.8%, supported by softer airfare, gas and utility prices. While marginally above consensus, the print reinforced expectations for a December rate cut. Core inflation eased to 3.4% from 3.5%, indicating further moderation in underlying pressures.

Japan approved a JPY 21.3 trillion (USD 135 billion) stimulus package, marking progress toward the expansionary fiscal stance anticipated under new Prime Minister Sanae Takaichi. The measures include spending, targeted tax breaks and investment across areas such as shipbuilding and AI, aimed at supporting growth and easing pressure on households affected by elevated inflation.

In China, no major economic indicators were released during the week. However, policy developments were in focus as authorities reportedly consider additional measures to support the property market amid concerns that ongoing weakness could pose broader financial-stability risks.

Despite some supportive earnings releases and economic data, U.S. equities ended the week lower. The Nasdaq Composite fell 2.74%, while the S&P 500 (-1.95%) and Dow Jones (-1.91%) also posted declines.
 
In Europe, the STOXX Europe 50 slipped 3.14% in local-currency terms as renewed caution around AI-related valuations and reduced expectations for a near-term U.S. rate cut weighed on sentiment. The FTSE 100 declined 1.64%.
 
Asian markets were similarly softer. Japan’s Nikkei 225 eased 3.48%, reflecting weakness in AI-linked technology names on valuation concerns. Mainland China’s Shanghai Composite fell 3.90%, while Hong Kong’s Hang Seng Index dropped 5.27%, mirroring the broader risk-off tone.

Market Moves of the Week:

South Africa’s latest CPI print showed inflation holding steady, with headline and core measures remaining broadly aligned with the SARB’s target range. According to Stats SA, headline CPI was 3.6% in October, slightly higher than in September but still in line with gradually easing price pressures.

Following the release, the SARB unanimously reduced the repo rate from 7.00% to 6.75% on Thursday, its first adjustment under the updated inflation-targeting framework. The MPC highlighted the improvement in the inflation backdrop but maintained a data-dependent approach.

During the week, the G20 meetings commenced, with discussions focusing on global growth, inflation dynamics and the broader policy outlook. The U.S. did not participate in this round of meetings, and discussions proceeded with the remaining members focusing on coordination efforts and broader global financial developments.
 
The JSE All-Share Index mirrored global peers, declining 2.08% over the week. Most sectors ended lower, with resources (-2.94%), industrials (-2.47%) and financials (-1.10%) all recording weekly losses. Property was the only positive performer, gaining 1.16%. Meanwhile, the rand depreciated 1.71% against the U.S. dollar, closing at R17.37 on Friday.

Chart of the Week:

As always, we appreciate your support and value your trust in LNKD Investment Managers. 

President Donald Trump on Wednesday signed legislation to end the longest government shutdown in U.S. history. The move followed a 222–209 vote in the House to restore food assistance programs, resume pay for roughly 800,000 federal workers, and revive air-traffic control operations. While Republicans largely held together with Trump’s backing, House Democrats voiced frustration that the standoff ended without securing an extension of federal health insurance subsidies.

The temporary funding deal runs through January 30, continuing the government’s projected trajectory of adding about $1.8 trillion annually to its existing $38 trillion national debt. The reopening also restores the release of crucial federal economic data—vital for investors, policymakers, and households assessing job growth, inflation, and consumer spending trends.

U.S. equities were mostly lower through Thursday as elevated valuations and intensifying scrutiny of artificial intelligence spending spurred a rotation out of growth-oriented stocks—many of which had driven indexes to recent record highs. A volatile session on Friday saw a rebound, with investors snapping up major technology names following the market’s worst single-day decline in more than a month. Despite the turbulence, the Nasdaq ended the week down 0.5%, while the S&P 500 and the Dow managed modest gains of 0.1% and 0.3%, respectively.

Switzerland and the United States have concluded a significant trade agreement that will materially reduce bilateral tariffs and expand cross-border investment flows. As part of the deal, the U.S. will lower tariffs on Swiss imports from 39% to 15%, providing Swiss exporters with meaningful cost relief and improving market access. In return, Switzerland has committed to invest $200 billion into the U.S. economy, reinforcing its position as a key strategic partner. Additionally, Switzerland will eliminate tariffs on a designated quota of U.S. meat exports—including beef, bison, and poultry—broadening opportunities for American producers within the Swiss market.

