Week ended October 24, 2025: stocks hit record highs (again)

Writing this weekly update is starting to get boring, because everything goes up every week, or so it seems.  Having said that, one casualty this past week was gold, which finally seems to have come off the boil.  The price of gold declined nearly 6% on Tuesday, and then stabilised but still ended down 1.8% on the week, the first weekly decline in the price of this safe haven precious metal since mid-August.  All global equity indices were higher (yawn) on the week – most ending at or near record highs – and UST yields were flat in spite of the better-than-expected US inflation read for September. 

My feelings as an investor might end up being incorrect, but my instinct is to take just a bit off the table at these levels.  I lightened slightly in AAPL and GOOG on Friday, both at around record highs.  This might prove to be ill-timed given earnings of the companies are just around the corner.  However, I still own plenty of both stocks and simply could not resist at these levels.  Should either stock come off their recent highs, I would consider topping back up depending on what else is going on at the time.  And if not, it’s been a nice ride.

What matters for the week ahead

This coming week will be busy, with all eyes focused on the FOMC decision on Wednesday and loads of S&P 500 earnings.  Markets are already pricing in a 25bps reduction in the Fed Funds rate at this week’s meeting, so what will be more important is the “body language” of Fed Chair Powell in the post-decision commentary and Q&A.  In particular, investors will be looking for soft confirmation that the easing cycle will continue in December (next FOMC meeting) and into early 2026.   The CME FedWatch Tool is predicting further 25bps reductions at the next two policy meetings, in December and January.  As far as earnings, 172 more S&P 500 companies report earnings this coming week including five of the infamous Mag7 companies: MSFT, AAPL, GOOG, AMZN and META.  Outside of the US, both the ECB and Bank of Japan have monetary policy meetings this week (both decisions Thursday), with Eurozone CPI (October) and 3Q25 preliminary GDP figures also to be released towards the end of the week.  Lastly, President Trump is in Asia this week, and is expected to meet with President Xi of China on the sidelines of the APEC summit in South Korea in an effort to ease trade tensions between the world’s two largest economies.

Markets

As mentioned earlier, global stocks took another leg up last week, with UK and Japanese stocks surging the most. Three of the four US indices I track closed the week at record highs. You haven’t needed to be that right as far as your stock allocation globally to generate nice returns this year, but you do need to have been invested in equities. US Treasury yields bounced a bit but were largely unchanged, although yields at the short end of the curve moved a touch higher even as September CPI figures certainly cemented another reduction in the Fed Funds rate on Wednesday. Gold grabbed a lot of attention last week, because the price fell for the first week since mid-August. Gold trading during Tuesday’s and Wednesday’s highly volatile sessions grabbed headlines, although the price stabilised and gold finished the week down only modestly. Although there are technical factors that have been behind the steady ascent in the price of gold, I have little doubt that retail has caught the fever, too, and is keen to buy dips. Sound familiar? Oil prices also blipped higher after President Trump announced new tariffs on Russian oil (discussed further below). Corporate credit spreads were better, following the lead of sentiment in the equity markets and expressing comfort with yield stability.

You can find updated tables at the end of this update.

Here's what caught my attention last week (aside from retail investors hoovering up nearly everything).

September CPI, USA

Although there was plenty of financial news last week, nothing was more anticipated that the delayed release of September CPI. Inflation came in slightly below expectations, which cheered both equity and bond investors, although YoY headline inflation rose to 3.0%/annum for the first time since January 2025. Equity investors were happy since the better-than-expected read suggests the Fed will continue on its easing path, largely anticipated at the FOMC meeting this week but perhaps more important for the December and 2026 meetings. The bond market largely said “meh”, I suppose because investors are becoming accustomed to inflation remaining elevated for a longer period of time at a level well above the Fed’s target. Each read also seems to quash initial fears of tariff-induced run-away inflation. The September CPI reading, although deferred because of the government shutdown, was necessary since it is the basis for the annual social security Cost of Living Adjustment (“COLA”), which was 2.8% and announced just after the CPI data was released. Headline and core inflation for September were both 3.0% YoY; headline CPI was 0.3% MoM, and core CPI was 0.2% MoM. The BLS CPI September report is here.

S&P 500 earnings

The earnings season for the S&P 500 kicked into high gear last week, with another 172 companies expected to report earnings this coming week. According to LSEG (“This Week in Earnings”), a much higher percentage of companies that have reported their results so far have beat expectations on the top and bottom lines. Much focus this past week was on NFLX (-8.7% WoW) and TSLA (-1.3% WoW), both of which missed bottom line earnings although it never matters for TSLA.

Additional US sanctions on Russian oil giants Rosneft and Lukoil

New sanctions were imposed by the Trump Administration (see Treasury release here) on Russian oil giants Rosneft and Lukoil mid-week in an effort to ramp up the pressure on the Kremlin to come to the negotiating table in its war with Ukraine. These sanctions are intended to halt the shipments of Russian oil and gas to some of the country’s largest state customers, including India and China. Not surprisingly, oil prices rose sharply. Based on my understanding of the press release, transactions with Rosneft and Lukoil have to be wound down by November 23rd, meaning there is plenty of time either for peace negotiations or for Trump to carry on his ongoing “bromance” with Putin and defer or never enforce the tariffs. Think TACO.

Rare earths and the China

I am out of my league discussing this topic in much detail, but I can direct you to a good podcast regarding rare earths (“Rare earth quake”) on #Unhedged, which is about 20 minutes long and was released on October 16th. You can find this podcast on Spotify here. This is the topic largely responsible for the recent escalation in trade discourse between the US and China, and will be the centrepiece of the Trump-Xi discussions on the sidelines of the APEC Summit on Thursday. The graph below from #Bloomberg depicts the relevance of China (and the irrelevance of the U.S.) as far as mining and refining of rare earth minerals.

Private credit

For #FT subscribers, I found an article this week entitled “Blackstone says era of bumper private-credit returns has ended” very interesting. In the article, Blackstone’s president Jonathan Gray highlighted the downward trend in private credit returns, although noting that they still are well above returns in the public credit markets. He did not seem overly concerned in the article about overall credit deterioration, although I thought the closing comments in the article were particularly insightful as far as the environment in which we currently find ourselves. Mr Gray said: “Blackstone was seeing signs of stress among poorer consumers, evidence of a so-called K-shaped economy where wealth is growing at high income levels while economic strains are rising at the bottom. Aggregately, the economy is resilient. Where we see weakness is in Europe generally and then lower-income consumers in the US”.

Memes/Beyond Meat

Beyond Meat (BYND.O) was all over the place last week, becoming the latest meme stock jerked all around by the usual cadre of retail investors on X and reddit. I thought the graph to the right showing trading volumes was revealing of just the way investors grab on to meme stocks like BYND.O.

The graph below shows the price action since the company completed a debt exchange in September, and an article describing the activity (and containing the graph below) can be found on Reuters here.  It all feels of euphoria to me, but I keep saying the same week after week.

MARKET TABLES

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