Most U.S. stock indices were weaker WoW, except for the small/mid cap Russell 2000 which has strung together some amazing gains YtD (+7.9%). Other global equity indices were generally positive. USTs lost ground, and both gold and Bitcoin pushed higher. This all happened in a backdrop in which the U.S. president introduced a series of populist and interventionist proposals that are drifting wider and wider from Republican principals.

There were more ideas coming from Mr Trump last week than seemed possible, a reflection of desperation as the affordability crisis continues to weigh on his administration and the approaching mid-term elections. Some ideas were simply ridiculous, but investors are used to it by now. This was reflected as risk markets remained solid, with several U.S. and foreign stock markets closing Friday at record highs.

The last two weeks were rather uneventful, so this is a quick summary of price performance in 2025, and a look ahead to 2026. Are we in a bubble and don't know it?

Stocks were mixed last week, with European stocks turning in the best performance of the week, and Japanese stocks the worst. Tech stocks drove the NASDAQ higher, with the DJIA and Russell 2000 losing ground. Treasuries and gold were better bid. The catalysts were US economic data and several important central bank decisions, all of which were as expected. The coming weeks will be holiday-shortened.

The FOMC fell in line and served up an expected "hawkish rate cut". However, both Oracle and Broadcom – key players in the A.I. boom – saw their shares sink for different reasons, with the common denominator being A.I. valuation concerns. Yields were higher and gold rallied.

Stocks liked the economic data that was released this week, even though it was still light on official data as the US government recovers from its recent closure. Bond investors less happy, as yields gapped higher across the curve. All eyes are now on next week's FOMC meeting, where a 25bps reduction in the Fed Funds rate looks fully priced in.

Risk assets recovered strongly during the holiday-shortened (US Thanksgiving) session, with U.S. stocks leading the way. Japanese and European stocks rallied too. Bitcoin recovered slightly, and gold was higher. The catalyst was mainly growing expectations that the Fed would lower its policy rate at the December FOMC meeting. In the UK, chancellor Rachel Reeves delivered the tax-fuelled budget.

The weekly update covers NVDA's excellent earnings; the A.I. shine which is wearing off; the minutes from the last FOMC meeting (Oct); and the fall of Bitcoin.

It was a holiday shortened, rather lacklustre week in markets. Good that 2022 is over. FY returns were poor across equities and bonds.