In Europe, the pan-European STOXX 50 Index advanced 2.29% following relief over the reopening of the U.S. federal government, while the UK’s FTSE 100 was largely unchanged. A string of weaker-than-expected UK labour and economic data weighed on sentiment, prompting a sharp increase in expectations for a Bank of England rate cut in December. Unemployment rose to 5% for the three months through September—its highest level since early 2021—while Q3 GDP growth slowed to 0.1%, missing the 0.2% consensus.

Japan’s equity markets posted minimal gains for the week, with the Nikkei 225 rising 0.20%. Investor expectations surrounding potential policy shifts under newly appointed Prime Minister Sanae Takaichi—including continued fiscal support and a cautious approach by the Bank of Japan toward tightening—put downward pressure on the yen.

Mainland Chinese markets retreated as investors took profits after recent gains pushed benchmarks to near four-year highs. The Shanghai Composite slipped 0.18%, while Hong Kong’s Hang Seng Index added 1.26%. Chinese housing market data continued to signal strain, with new home prices across 70 cities falling 0.45% in October—the sharpest monthly drop in a year.
 
Oil prices were steady on Thursday after a 4% decline the previous session, as markets weighed global oversupply concerns against new U.S. sanctions on Russia’s Lukoil. Prices rebounded on Friday, rising more than $1 after a Ukrainian drone strike halted exports from Russia’s key Black Sea port of Novorossiysk. Brent crude ended the week at $64.18 per barrel, gaining 0.9%.

Gold prices eased toward the end of the week following hawkish commentary from Federal Reserve officials; however, the metal still finished the week more than 2% higher at $4,082 per ounce, compared with last week’s close.

Market Moves of the Week:

Finance Minister Enoch Godongwana delivered an optimistic tone in his Medium-Term Budget Policy Statement (MTBPS) on Wednesday, highlighting stronger-than-expected revenue and signs of a gradually recovering economy. Tax revenue for the year is projected to come in R19.7 billion higher than expected, reflecting improved household spending and corporate tax collections. He noted progress in stabilising public debt, fostering economic growth, and removing South Africa from the Financial Action Task Force grey list, achievements he attributed to collaboration across government, law enforcement, and the private sector.
 
Markets reacted positively to the MTBPS, with the rand hitting its best levels in 2025 and government bond yields dipping. A key factor driving sentiment was the reduction of the inflation target to 3%, with a 1-percentage-point tolerance band, effectively narrowing the range from 3–6% to 2–4%.

Tax collections for the first half of the 2025 budget period have risen 9.3% above estimates, reaching R924.7 billion, prompting the Treasury to revise gross tax revenue upward by R19.7 billion. Despite this progress, South Africa’s slow-growth trajectory remains a concern, with GDP growth projected at 1.2% in 2025 and averaging 1.8% from 2026 to 2028. The budget deficit is forecast to narrow slightly to 4.7% of GDP in 2025/26, with government debt stabilising at 77.9% of GDP.

The government and labour unions agreed to a three-year wage deal in February 2025, with a 5.5% increase in the first year and CPI-linked adjustments thereafter. The revision of the inflation target may necessitate adjustments to this agreement.

In a further boost to investor confidence, South Africa secured its first credit rating upgrade in nearly two decades on Friday, with S&P Global raising the country’s foreign-currency long-term sovereign rating to “BB” from “BB-.” The upgrade reflected stronger growth prospects, an improving fiscal outlook, and reduced contingent liabilities following better performance at Eskom. S&P expects GDP growth to rise to 1.1% in 2025 and average 1.5% through 2026–2028.

The positive sentiment was reflected on the Johannesburg Stock Exchange, where the All Share Index rose 2.87% for the week, supported by gains in resource and financial stocks. The rand strengthened to R17.07/$ at Friday’s close, marking its strongest level against the dollar in nearly three years.

Chart of the Week:

As always, we appreciate your support and value your trust in LNKD Investment Managers.

U.S. equities lost ground this week as investors reassessed elevated valuations in the AI sector and booked profits amid a lack of fresh government data due to the ongoing federal shutdown, now stretching beyond a month.

