Week ended Nov 28, 2025: risk assets recover and head higher

I have decided that I like short weeks, especially around Thanksgiving.  Not only do I enjoy the turkey feast, but the holiday also seems to cheer investors .…. quite a bit in fact based on the strong and steady recovery of risk assets this past week.  In this update, I will discuss the “Fed put” and the U.K. budget, and then discuss performance.

Fed’s got your back

Friday before last marked the beginning of a steady recovery in U.S. stocks, led by tech shares, as A.I. bubble concerns gave way to growing confidence that the Fed would reduce its benchmark policy rate by another 25bps in early December.  There is nothing more investors like than easy money, and the Fed’s direction of travel – above-target inflation and cost-of-living concerns be damned – appears to be in that direction. 

For #Bloomberg subscribers I suggest that you read John Auther’s Bloomberg Opinion article from Tuesday, “The ‘Greenspan Put’ Beats a Correction, Once Again.”  Mr Authers’ article contains insightful commentary with supporting graphs, suggesting that the recovery of stocks the last few trading sessions is mainly attributable to the growing likelihood that the Fed will reduce its benchmark policy rate at the next FOMC meeting.  Sentiment in this direction has changed quickly and decisively, thanks to several accommodative-minded Fed “Talking Heads” espousing a reduction along these lines as they were out on the circuit during the last week or so.  And let’s be honest – buying-the-dip becomes much less risky when investors believe that the Fed has your back.

With that context, you might not be surprised to learn that it was a “nearly everything up” sort of week, with global stocks and other risk assets in positive territory following a few difficult weeks.

The U.K. budget

In the U.K., the much-anticipated autumn budget was delivered on Wednesday by Rachel Reeves, the Chancellor of the Exchequer.  Happy Thanksgiving to my British friends, who are going to see their taxes increase further under this Labour government.  Labour seems unwilling to do what needs to be done on the expenditure side of the equation to balance a series of tax increases.  Perhaps even more importantly, this government so far has been incapable of serving up policy initiatives that will spur economic growth, as the U.K. continues to suffer from the aftermath of the horrible decision (economically) for the U.K. to leave the E.U. nearly 10 years ago.  Ms Reeves perhaps did the best she could in light of pressures from the trifecta government bond (i.e. Gilt) investors, more liberal fringes of her own party, and an increasingly dissatisfied electorate.  Markets really didn’t react that strongly because the government had done a decent job of conditioning investors as to what was coming. 

The one provision that hits the wealthiest parts of London the hardest is the “High Value Council Tax Surcharge” on houses worth more than £2 million.  If I understand correctly, the net effect will be a surcharge on properties worth more than £2 million of £2,500 per annum, scaling up to £7,500 per annum for houses worth £5 million or more.  The tax will not kick in until 2028, as properties are set to be re-valued in 2026 by the Valuations Office Agency.   The surcharge will not go to local authorities (i.e. councils), but directly to the central government. 

Since I have a lot of American and British readers, you might be wondering how egregious this increase in U.K. property taxes is compared to current property taxes in the USA, for example.  If I did the calculations correctly, the owner of a roughly £5 million house ($6.5 million equivalent) in a wealthy borough like Kensington & Chelsea pays around £3,500/annum in council tax now.  The surcharge would increase the pro forma tax to around £11,000/annum.  I did back of the envelope comparisons using A.I. to compare this to property taxes on similarly valued homes in the USA.  Annual property tax on a $6.5 million house (£5 million equivalent) in New York City would be around $146,250/annum (£112,500/annum equivalent), in Miami around $130,000/annum (£100,000/annum equivalent) and in Washington DC around $60,000/annum. (£46,150 equivalent).  As you can see, property taxes in the U.K. – even after the surcharge – remain dramatically less than property taxes in these three large U.S. cities. 

MARKETS THIS WEEK

Global risk assets rallied hard last week, following an inflection point that occurred Friday before last starting in the U.S.  Since November 20^th (five trading sessions), the S&P 500 has increased 4.7%.  As far as last week, the best performing index in the U.S. was the Russell 2000 (+5.5% WoW), a composite of small and middle sized companies that tend to be most sensitive to changes in interest rates.  However, many corners of the tech market also experienced a strong rebound, led by Alphabet (GOOG).  NVIDIA (NVDA) did less well, as concerns continue to circulate around their A.I. chips and certain of their investments in other A.I.-related companies.  Outside of the U.S., global stock indices were much better across the board too, led by Japanese and European stocks.  The U.S. Treasury bond market also settled down, as economic data continues to deliver a slight bias towards a slowing economy and sagging consumer confidence.  Yields were around 4bps tighter across the curve.  Corporate credit spreads also tightened sharply in both investment grade and high yield, as credit appetite improved along with appetite for stocks.  Bitcoin bounced off its recent lows, delivering a solid WoW gain of 6.8% but remains down YtD (-2.7%).  Gold delivered a solid 4.7% WoW return, boosting its YtD return to a rather amazing 61.8%.  Friday’s session was affected by a disruption to the CME prior to the market opening, but this had little effect on the holiday-shortened session as stocks gained steam throughout the session and into the close.

Below are updated tables for the week ended November 28, 2025. 

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