The Monday Report – 01 December 2025

This story features CAPRICORN METALS LIMITED, and other companies.
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The company is included in ASX200, ASX300 and ALL-ORDS

After the mid-month volatility the S&P500 finished flat in November and up 3.7% last week, despite the Thanksgiving Holiday on Thursday.

The Australia market ended 2.35% higher last week, with the ASX200 futures pointing to a flat-to-slghtly positive start to the month of December.

Good Morning,

The Australian market finished flat on Friday and the ASX200 snapped a four-week losing streak last week finishing 197 points (2.35% higher) at 8614. 

What happened overnight, NAB Markets Today Research extract

November has ended with the AUD/USD finishing exactly where it started at 0.6550 to be up 1.5% on the week. Ditto the S&P500 is also flat on the month, after posting successive gains on each of last week’s four trading days. 

Pricing for a 10 December -25bps Fed rate cut ended Friday at 83% from just 35% prior to New York Fed President John Williams’ comments the prior Friday about there being room for a near term rate cut. FOMC officials have now entered the cone of silence ahead of next week’s meeting.

There was a fair amount of (non-US) economic data Friday. In Japan, the combination of November Tokyo CPI showing inflation still cruising much nearer 3% than 2% alongside strong production, sales and labour market data did see pricing for a December BoJ rate hike lift to 58% from 55%.

This ahead of a now keenly awaited speech from BoJ Governor Ueda Monday (and which follows comments Sunday from Japan’s FinMin Katayama claiming it’s ‘clear that FX moves are not based on fundamentals’).

Canada’s much stronger than expected Q3 GDP data, annualising at 2.6% against just 0.5% expected was led by a 12.2% rise in government investment and 6.7% rise in residential investment. Consumption expenditure was down -0.7%.

November preliminary CPI data for France, Italy and Germany showed a mixed picture, on an EU harmonised basis France held at 0.8% against an expected rise to 1.0%, Italy fell to 1.1% from 1.3% against 1.3% expected while Germany rose to 2.6% from 2.3% against 2.4% expected.

Pan-Eurozone CPI is out Tuesday where the current consensus is for an unchanged 2.1% and which should leave the ECB comfortably on hold later this month. ECB President Christine Lagarde said as much on Saturday, telling Slovak TV station JOJ24 “The interest rates we settled on at the last meetings are, in my view, set correctly. I keep saying that we’re in a good position given the inflation cycle, which we’ve managed to get under control.”

Sunday saw the China official (NBS) November PMIs fall slightly short of expectations, manufacturing up 0.2pts to 49.2 but shy of the 49.4 consensus. And non-manufacturing falling to 49.5 from 50.1 against 50.0 expected. With two months of Q4 data now behind us, and depending on what the RatingDog equivalents show this week, Q4 GDP is shaping up to be weaker than Q3.

Equity markets had a good week, meaning most of the prior two weeks weakness has now been retraced. The MSCI ACWI for example, benchmarked by most Australian superannuation funds, was up 0.4% Friday to be 3.5% up on the week and back where it was on 10 November when the US-led global sell-off commenced.

The Russell2000 was the week’s top performing index amongst those we track, up 5.5% in conjunction with revitalised hopes for December Fed easing, with the NASDAQ up 4.9% and S&P500 up 3.7%, the next best performers. The Eurostoxx 600 is up 2.6% on the week and the ASX200 2.4% after a flat Friday. Only the Hang Seng had a down day (-0.3%) but was still up 2.5% on the week.

Bond markets, with the exception of Australia which continues to march to its own drum, benefited last week from the revival of Fed rate cut hopes, though US Treasury yields edged 1.5-2.5bps higher in Friday’s holiday thinned session, while 10-year Bund yields added 1bp.

Gilts in contrast were down -1bps to be -10bps down on the week following Wednesday’s Budget. Australian government bonds in contrast lifted another 3.5bps Friday in 10-year futures-implied yields terms for a rise of 6.5bps on the week and so a double digit spread widening over US Treasuriess.

On the subject of the Fed, specifically who will be the new chair, current favourite for the job, White House National Economic Council Director Kevin Hassett, was on CBS’ Face the Nation on Sunday. 

While he declined to address whether he considers himself the front-runner to replace Fed Chair Jerome Powell, he cited positive market reaction to the news that Trump is seen as close to naming his pick. The Bloomberg report naming him as the favourite.

“We had a great Treasury auction, interest rates went down and I think that the American people could expect President Trump to pick somebody who’s going to help them have cheaper car loans and easier access to mortgages at lower rate,” Hassett said. “That’s what we saw in the market response to the rumour about me.”

Commodities saw good gains for base metals, gold and silver Friday. The London Metal Exchange index up 2.0% and 3.6% on the week and gold 1.3% to US$4,239, meaning it has now recouped about 75% of the October sell off to US$3,887 from $4,380.

In contrast, oil slipped Friday but only about -0.2% while iron ore lost -1.2% (but is still 1.4% up on the week).

On Sunday, OPEC-plus indicated it will stick with current plans to pause production increases during the first quarter of next year, amid growing signs of a surplus in global oil markets

The Year-End Rally Begins, Lance Roberts, The Bull Bear Report, extract

Markets surged into the Thanksgiving holiday, ending the week with substantial gains across all major U.S. indexes. The S&P500 rose by approximately 3.7%, marking one of its strongest weeks in the past six months.

The catalyst was a combination of falling bond yields and increasing confidence the Federal Reserve has completed its rate hikes. Currently, Kalshi (prediction market) is projecting an 80% chance of a rate cut in December.

With inflation data continuing to trend lower and growth indicators remaining stable, the markets are starting to price in stronger earnings and economic growth in 2026, particularly as lower Treasury yields boosted duration-sensitive sectors and encouraged risk-on behavior.