Private sector reports provided mixed signals on the labour market. ADP data showed a modest rebound with 42,000 jobs added in October, while Challenger, Gray & Christmas reported over 150,000 job cuts—the largest October reduction in more than two decades.

Consumer confidence also deteriorated. The University of Michigan’s Consumer Sentiment Index fell sharply to 50.3, its lowest since mid-2022, with the prolonged shutdown cited as a key concern. Meanwhile, the ISM Services PMI climbed back into expansion at 52.4, while ISM Manufacturing fell further to 48.7, marking eight straight months of contraction. All three major US indices ended the week in the red. The Nasdaq dropped around 3%, while the S&P 500 and Dow Jones each fell more than 1%, as concerns over high tech valuations and market concentration persisted.

The Bank of England kept its policy rate steady at 4.0% in a narrow 5-4 vote, hinting that market expectations for gradual rate cuts toward 3.5% over the next three years remain reasonable. UK equities held up relatively well, with the FTSE 100 easing 0.35% amid broader European weakness. Across the continent, both Sweden’s Riksbank and Norway’s Norges Bank left rates unchanged at 1.75% and 4.0%, respectively. The Euro STOXX 50 slid 1.69% as investors questioned stretched AI-linked stock valuations and digested a third consecutive monthly decline in retail sales.

After hitting record highs in late October, Japanese equities pulled back, with the Nikkei 225 losing 4.07% for the week amid renewed safe-haven demand and concerns over expensive AI shares.

In contrast, Chinese markets advanced following a one-year truce in the US-China trade dispute after the two presidents met at the APEC Summit in South Korea. The Shanghai Composite rose 1.08%, while Hong Kong’s Hang Seng Index gained 1.06%.

Gold prices climbed above $4,000/oz by Friday’s close, supported by a weaker US dollar and heightened demand for safety amid the ongoing US government shutdown and continued trade uncertainty. In the week ahead, markets will continue to monitor the historic US government shutdown, which has disrupted key data releases. In Europe, attention turns to UK GDP and labour market figures, while in Asia, focus will be on China’s industrial production, retail sales, property prices, and credit data for signs of economic momentum.

Market Moves of the Week:

Locally, markets will turn their focus this week to the National Treasury’s 2025 Medium-Term Budget Policy Statement (MTBPS), set to be delivered by Finance Minister Enoch Godongwana on 12 November 2025. Economists are hopeful that the delayed budget will outline progress on key structural reforms aimed at boosting growth and stabilizing public finances.

Analysts expect a slightly improved fiscal outlook, supported by better-than-expected revenue collection and ongoing efforts to rein in expenditure. South Africa has also benefited from several supportive tailwinds, including stronger gold prices—buoyed by global concerns over the US dollar’s reserve status—and increased export earnings. In addition, the country’s recent removal from the FATF grey list has lifted investor sentiment and could help attract renewed foreign capital inflows.

The rand recovered from midweek weakness, trading near R17.34/USD on Thursday and holding around R17.29 into Friday’s close, supported by steadier global risk appetite and firmer precious metal prices.

Local government bonds mirrored the improvement, with the benchmark R2035 yield easing to around 8.87%, reflecting a modest bid for duration ahead of the budget announcement. South African equities softened in line with global markets, as a tech-led pullback weighed on sentiment. The JSE All Share Index declined 0.36% for the week, with all three major sectors—financials, industrials, and resources—ending lower.

Chart of the Week:

As always, we appreciate your support and value your trust in LNKD Investment Managers. 

Global markets ended October near record highs, shrugging off earlier volatility as investors drew confidence from strong corporate earnings, progress in U.S.–China trade discussions, and growing expectations that interest rates have peaked. Technology shares continued to lead performance, while concerns around the U.S. government shutdown and political wrangling in Washington had limited market impact.

The U.S. Federal Reserve delivered a widely expected 25 basis-point rate cut, lowering the benchmark rate to 3.75%–4.00%. Chair Jerome Powell emphasised that another cut in December is “not a foregone conclusion,” noting divisions among policymakers and data disruptions caused by the ongoing shutdown. The Fed’s message reflected a more balanced stance – acknowledging easing inflation and softer labour conditions but avoiding premature stimulus. Meanwhile, a one-year trade truce between Presidents Trump and Xi helped ease tensions, with the U.S. scaling back select tariffs and China pledging to resume agricultural imports. Despite temporary growth drags from the shutdown, private-sector data continues to show steady consumer spending and resilient employment trends.

