Market Report.
The data released yesterday by the UK economy was not worse than expected, but that does not mean they were good.
🇬🇧 UK real GDP grew just 0.1% quarter‑on‑quarter in Q3 2025, a clear slowdown from 0.3% in Q2 and 0.2% in Q3, consistent with an economy that is basically stagnating rather than entering a strong recovery. Year‑on‑year, output was 1.3% higher, but the underlying picture is weak domestic demand, squeezed households, and sector‑specific shocks rather than broad‑based strength.
🛒 UK retail sales slipped 0.1% month‑on‑month in November, but were up 0.6% year‑on‑year, pointing to weak short‑term momentum despite modest annual growth.
🇺🇸 Today’s U.S. releases include the Q3 GDP (3rd estimate) — expected 3.2% and potentially a significant revision to growth; Core Durable Goods Orders for October — a key gauge of business investment; and the Core PCE Price Index (YoY, October) — the Fed’s preferred inflation measure, expected 2.8% and capable of shifting rate expectations if it surprises.
📆 We are approaching the end of an interesting year, and we are still seeing spectacular movements in some markets, such as gold futures.
🥇 Gold prices have reached a new record high, extending gains due to heightened geopolitical tensions and expectations of further U.S. interest rate cuts. Despite President Trump’s aggressive trade policies, global stock markets have continued their rally, with the MSCI World Index gaining over 20%.
📈 Other notable market moves include a surge in European defense stocks, a rebound in European bank stocks, and a surge in South Korean and defaulted Venezuelan bond prices. The U.S. dollar has declined nearly 10%, while emerging market currencies have seen a broad-based recovery.
⚠️ The potential risks going into 2026, including the possibility of central banks running out of room for easy monetary policies and the ongoing uncertainties around AI technology.
🏛️ President Donald Trump has moved quickly in his second term, signing over 140 executive orders in his first 100 days that touched on a wide range of issues from energy to cryptocurrency. These policy changes are actively steering the flow of hundreds of billions, if not trillions, of dollars in capital across several key sectors.
🏦 Banking: Regulators are relaxing the Enhanced Supplementary Leverage Ratio, freeing up hundreds of billions in capital for major banks to invest in Treasuries and other government-backed assets.
🏠 Home Loans: Plans are being considered to release Fannie Mae and Freddie Mac from government control, which could raise mortgage rates and impact the $30 trillion mortgage market.
💱 Crypto: The “GENIUS Act” has paved the way for rapid growth of the stablecoin market, potentially reaching $4 trillion by 2030 and boosting demand for short-term Treasuries.
⚡ Energy: Policies are favoring fossil fuels over renewables, leading to the cancellation or delay of nearly $29 billion in clean energy projects.
🌍 The effects could be far-reaching, potentially reshaping the financial landscape across banking, housing, crypto, energy, and retirement savings over the coming years.
📊 In the meantime, we still have today’s GDP revision data. The U.S. economy likely grew at a brisk 3.3% annualized rate in the third quarter, driven by solid consumer spending and business investment, particularly in AI and cloud computing. The data is now outdated due to the 43-day government shutdown.
📉 The trade deficit also shrank, providing a boost to GDP growth. Inflation is expected to have accelerated last quarter, with the PCE price index forecast to have increased at a 2.8% rate.
🇨🇳 And what about the other big economy in the world? Bloomberg publishes something interesting about it: According to the Rhodium Group think tank, China’s economy is estimated to have grown by just 2.5% to 3% in 2025, roughly half the pace implied by official data.
🏗️ This shortfall is driven by a collapse in fixed-asset investment in the second half of the year, with fixed-asset investment falling 2.6% in the January-November period, led by a 15.9% drop in property investment.
📉 While Chinese policymakers are expected to announce that the country met its full-year growth target of “around 5%” when they unveil the next five-year plan, the Rhodium Group estimates there will be around half a trillion dollars in lost demand unaccounted for.
🤔 This discrepancy could cloud Beijing’s ability to accurately gauge the urgency of actions needed to avert a severe economic slowdown, or assess its negotiating position in trade talks with the U.S.
🔮 In 2026, the Chinese economy is projected to grow between just 1% and 2.5%, far below the IMF’s forecast of 4.5% for that year.
🧠 The trade war between China and the US is also receiving attention in the corporate world. Megaspeed International, a Singapore-based AI firm, has emerged as the single largest Southeast Asian buyer of Nvidia chips in less than three years. This rapid growth has made Megaspeed a focal point in Washington’s concerns about semiconductor smuggling into China.
💻 Megaspeed started as a spinoff of a Chinese gaming enterprise, but has quickly become a major player in the lucrative AI cloud computing market. This rise of a regional AI champion from Southeast Asia is drawing unusual attention in an industry dominated by global titans.
🔐 However, Megaspeed’s rapid chip purchases from Nvidia have raised national security concerns in the U.S. about potential semiconductor diversion to China, despite Nvidia’s assurances that chip diversion is not occurring.
💊 And finally, good news for a great company that has had a hard time in 2025. Novo Nordisk has won U.S. approval to sell a pill version of its blockbuster obesity drug Wegovy, a key move to protect market share against rival Eli Lilly. The company said it will begin selling the pill in early January in the U.S.
Geopolitics.
🇮🇱 Israeli Prime Minister Benjamin Netanyahu is planning to ask President Trump to support another military attack on Iran. Netanyahu is expected to make this request during his upcoming visit to the U.S. in early 2026.
⚔️ The article states that Netanyahu believes the time is right for such an attack, as he feels the U.S. is more willing to take action against Iran under the Trump administration. This proposed attack would be Israel’s third military strike on Iran in the past decade.
☢️ Netanyahu’s rationale is that Iran poses an existential threat to Israel and that decisive action is needed to set back Iran’s nuclear program and regional influence.
Market View.
📈 US futures are moving higher. Mini S&P 500 futures have reached monthly highs and are now heading towards all‑time highs, breaking above 6,925 points. Nasdaq 100 futures are following a similar path but remain slightly lagging, holding below 25,700 points.
💵 The US Dollar Index (DXY) has fallen back to the 98 level, allowing EUR/USD to extend its gains to around 1.1780.
🇪🇺 In Europe, a mild sense of optimism persists, although markets are not pushing higher. DAX 40 futures trade above 24,450 points, while Euro Stoxx 50 futures hold above 5,750 points.
🛢️ In the crude oil market, geopolitical tensions continue to fuel upside moves. Spot Brent reached $62 during yesterday’s session before easing back to around $61.50.
✨ The gold market is also seeing strong momentum, with futures posting fresh record highs above $4,500 per ounce.
₿ Bitcoin continues to struggle with downside pressure. Yesterday it briefly moved above $90,000, but has since fallen back below $88,000, currently trading near $87,500.
