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Craig Farley, of Team Asset Management, offers this week’s round-up of the markets
Investors chowing down on their celebratory turkey and pumpkin pie could afford a smile as US equity markets powered to their best Thanksgiving week since 2008. Dovish comments from Federal Reserve Governor Christopher Waller and New York Fed president John Williams pointed to an open endorsement of further US interest rate cuts, a position that has been bolstered of late by softer economic reports in America.
The Commerce Department reported that US retail sales increased by 0.2% in September, down from 0.6% in August and below estimates for around a 0.4% increase (the October retail sales data release was delayed due to the federal government shutdown). Meanwhile, The Conference Board reported that consumer confidence fell sharply in November, with its Consumer Confidence Index dropping 6.8 points to 88.7, the lowest level since April.
Markets are embracing the mantra “Don’t Fight the Fed”, a term purportedly coined by the late great investor Marty Zweig in the 1970s. The logic is that action taken by the Federal Reserve to lower interest rates and borrowing costs for government, consumers and businesses should stimulate economic activity and create a favourable investment climate for risk assets.
A major development in the artificial intelligence arms race came from Alphabet (parent company of search engine Google), whose latest generative artificial intelligence model Gemini 3 announced strong performance metrics and received rave reviews from critics. The icing on the cake is that Gemini 3 has been “trained” using Google’s own TPU (tensor processing units) rather than market leader Nvidia’s chips. The race, as they say, is on…
Closer to home, we witnessed another real-time Labour government omnishambles as the Office for Budget Responsibility (OBR) inexplicably leaked full details of the long-awaited UK Autumn Budget fully 30 minutes before Chancellor Reeves’ speech to the country. The subsequent internal investigation into the mistake, now acknowledged as the worst failure in the organisation’s history, triggered the resignation of chairman Richard Hughes.
The lead up to the event was mired in flip-flopping and U-turns and the outcome was more of the same: a pro spending, pro taxation plan with zero policies designed to stimulate growth. Businesses are not amused.
The net effect is that the alarming gap between the UK’s long-term borrowing costs and other advanced economies continues to widen, pointing to a “UK premium” on account of the perilous and dire fiscal situation. Once again, the hard choices to plug the “black hole” have been avoided and Britain’s spreadsheet consultants and quangos seem hopelessly out of touch with reality.
However, it is not just a UK issue. Despite a strong economy and relatively low unemployment situation, Trump’s second American presidency has been characterised by ballooning deficits.
In October alone, the US recorded a negative $284 billion deficit. Nearly a quarter of every US tax dollar raised is currently spent on interest payments or about $100 billion per month. Amidst current ebullient sentiment, the growing debt mountain is something worth keeping an eye on as we head into 2026.
In the commodities space, the gold price rallied to six-week highs, closing above $4,200 per ounce once again. A new marginal buyer has emerged in the form of stablecoin companies including Tether, who have taken the baton from global central banks.
Not to be outdone, silver rallied over 10% this week to new all-time highs on a combination of tight global supply and accelerating demand from industries including AI and data centres, EVs and solar.
The gold to silver price ratio currently stands at 1:75. Throughout history, the ratio has frequently moved down to below 1:20 and has touched as low as 1:3, implying substantial potential further upside for the silver price. Precious metal “bugs” will be licking their lips and hoping that history repeats.
Turning to the crude oil market, prices remain depressed as Trump’s government proposed a 28-point peace plan for a resolution of the war in Ukraine’s Donbas region, as well as establishing a broader European and global security network. However, with President Putin stubbornly insistent on securing swathes of Ukraine land for Russia that remain unconquered, it is hard to envisage a breakthrough in the short term.
Investors heading into December will be hoping for a final flurry higher to cap a remarkable year for global markets.