Corporate earnings also provided reassurance, with over 80% of S&P 500 companies beating expectations, underscoring the strength of underlying business fundamentals. While results from mega-cap technology firms were mixed, enthusiasm around artificial intelligence and improving productivity trends continued to drive market gains. The Nasdaq and S&P 500 both reached new highs, reflecting confidence that profit growth remains robust heading into year-end.

In Europe, the European Central Bank held interest rates steady at 2.15% as inflation hovered near its 2% target. President Christine Lagarde reiterated that decisions will remain data-dependent, pointing to signs of stabilisation in the eurozone economy. GDP expanded by 0.2% in the third quarter – slightly above expectations – driven by France and Spain, while the unemployment rate held firm at 6.3%. In the UK, house prices and mortgage approvals improved modestly, hinting at a stabilising housing market. In Germany, sentiment and business confidence picked up, suggesting the industrial slowdown may be bottoming out.

Across Asia, Japanese equities rallied to a record high, with the Nikkei 225 gaining 16.6% – its best monthly gain since 1994 – on steady policy support and optimism around global technology earnings. The yen weakened slightly after the Bank of Japan left rates unchanged and signalled patience on future hikes. In China, markets were more subdued as optimism over trade progress was offset by a lack of new policy stimulus. The manufacturing PMI slipped to 49.0, pointing to mild contraction, while authorities reaffirmed their goal of shifting growth toward domestic demand.

Global markets ended the week largely higher, supported by strong corporate earnings and renewed optimism around U.S. rate cuts. In the U.S., the Dow Jones gained 0.75%, the S&P 500 rose 0.71%, and the Nasdaq advanced 2.24% as technology shares outperformed. In Europe, performance was more muted, with the Euro Stoxx 50 slipping 0.22% and the FTSE 100 adding 0.74%. In Asia, Japan’s Nikkei 225 surged 6.31%, leading global gains, while Hong Kong’s Hang Seng fell 0.80% and the Shanghai Composite edged up 0.11%.Bond yields were mixed – U.S. 10-year yields rose slightly to 4.08%, while UK and German yields were marginally softer. Gold pulled back 2.65% after recent highs, Brent crude fell 0.65%, and Bitcoin retreated 1.26%, though it remains up 17.8% year-to-date.

Market Moves of the Week:

South African Reserve Bank Governor Lesetja Kganyago reaffirmed his commitment to lowering the inflation target to 3%, arguing that persistent pressures from administered prices and multi-year wage agreements should not delay the transition. He stressed that while electricity and water tariffs remain elevated, policy credibility depends on setting long-term goals aligned with international peers rather than waiting for temporary distortions to subside.

The central bank has long maintained that the current 3-6% inflation band is uncompetitive, and although Finance Minister Enoch Godongwana has not yet formally endorsed the change, the SARB has been guiding expectations toward the lower end of the range. Critics suggest the central bank is moving ahead of Treasury, but Kganyago highlighted falling government bond yields – down 80–160 basis points since April – as evidence of continued investor confidence.

He also emphasised alignment between fiscal and monetary authorities, noting close coordination with Treasury ahead of the Medium-Term Budget Policy Statement on 12 November, where a formal adoption of the new target could be confirmed. Meanwhile, National Treasury reported a R15.36 billion budget deficit for September, suggesting the current account shortfall widened modestly from 1.1% of GDP in Q2 to 1.6% in Q3, while producer inflation eased to 2.3% year-on-year, indicating softer upstream price pressures. Locally, the JSE All Share Index fell 1.09%, dragged lower by resources (-1.64%), industrials (-0.67%), and financials (-1.61%), while listed property advanced 1.30% to cap a resilient performance for the sector. The rand weakened slightly by 0.38% to R17.31/$, while the 10-year government bond yield eased marginally to 8.87%.

Chart of the Week:

As always, we appreciate your support and value your trust in LNKD Investment Managers. 

