‘Choppy’ is a word we used and heard a lot in November, as worries about tech overvaluations and stretched positioning finally made themselves heard amid previous unstoppable stock markets. The ensuing correction was tied to the bets on a December Fed rate cut, which were also volatile through the month. A less than one in three chance of 25bps reduction swiftly became near fully priced by the end of the month. That saw the risk rally regain its footing in US stocks especially, with a strong rejection of lower prices seen in the monthly candlestick pattern.
We started to receive US economic data again after the US government shutdown ended only after a record 43 days. The long-awaited September jobs report was released with mixed signals, as non-farm payrolls growth recovered to +119k but the unemployment rate still rose to 4.4%. The uptick was driven by an increase in native-born labour supply rather than weak demand. Marginally hawkish FOMC minutes also highlighted unusually mixed views at the world’s most important central bank. Crucially, it was announced that the October and November employment data would not be released until six days after the final FOMC meeting on 10th December. That means ratesetters will still be making policy decisions somewhat blindly.
The dollar was relatively quiet amid all the choppy price action in stocks as it printed a monthly doji candle denoting some indecision after again coming into resistance at the 200-day SMA. A spike higher during the middle part of November in the VIX index, Wall Street’s fear gauge, didn’t see much safe haven buying in the greenback. Gold gained for a fourth straight month as it found support around the psychological $4,000 mark, and bugs pushed prices above $4,200. Increasing Fed rate cut bets helped precious metals, with silver making a record high on the final trading day of the month.
Quote of the month: Nvidia CEO Jensen Huang rejects talk of AI bubble “We see something different.”
Major events of the month, in numbers:
*Nvidia -12.6%: The AI bellwether and poster child suffered its worst month since March. This contrasted with October where it had seen gains of more than 8.5% and the giant chipmaker had become the first $5 trillion market cap company. Its results saw a hugely volatile 24 hours, with the stock swinging from 5% gains in the after-market to a 3% lower close. The tech group both beat and raised on numbers and guidance, but a combination of factors saw investors ditch the world’s most valuable company. Increasing competition and Huang insisting Nvidia is not facing an Enron-style financial scandal hurt sentiment too.
*Bitcoin –17%: It was a rocky month for cryptos with the world’s most popular shedding over 20% at one stage. That’s almost $2 trillion in market cap. Concerns over less policy easing at the Fed and an imminent AI bubble hurt the bulls. Technicals likely didn’t help either, as further bearish sentiment was stoked by a ‘death cross’ on the charts – when the 50-day SMA crossed below the 200-day SMA in the middle of the month. As crypto adoption is increasing at institutional levels, regulators are also now grappling with how these assets should be taxed.
* Oil 4: Crude continued lower for a fourth month in a row as it neared the May trough, with levels below from February 2021. Markets are oversupplied while the prospect of a Russia-Ukraine peace agreement increased through the latter part of November. The large surplus in the market is likely to play into 2026 with supply and demand not expected to rebalance until 2027. OPEC+ paused any further supply increases over the first quarter of 2026 earlier in November.