Global Asset Allocation Team Market Update – December 2025

Global equity markets were virtually unchanged in November, with the MSCI All Country World declining -0.1%. Regionally, results were mixed. The S&P 500 (+0.1%) lost some momentum as a sudden bout of risk aversion shook markets and lead to a sharp plunge in some of this year’s highest-flying stocks. Indeed, the heavyweight technology sector (-4.4%) posted its worst month since March amid mounting concerns over lofty AI-related valuations. However, the S&P/TSX (+3.7%) saw some notable outperformance thanks to solid results the gold sector (+14.5%) that represents ~13% of the index. Elsewhere, the MSCI EAFE (+0.5%) capped a fifth monthly gain, while the MSCI gauge of emerging market stocks (-2.5%) stumbled in its first monthly decline this year.

Fixed income markets generated positive results following dovish-leaning comments from some influential Federal Reserve officials. Notably, New York Fed President Williams signaled that he sees room for a rate reduction “in the near term” amid labor market softness – while Governor Waller and San Francisco Fed President Daly added to the “cut” camp. That saw investors raise the odds of a December rate cut to north of 80%. The Bloomberg US Aggregate Bond Index rose 0.6%, while the FTSE Canada Bond Universe inched up by 0.3%.

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