The Dow Jones Industrial Average advanced on Friday as investors reacted to a softer tone from U.S. officials regarding trade negotiations with China and looked past renewed concerns in the regional banking sector. Despite midweek volatility, all three major U.S. indices closed the week higher — the S&P 500 rose 1.7%, the Dow gained 1.6%, and the Nasdaq advanced 2.1%.

Early optimism followed signs of easing trade tensions between Washington and Beijing, supported by dovish commentary from several Federal Reserve officials and continued deal activity within the artificial intelligence (AI) sector. Treasury Secretary Scott Bessent confirmed plans to speak with his Chinese counterpart, while President Trump noted that a meeting with President Xi Jinping remained likely later this month — comments that helped ease fears of new tariffs due on November 1.

However, Thursday saw renewed volatility as the Dow fell 300 points and the S&P 500 declined 0.6%, dragged lower by regional banks. The SPDR S&P Regional Banking ETF (KRE) dropped over 6%, marking its fourth consecutive weekly loss. Investor anxiety grew following the bankruptcies of auto-industry-linked lenders Tricolor and First Brands, coupled with allegations of loan-related fraud at two regional banks. The turmoil briefly drove the Cboe Volatility Index (VIX) to its highest level since April before easing on Friday.

Fed Chair Jerome Powell reiterated that downside risks to employment have increased, reinforcing expectations of another rate cut this year. Additional dovish remarks from policymakers Christopher Waller and Stephen Miran strengthened the view that the Fed remains committed to supporting growth despite inflation remaining above target.

U.S. Treasury yields declined across the curve, with the 10-year yield falling to its lowest level since October 2024. Safe-haven demand was further supported by ongoing concerns over the federal government shutdown, now entering its third week, with little progress in negotiations between parties.

In Europe, the STOXX Europe 50 Index gained 1.38%, buoyed by Powell’s dovish tone and easing U.S.–China trade tensions. The UK’s FTSE 100 declined 0.77%, despite data showing that GDP grew 0.1% in August, following a 0.1% contraction in July. The unemployment rate edged up slightly to 4.8%, indicating a modest loosening in labour market conditions.

In Asia, Japan’s Nikkei 225 fell 1.05% as yen strength weighed on exporters and investor sentiment remained cautious amid global trade uncertainty, while in China, deflationary pressures persisted. Producer prices fell 2.3% year-on-year in September, while consumer prices declined 0.3%, deeper than expected. However, core inflation rose to a 19-month high of 1.0%, offering a glimmer of resilience in domestic demand. The Shanghai Composite Index fell 1.47% for the week, while Hong Kong’s Hang Seng Index dropped 4%, pressured by escalating trade concerns and weak property sentiment.

Gold fell over 2% on Friday to around $4,250 per ounce, retreating from record highs as easing U.S.–China trade tensions tempered safe-haven demand. Despite the pullback, the metal remains up more than 60% year to date, supported by expectations of U.S. rate cuts, geopolitical risks, and strong central bank and ETF demand. Meanwhile, Brent crude rose 0.4% on Friday to just under $61.30 per barrel, though it recorded a third straight weekly decline amid oversupply concerns. Rising U.S. inventories and an IEA forecast of a global crude surplus in 2026 continued to weigh on sentiment.

Next week, markets will focus on developments in the U.S.–China trade dialogue, the ongoing government shutdown, and a range of key economic releases — including the U.S. CPI, PMI, and existing home sales reports. In Asia, attention will turn to China’s Q3 GDP and other key data points, while in Europe, investors will watch Euro Area consumer confidence and UK inflation figures. Monetary policy decisions from the central banks of Turkey, Indonesia, and South Korea will also be closely monitored.

Market Moves of the Week:

South Africa is set to lift its long-standing moratorium on unconventional gas exploration, including shale resources, once new regulations are gazetted later this month, according to Petroleum Resources Minister Gwede Mantashe. The move is expected to reopen investment opportunities in the Karoo Basin, which the U.S. Energy Information Administration (EIA) estimates holds up to 390 trillion cubic feet of technically recoverable shale gas. The moratorium, in place since 2011, allowed for environmental and technical assessments amid concerns over hydraulic fracturing. Mantashe said the government has finalised a structured and transparent licensing framework under the Upstream Petroleum Resources Development Bill to ensure responsible exploration.

