US markets have bounced back from last week’s drop, posting their best four-day winning streak since May, to get back to being close to flat for the month, after dropping quite sharply in the first three weeks. Investors showed renewed appetite for risk this week, with the S&P 500 up 3.18%, the Nasdaq up 4.23%, and the Dow Jones Industrial Average up 2.56% at the time of writing.
Big tech stocks had dragged indices down the previous week as investors worried about the high valuations of Artificial Intelligence (AI) related companies. Tech and AI stocks such as Apple, Tesla, and Alphabet clawed back losses this week. Nvidia and Microsoft, the two largest stocks on the S&P 500, however, were still 12.9% and 10.4% down, respectively, from their recent highs.
The gains across the major indices, despite these drops in the two tech giants, indicates broad support for equities as we move into the final month of the year. One of the major factors fuelling confidence is growing anticipation of a Federal Reserve interest rate cut in December.
Markets assign the probability of a quarter-point Fed rate cut above 80%, due to softer-than-expected September retail sales and wholesale inflation as well as a weaker labour market. Earnings strength across the broader market is also laying the groundwork for sustained gains.
The optimism extended beyond US markets this week. The MSCI World Index rose 3.15%, the JSE’s All Share Index gained 1% and the rand strengthened to R17.13 against the US dollar at the time of writing. South Africa continues to benefit from an appetite for commodities, but the market strength has broadened into other sectors like financial services.
In previous years, Thanksgiving week has historically been positive for equities, although trading is usually thin. US markets close on Thanksgiving Day and trade for only half a session on Black Friday. Strong performance during this week and the week that follows often set the stage for a ‘Santa Claus’ rally in the last stretch of the year.
Analysis from Schaeffer’s Investment Research shows that when the S&P 500 gained at least 1% after Thanksgiving week, it went on to average a 3.9% return over the next three months, with 77% of the returns positive. This week’s performance is thus encouraging for year-end market expectations.
As always, rules about seasonal trading patterns are not cast in stone. Optimism can reverse quickly should corporate earnings estimates be revised downward. Broader structural factors, such as the Fed’s rate trajectory and other macroeconomic trends, will ultimately determine whether the gains are sustainable.
“It’s simply a snap back to the risk-off action we had in the last week or two, which was completely normal. Thanksgiving week is generally a strong week in the markets. Everyone’s feeling good.”
– Eric Diton, President and MD at The Wealth Alliance
“We’re building up for a classic year-end rally. Our main scenario is one where actually the macro environment continues to hold up well into 2026, the corporate earnings outlook looks pretty decent and you get the added tailwind of the lagged effect of rate cuts.”
– Daniel Murray, CEO of EFG Asset Management Switzerland
Global News
- Fed Governor Christopher Waller said on Monday that the Fed should move ahead with a December rate cut, arguing that softening labour-market conditions justify easing now. However, he stressed that any further action should be taken “meeting by meeting” as new data becomes available in early 2026. Waller noted that by January, policymakers will have updated inflation, employment, and spending figures to judge whether additional cuts are needed, cautioning against committing to a preset policy path.
- US economic growth is expected to edge up to 2% next year, from 1.8% in October’s outlook, according to a median of 42 economists surveyed in the National Association for Business Economics’ year-end poll released on Monday. However, inflation is still projected to stay above the Fed’s 2% target, with many economists cautioning that persistent price pressures in services and housing will keep underlying inflation sticky and limit the Fed’s ability to cut rates aggressively.
- Reuters said on Monday that global companies have sharply reduced references to tariff-driven price hikes in the third quarter of 2025, with just 28 firms flagging higher prices, down from around 90 in the first quarter, as trade-policy uncertainty eased and new US trade deals cleared the “tariff fog”. Instead of passing higher costs on to customers, many companies are opting to absorb tariffs or share costs with suppliers. Some major retailers even cut prices ahead of the holiday season to attract cost-conscious shoppers. The shift suggests companies are prioritising sales volumes over margin protection in a softer consumer-demand environment.
- The White House on Monday launched the Genesis Mission, a sweeping federal programme to harness government scientific data, supercomputers, and national laboratories to accelerate AI-driven research. Under the plan, the US Department of Energy will build an integrated AI platform that combines federal datasets, supercomputing capacity, and private-sector or academic partners, enabling AI models to automate experiment design, run simulations, and fast-track breakthroughs across biotech, materials science, energy, fusion, and national-security research. The initiative aims to restore US leadership in AI and scientific innovation by compressing discoveries that once took years into weeks or even days.
- Canadian Prime Minister Mark Carney said on Sunday that the world can progress without the US, following the G20 leaders’ meeting in Johannesburg, during which South Africa issued a leaders’ declaration despite a boycott by the Trump administration. Carney noted that the summit brought together countries representing three-quarters of the global population, two-thirds of global GDP, and three-quarters of world trade, underscoring a shift in the global economic centre of gravity. Meanwhile, sources said trade negotiations between the US and Canada have remained stalled since 23 October.
