November was a volatile month for financial markets, as they dealt with the longest U.S. government shutdown in history, concerns about the valuations reached in companies linked to Artificial Intelligence, and sudden changes in the expectation of a further interest rate cut by the Fed. Returns were flat or slightly positive in equity markets.
No investor would deny that 2025 has been a “lively” year. Tariffs, interest-rate cuts, and questions about a potential artificial-intelligence “bubble” have dominated headlines in recent months. Even so, 2025 will also be remembered as a year of transition and adjustment.
High stock market valuations and the concentration of gains, especially in the technology sector, dominate much of the analysis, although MAPFRE's experts point to another crucial factor: central bank policy. With the Fed facing another rate cut and a likely change in its chairmanship, and a European Central Bank that could take the opposite path if economic growth exceeds expectations, monetary policy could be decisive in the currency, bond, and equity markets.
The Japanese stock market has made a strong comeback and is once again on investors’ radar after years of being overlooked due to a weak economy and a deflationary backdrop.
The British government is facing a difficult decision. It is being forced to face a large fiscal deficit, while its economy shows signs of high inflation and weak growth. This is the backdrop for the presentation of its upcoming budget, which will have to involve some "unpopular measures" if it wants to control the deficit, explains Alberto Matellán, General Manager at La Financière Responsable, who sees similarities with other European countries, such as France.
Javier de Berenguer, analyst and fund selector at MAPFRE Inversión, analyzes the possibility that we are facing a stock market bubble by reviewing the available data.
This week, the world's major stock markets have seen days of heavy selling, mainly driven by doubts about high valuations in the technology sector and the Fed's less favourable stance on interest rate cuts in the short term. But these slight declines are a ‘healthy’ adjustment after recent gains, according to Alberto Matellán, General Manager of La Financière Responsable.
With just one month left to close the fiscal year, markets remain upbeat, and according to Alberto Matellán, General Manager at La Financière Responsable, that optimism could last a while longer. “I think the trend may continue, because the reasons behind it should not necessarily disappear,” he says.
October was another month of positive returns for both equities and the main fixed-income indices. This solid performance in the capital markets was mainly driven by an upturn in economic indicators, a better-than-expected earnings season, and another interest rate cut by the Federal Reserve.