On the markets front, the rand remained under pressure for most of Friday, ending the session at R17.35/$, after a volatile week driven by global trade developments, while the benchmark JSE All Share Index gained 0.65% for the week, after a strong sell-off in resource counters on Friday.

Investors will turn their focus to next week’s September CPI release for insight into domestic inflation trends. Headline inflation eased to 3.3% year-on-year in August from 3.5% in July. A Reuters poll forecasts a modest uptick to 3.5%.

Chart of the Week:

U.S. equities weakened over the week as renewed trade tensions and the prolonged government shutdown weighed on sentiment. Markets were supported early on by strong gains in AI-related companies, highlighted by the AMD–OpenAI partnership, but later sold off after President Trump threatened large tariffs on Chinese goods. The shutdown entered its second week, delaying economic data and disrupting federal services, and while such events typically have only temporary effects, a longer duration could weigh more meaningfully on growth. At the same time, investors remained focused on the upcoming earnings season, with expectations for a ninth consecutive quarter of profit growth. Safe-haven demand increased, sending gold above $4,000/oz and U.S. Treasury yields lower. Fed minutes showed policymakers remained divided but still saw scope for rate cuts later this year.

European data signalled continued weakness, led by a 4.3% drop in German industrial production in August, driven by auto sector declines and broader softness across manufacturing. Exports also fell, particularly to the U.S., prompting the German government to introduce budget cuts and electric vehicle subsidies. Political instability added pressure as the resignation of France’s prime minister triggered a selloff in French assets and higher bond yields. In the UK, house prices declined and buyer demand remained weak, although business activity stabilised slightly. The ECB noted inflation is moving closer to target and growth may recover in 2026, though sluggish exports and a stronger euro could limit near-term momentum.

Japanese equities rose early in the week after Sanae Takaichi secured leadership of the ruling LDP, increasing expectations for fiscal stimulus and continued loose monetary policy, which weakened the yen. However, optimism faded as coalition partner Komeito withdrew support, raising uncertainty over government formation and fuelling speculation of a snap election. The 10-year JGB yield climbed to its highest level since 2008 on expectations of additional stimulus. Economic data was mixed, with wage growth slowing but household spending and producer price inflation both remaining firm, pointing to underlying demand despite political uncertainty.

Mainland Chinese equities were mixed in a holiday-shortened week, with the Shanghai Composite edging higher and the CSI 300 slightly lower, while Hong Kong’s Hang Seng fell more than 3%. Early consumption data from Golden Week was weaker than expected, with retail and restaurant sales rising only 3.3% – about half the pace of the May Labor Day holiday – and passenger traffic growth also slowing. This highlighted the ongoing challenge of shifting the economy toward domestic demand and services. Attention is now turning to the upcoming fourth plenum on October 20–23, where policymakers are expected to outline priorities for the next five-year plan.

Elsewhere, global central banks continued to ease policy to support growth. The Reserve Bank of New Zealand cut interest rates by 50 basis points to 2.5%, while Poland’s central bank reduced rates by 25 basis points to 4.50% in its third cut since June, citing slowing activity and stabilising inflation.

Global markets were mixed. In the U.S., the Dow fell 2.73%, the S&P 500 lost 2.43% and the Nasdaq declined 2.53%. In Europe, the Euro Stoxx 50 fell 2.13% and the FTSE 100 slipped 0.67%. In Asia, Japan’s Nikkei 225 rose 5.07%, the Shanghai Composite edged up 0.37% and Hong Kong’s Hang Seng dropped 3.06%. U.S. 10-year Treasury yields moved lower on safe-haven demand, while German and UK yields also declined slightly and Japanese yields rose. Gold strengthened and oil prices fell, while Bitcoin declined but remains higher year to date.

Market Moves of the Week:

South African policymakers moved to clarify their stance on inflation targeting after Finance Minister Enoch Godongwana criticised Reserve Bank Governor Lesetja Kganyago for a “unilateral” statement on lowering the target. The two later issued a joint statement signalling alignment, with Kganyago emphasising that the discussion is about timing rather than direction. He noted that expectations of a lower inflation target have already strengthened the rand and reduced government borrowing costs. The fiscal outlook has also improved, with revenue up more than 10% in the first five months of the 2025/26 year and spending rising only around 4%, partly due to delayed budget approval and tighter controls on social grants. After rising from 26% of GDP in 2009 to 77% in 2025, the debt ratio is expected to stabilise before gradually declining as Treasury targets a larger primary surplus. The mid-term budget will be presented on November 12. Manufacturing output rose 0.4% month on month in August, though remained 1.5% lower year on year.