- On Wednesday, UK Chancellor Rachel Reeves announced £26 billion ($34 billion) in tax increases in a budget aimed at balancing the needs of both bond markets and Labour backbenchers. The announcement was overshadowed by turmoil after the Office for Budget Responsibility inadvertently disclosed that the government had lifted its fiscal “buffer” against the main fiscal rule to £22 billion, a substantial increase that offers greater room for spending and borrowing. The inadvertent leak of the update ahead of the official 2025 Budget triggered a burst of market activity, boosted investor confidence, driven by the wider safety margin. Although the expanded buffer is meant to give the government more flexibility to invest or spend while remaining within fiscal constraints, the premature leak drew scrutiny to the budget process itself.
- Wall Street’s macro-trading desks, including major firms such as Goldman Sachs Group and JPMorgan Chase & Co., are on track for their strongest year since 2009, with revenues from fixed-income, credit, and commodities trading expected to hit about $165 billion in 2025, a nearly 10% rise from 2024. This surge reflects a wave of client activity driven by global central-bank interest-rate moves, steepening yield curves, and uncertainty over tariffs and fiscal deficits, which have widened the fee pool, especially for rates traders. As a result, macro trading is proving a major revenue engine, returning markets and firms to a level of activity not seen in more than a decade.
- US data released on 20 November shows a widening gap between investor expectations for a rapid AI boom and the far slower reality on the ground. Only about 11% of US firms currently use AI in day-to-day production, with many stuck in pilot or experimental stages due to high costs, data limitations, regulatory uncertainty, and a shortage of skilled workers. Productivity gains remain hard to measure. Meanwhile, big tech companies are set to spend $5 trillion on AI infrastructure between now and 2030, investments that would require roughly $650 billion a year in AI revenue, up from about $50 billion today, to pay off, according to JPMorgan Chase. The result is a growing disconnect between massive AI investment and modest, uneven adoption, raising questions about whether market optimism is running ahead of real economic impact.
- Google is challenging Nvidia’s formerly unshakeable dominance in AI hardware, according to a recent analysis by The Economist. Google has begun selling its own tensor-processing units (TPUs), the same chips it used to train its new AI model, and is onboarding major clients, including Meta Platforms, signaling a shift in the competitive landscape. These TPUs are considerably cheaper than Nvidia GPUs, estimated to cost between a half and a tenth as much, offering a cost-effective alternative for firms building large-scale AI infrastructure.
- Alphabet – the holding company of Google – saw its shares jump nearly 7% on Wednesday after its new AI model, Gemini 3, earned “rave reviews,” signalling that the company may be regaining momentum in the AI race. The model’s strong debut contrasts with the mixed reception to OpenAI’s GPT-5 earlier this year, boosting investor confidence that Gemini 3’s improved reasoning, coding, and multimodal capabilities could drive a major new wave of AI-enabled products and potentially challenge leading players in AI infrastructure. Wednesday’s rally capped what has already been a standout year for Alphabet: its stock is up 57% in 2025, making it the best performer among the Magnificent Seven and delivering more than triple the gains of the Nasdaq 100 Index.
- HP said on Tuesday it expects to cut 4,000 to 6,000 jobs globally by fiscal 2028 as part of a plan to streamline operations and adopt AI to speed product development, improve customer satisfaction, and boost productivity. CEO Enrique Lores said teams in product development, internal operations, and customer support will be affected. The initiative is expected to save $1 billion over three years. HP previously cut 1,000 to 2,000 staff in February.
- Alibaba beat expectations in its latest quarter, reporting about US$35 billion in revenue, driven by strong growth in its “instant retail” one-hour delivery service and continued expansion in its cloud division. Although net profit fell 53% due to heavy investment and aggressive discounting in quick commerce, the results highlight the company’s strategic shift beyond traditional e-commerce toward cloud, AI, and rapid-delivery services. As China’s consumer-tech landscape evolves, Alibaba is repositioning itself as a diversified platform spanning retail, logistics, cloud infrastructure, and AI-driven offerings.
- Novo Nordisk said on Monday its experimental Alzheimer’s treatment failed to meet its primary goal in a late-stage clinical trial, delivering no significant slowing of cognitive decline compared with placebo. The setback is a blow to Novo’s efforts to expand beyond its blockbuster obesity and diabetes portfolio, and the company said it will now analyse the full dataset before deciding whether to continue development. The trial’s failure also underscores the broader industry challenge of developing effective Alzheimer’s therapies, where many companies have stumbled despite significant investment.
- As at Thursday’s close the S&P 500 was 3.17% up for the week.
Local News
- Democratic Alliance (DA) chairperson Helen Zille told Bloomberg on Tuesday that the Government of National Unity is unlikely to last its five-year term, arguing that deep ideological differences and internal tensions will make the coalition difficult to sustain. She noted that the alliance’s early disagreements over policy direction and cabinet responsibilities already point to instability and warned that its eventual collapse could trigger significant political volatility.
- President Cyril Ramaphosa yesterday urged G20 members to uphold multilateralism after US President Donald Trump announced on social media on Monday that South Africa would not be invited to the 2026 G20 summit in the US. Trump repeated the false “white genocide” claim and said the US would halt “all” payments and subsidies to South Africa without stating what these were. Ramaphosa said South Africa remains a full G20 member and criticised Trump’s “insults,” stressing the country’s sovereign right to participate.