Unsurprisingly, despite all of the recent talk of the “Death of the AI Trade”, Technology stocks once again led the charge. The AI narrative regained momentum, pulling mega-cap names higher and lifting the broader Nasdaq.

Nvidia’s earnings beat helped reinforce the bull case around AI infrastructure and cloud demand. The “Magnificent Seven” tech leaders contributed outsized returns to index performance, though broader participation remained limited.

Volatility declined as technical indicators turned more supportive after the last few weeks of choppy action, which was also unsurprising. Despite the gains, many risks remain, including concentration in the market-cap-weighted index, valuations, and market breadth.

However, those concerns may take a backseat temporarily following the recent correction and reversal in bullish sentiment.

Heading into December, all eyes will turn to the upcoming PCE inflation report, jobs data, and the final round of Fed comments before the blackout period. Until then, momentum favors the bulls, but the foundation remains fragile.

Over the last few weeks, we discussed the risk of downside pressure in the market and that the correction set up potential for a rally during the holiday-shortened trading week. That occurred with the S&P500 rising roughly 3.7% from last Friday’s close near 6,849.

That rebound recaptured the losses from the prior AI- and rate-cut-wobble selloff and pushed the index back toward its late-October highs. On a bigger picture basis, the index remains up around 16% year-to-date and is now roughly flat for November, reflecting a strong tape that has simply been digesting earlier gains.

The rally also triggered a fresh momentum “buy signal” which will be supportive of further gains into next week.

From a trend standpoint, the price remains aligned with the bulls. The S&P is trading above its rising 50- and 100-day moving averages, which sit roughly in the 6,700–6,575 zone, and well north of the 200-day moving average near 6,175.

Earlier in November, the index finally broke its streak above the 50-day moving average (DMA) and corrected back to the 100-DMA, working off some of the speculative excess in AI and high-beta names. This week’s bounce off that support pulled the price back into the upper half of its recent trading range, keeping the primary uptrend intact.

Volatility has cooled but not disappeared. After spiking into the upper 20s during the recent tech/AI downdraft, the VIX slid back into the high teens, around 16, by Friday’s close, signaling the panic bid for protection is fading but that investors are not yet entirely complacent.

That’s consistent with a market transitioning from a “shot across the bow” correction to a more typical year-end positioning grind.

Breadth is improving, but it isn’t a blow-out green light. Roughly 59% of S&P500 stocks are back above their 50-day moving averages, and just over 61% trade above their 200-day, a solid improvement from the trough earlier in the month but still shy of the 70%-plus readings you’d expect in a truly broad-based rally.

Participation has also expanded beyond mega-cap tech, with more cyclical and value names stabilizing; however, leadership remains heavily tilted toward large-cap growth and AI-adjacent beneficiaries.

Bullish case heading into December: Seasonality, positioning, and trend still lean in favor of the bulls. December is historically one of the stronger months for equities, particularly when the market is already up by double digits year-to-date.

Expectations for a December Fed rate cut, and a gradual cooling of inflation, support the “soft-landing” narrative, while corporate buybacks and under-invested managers create fuel for a “chase into year-end” if resistance gives way.

With volatility easing and breadth improving, the path of least resistance near term remains higher if key support zones are maintained.

Bearish case heading into December: The bears will point out that valuations in AI and growth remain stretched, that volatility is still elevated compared to the summer lows, and that breadth, while improved, is not confirming a runaway advance.

The recent episode, where AI leaders and other risk assets (including Bitcoin) sold off together, is a reminder that risk appetites can shift quickly when the crowd questions the durability of earnings or the timing of Fed cuts.

Delayed economic releases from the earlier government shutdown create an additional wildcard: a batch of weaker-than-expected data hitting all at once could challenge the soft-landing narrative just as liquidity gets thinner into year-end.

Corporate news in Australia

-Treasury Wine Estates ((TWE)) has warned it will book a significant non-cash impairment against its US operations, with all $687.4m of Americas goodwill likely to be written off.

-Capricorn Metals ((CMM)) may merge with Genesis Minerals ((GMD)) or other gold companies to grow scale.

-Blackstone is reportedly in negotiations with AI start up Firmus Technologies to provide debt financing.

-US private equity firm TPG Emerging Companies Asia fund is expected to buy NZ’s Tamaki Health off Pacific Equity Partners.

-Droneshield ((DRO)) has reportedly mandated JP Morgan managing director Seth Schwartz as its defence adviser.

-TPG Capital is anticipated to add UBS to its advisory for the Greencross IPO next year, valued at around $3.75bn.

-KMD Brands ((KMD)) could be split as buyers look at Kathmandu and Rip Curl.

-AEMO has warned of blackout risks if Origin Energy’s ((ORG)) 2880 MW Eraring coal plant closes in 2027.

-TikTok’s Australian data centre plans are stalled over FIRB approval.

-Tyndall Asset Management is closing after losing a major superannuation client.

-Britain’s Home Office has launched an investigation into Corporate Travel Management’s ((CTD)) overcharging to house migrants who entered the UK unlawfully worth $162m.

On the calendar today:

-AU 3Q Business Indicators (Inventories)

-CH Mfg, Non-Mfg PMI

-DYNO NOBEL LIMITED ((DNL)) ex-div 9.5c

-METCASH LIMITED ((MTS)) 1H26 Earnings

-ONEVIEW HEALTHCARE PLC ((ONE)) AGM

-TUAS LIMITED ((TUA)) AGM

FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/

The Australian share market over the past thirty days…

For more detail go to FNArena’s Australian Broker Call Report, which is updated each morning, Mon-Fri.

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