South African markets were mixed over the week. The JSE All Share Index inched up 0.22%, supported by financials (+3.80%) and listed property (+2.48%). Resource stocks fell 1.40% and industrials declined 1.37%, weighing on overall gains. The rand weakened 1.61% against the U.S. dollar to R17.49 as global risk sentiment softened, while the South African 10-year government bond yield was little changed at 9.14%.

Chart of the Week:

As always, we appreciate your support and value your trust in LNKD Investment Manaers. 

The U.S. federal government shut down on October 1 after Congress failed to pass a funding bill. The shutdown has furloughed hundreds of thousands of federal workers, halted non-essential services, and delayed key data releases. Among the most notable was the September nonfarm payrolls report from the Bureau of Labor Statistics, which did not go ahead as scheduled. If the shutdown persists, other critical releases (such as the September CPI due October 15) may also be delayed.

In the absence of the payrolls data, markets turned to alternative indicators, with ADP reporting a 32,000 job loss in September versus expectations for a 51,000 gain. While this headline weakness added to conviction around further Fed rate cuts, much of the drop reflected ADP’s benchmarking to revised government data rather than a fundamental deterioration in labour market conditions.

Euro area headline inflation ticked higher to 2.2% year-on-year in September from 2.0% in August, driven by firmer services prices and a slower decline in energy costs. Core inflation, excluding food and energy, was unchanged at 2.3%. In a keynote address at the Bank of Finland, ECB President Christine Lagarde noted that inflation risks appear broadly contained in both directions, emphasising that with policy rates at 2%, the ECB is well positioned to respond should risks evolve or new shocks emerge.

On the labour front, the unemployment rate in the bloc edged up to 6.3% in August from July’s record low of 6.2%. Spain, France, and Italy recorded the highest unemployment rates, while Germany and the Netherlands posted the lowest. On a year-over-year basis, unemployment was unchanged at 6.3%.

The Bank of Japan (BoJ) signalled that it remains on a gradual tightening path but provided limited guidance on the timing of its next rate hike. Governor Kazuo Ueda noted that rates were left unchanged at the September meeting to maintain accommodative conditions amid U.S. tariff volatility. While the tariffs have weighed on exporters’ earnings, there are no signs of spillovers to the broader economy.

China’s official manufacturing PMI edged up to 49.8 in September from 49.4 in August, while the non-manufacturing PMI, covering construction and services activity, slipped to 50.0 from 50.3. Readings above 50 signal expansion, while those below 50 indicate contraction. Despite the manufacturing PMI slightly beating the median forecast, it marked the sixth consecutive month of contraction in factory activity. Both indicators suggest that economic weakness persisted into Q3, following stronger growth in the first half of the year.

Global equities posted broad gains despite the U.S. government shutdown that began on Thursday. In the U.S., the Nasdaq Composite led the gains, rising 1.32% for the week, while the Dow Jones and S&P 500 increased 1.10% and 1.09%, respectively.

European markets also advanced, with the STOXX Europe 50 climbing 2.76% in local currency to record levels, supported by strength in technology stocks and expectations of lower U.S. borrowing costs. The UK’s FTSE 100 gained 2.22% over the week.

In Asia, Japan’s Nikkei 225 rose 0.91%. Mainland Chinese equities also advanced in a holiday-shortened week, with the Shanghai Composite up 1.43% through Tuesday, September 30, before markets closed for the Golden Week holiday from October 1 to 8. In Hong Kong, the Hang Seng Index gained 3.82%, despite the market being closed on Wednesday for National Day.

Market Moves of the Week:

South African manufacturing sentiment improved in September, supported by strong domestic demand, according to the latest PMI survey. The seasonally adjusted Absa PMI rose to 52.2 points from 49.5 in August, marking only the second time this year the index has indicated expansion. The report highlighted that gains were driven by local demand, while global trade challenges, including U.S. tariffs and port disruptions, continued to weigh on the sector.