- The ANC plans to tighten internal discipline ahead of its national general council from 8 to 12 December in Johannesburg, with a draft programme pledging stricter enforcement of Rule 25, which governs misconduct and sanctions, including reprimands, suspension, and expulsion. The rule has been invoked against figures such as Senzo Mchunu, Malusi Gigaba, Pule Mabe, and Ace Magashule. Discussions at the council will cover local government, economic transformation, the 2026 election campaign, and the ongoing national dialogue.
- National Treasury said on Wednesday it has proposed a 20% tax on gross revenue from online gambling and interactive betting, arguing it could raise over R10 billion a year while helping curb the social harms associated with widespread online betting. Critics, including the South African Responsible Online Gambling Association, say the plan is unworkable, noting that the consultation paper fails to quantify gambling-related social costs, underestimates the difficulty of monitoring offshore servers and payment systems, and overlooks how high taxes often push players toward unregulated platforms. It warns that the proposal could fuel illegal gambling, reduce potential revenue, and do little to address the root causes of addiction.
- The South African Revenue Service (SARS) says it has collected more than R100 million from politically exposed persons (PEPs) – individuals with public influence – since launching a targeted compliance drive earlier this year. Finance Minister Enoch Godongwana said on Wednesday that this is part of a broader push to hold high-profile taxpayers accountable and reinforce fairness in tax collection. The move signals SARS’ commitment to crack down on tax evasion or non-compliance among elites, while underlining that even politically connected individuals are expected to meet their fiscal obligations.
- The Gauteng Provincial Government owes Microsoft R344 million in unpaid licence fees, a shortfall that emerged in a recent e-Government portfolio committee meeting and reflects part of a broader R631 million in debt from the 2022 to 2025 agreement. Despite the outstanding liability, the province has signed a new three-year contract (2025 to 2028) with Microsoft, which is worth about $53.2 million, 33% more than the previous deal. Critics warn that the unpaid fees threaten essential services, from hospitals and schools to government departments, by putting the province’s digital infrastructure at risk.
- Pepkor plans to leverage its 5,000-plus stores and more than 30 million clients to enter the banking sector, it said on Tuesday. The group is also seeking fintech acquisitions to strengthen its offerings, aiming to replicate Capitec’s success in disrupting the industry and growing market share. Pepkor is also entering the fast-growing beauty market, while closing its loss-making Shoe City chain. Pepkor posted revenue up 12% and operating profit up 13.2% for the year to September.
- Prosus reported a sharp rise in profitability, driven by strong e-commerce growth and a partial sale of its Tencent stake, a clear step in its shift from passive investor to active operator. Adjusted EBITDA nearly doubled to $423 million in the first half, while revenue rose 22% to $3.6 billion, supported by solid performances at iFood in Latin America and OLX in Europe. Parent company Naspers also recorded higher revenue and earnings, reflecting broader group momentum. Prosus’ healthy cash position and ongoing asset sales leave it well placed to sustain growth, reinvest, and unlock shareholder value.
- E-tailer Takealot.com is seeing rising online shopping in South Africa, boosting its half-year results, the company said this week. The Naspers-owned platform now has 4.8 million active shoppers, up 14% year-on-year. Growing customer activity drove 20% revenue growth and a 29% increase in gross profit. Across the Takealot Group, 30,000 SMEs are now trading online, along with 12,000 restaurants, 17,000 delivery drivers, and 9,000 township personal shoppers.
- Cell C listed on the JSE yesterday, debuting at R27 a share, 50c above its final pre-listing offer, with almost 4,000 shares trading within minutes. CEO Jorge Mendes marked the occasion by blowing the kudu horn at a packed Sandton auditorium. The 2001-founded telecom joins the main board under the code CCD, alongside MTN, Telkom and Vodacom, marking the fifth IPO on the JSE this year and a decade after the operator first considered listing.
- Tsogo Sun, South Africa’s biggest hotel operator, is accelerating growth of its online betting business, launching about 1,000 new games in November and exploring acquisitions, the group said yesterday. The company warned this expansion could weigh on short-term profits. Its online betting division turned profitable in August, with net gaming revenue up 15% and core earnings rising 40% for the six months ended September. Plans may face challenges from National Treasury’s proposed 20% online gambling tax.
- Uber on Wednesday launched Uber Go Electric in South Africa, offering fully electric vehicles through fleet partner Valternative as part of its 15-year global push to go fully electric. The move aims to cut driver costs on fuel and maintenance while providing quieter, more comfortable rides. Uber Go Electric will compete with Bolt’s low-cost Bajaj Qute vehicles. The rollout follows Uber’s 2023 electric scooter delivery service. Johannesburg has started developing an e-hailing management policy.
- As at the time of writing, the rand was 1.3% stronger and the ALSI was 1% up for the week.
Sources: Dynasty, Reuters, Bloomberg, TechCentral, Business Day, CNN, The Economist, ITWeb, CNN, etc.