Formal employment in South Africa came under continued pressure in Q2 2025, according to Stats SA’s Quarterly Employment Survey (QES). The survey, which tracks formal jobs in the country excluding agriculture, forestry, fishing, and private households, showed job losses across key sectors, notably community services, trade, and manufacturing. The QES differs from the broader Quarterly Labour Force Survey (QLFS), which captures informal and domestic work as well as unpaid family labour. The data highlight ongoing strain in the formal labour market.

South African markets mirrored global trends, posting gains over the week. The JSE All-Share Index rose 2.88%, supported by broad-based sector gains. Industrials led the advance with a 4.12% return, while other sectors also made meaningful contributions. The rand strengthened 0.21% against the U.S. dollar, closing at R17.21/USD.

Chart of the Week:

As always, we appreciate your support and value your trust in LNKD Investment Managers. 

U.S. equities ended Friday higher but still closed the week in negative territory as investors digested key inflation data. The Federal Reserve’s preferred gauge, the personal consumption expenditures (PCE) price index, rose 0.3% in August, lifting the annual headline rate to 2.7% from 2.6% in July. Core PCE, which excludes food and energy, increased 0.2% for the month and held steady at 2.9% annually, in line with consensus forecasts.

The Bureau of Economic Analysis also revised second-quarter GDP growth to an annualized 3.8%, up from the prior 3.3% estimate, with consumer spending providing the largest boost.

Major U.S. indices ended the week lower, with the Nasdaq Composite and S&P 500 sliding 0.65% and 0.31% respectively, marking each index’s first losing week in four, while the Dow shed 0.15%.

Fed Chair Jerome Powell reiterated this week that while inflation expectations remain anchored near the Fed’s 2% target, downside risks to employment and elevated uncertainty leave policymakers without a “risk-free” policy path. He also noted that tariffs are likely to result in a one-time price adjustment spread over several quarters.

In Europe, the STOXX Europe 50 Index rose 0.76%, as markets weighed rate policy developments and ongoing trade tensions. Economic surveys signalled modest growth in the third quarter, with services activity expanding at the fastest pace this year, while manufacturing output lagged. Business confidence dipped to a four-month low.

In the UK, the PMI fell to 51.0, down from 53.5 in August, as both services and manufacturing slowed. Confidence also dropped to its weakest level since June, ahead of the November budget, nevertheless the FTSE 100 gained 0.74% for the week.

Japanese equities advanced, with the Nikkei 225 Index up 0.69%. Inflation in the Tokyo area rose 2.5% year-on-year in September, unchanged from August but slightly below expectations. In China, the Shanghai Composite Index gained 0.21%, while Hong Kong’s Hang Seng Index declined 1.54%.

Gold held above $3,750 per ounce, near record highs, supported by safe-haven demand despite a stronger dollar and higher Treasury yields, while oil prices advanced, set for their steepest rise since June, as Ukraine’s strikes on Russian energy infrastructure prompted supply concerns.

The week ahead brings a full slate of economic releases, led by the closely watched U.S. employment report, which will provide fresh insight into payroll growth, unemployment trends, and wage pressures—key indicators shaping the Federal Reserve’s policy outlook. In Europe, attention will centre on new inflation data for the eurozone and its member states, alongside CPI figures from Turkey and Switzerland. On the monetary policy front, interest rate decisions in Australia and India will also be in focus.

Market Moves of the Week:

In local news, South Africa’s producer inflation accelerated to 2.1% year-on-year in August, up from 1.5% in July, according to Statistics South Africa. On a monthly basis, the Producer Price Index (PPI) rose 0.3%, with the increase driven largely by higher prices in the food, beverages, and tobacco category, which climbed from 3.9% to 4.3% year-on-year as food inflation reached 4.1%.

Meanwhile, confidence indicators painted a weaker picture. The FNB/BER Consumer Confidence Index dropped sharply in the third quarter, retreating to -13, as households reported worsening financial positions and a weaker economic outlook. Retailer confidence also declined significantly, hitting its lowest level in a year.

In markets, the JSE All Share Index ended the week 0.56% higher, supported by continued strength in resource stocks. The rand firmed in late Friday trade, closing at R17.32 per U.S. dollar.

Chart of the Week:

As always, we appreciate your support and value your trust in LNDK Investment Managers.