Global Economic Trends and Local Insights

The US economy grew at a much faster pace in Q3 2025 compared to Q2. In December, Chinese authorities pledged to maintain a “proactive” fiscal stance and adopt flexible monetary policies, such as lowering banks’ reserve requirements and interest rates to bolster growth in 2026. The People’s Bank of China (PBOC), however, left interest rates unchanged during its December meeting. In the UK, GDP posted a modest increase in Q3 versus the previous quarter. Locally, South Africa’s GDP saw a slight increase, while its inflation rate declined over the same period.

Source: Graviton News

Macro Overview

Global overview

Developed market (DM) equities ended 2025 on a positive note with the MSCI World Index’s December figure at 0.81% month-on-month (m/m) in dollars. This marked a third consecutive year of strong returns for global equity investors. Emerging market (EM) stocks outperformed their DM peers in December, ending the month at 3.02% m/m in dollars. Part of the US benchmarks’ underperformance into year-end can be attributed to increasing investor anxiety about the massive amounts of spending on artificial intelligence (AI) infrastructure. The FTSE 100’s November gains continued into December, ending the month up 2.19% m/m in pound terms. The S&P 500’s December gains were 0.06% m/m, compared with November’s 0.25% m/m, both in dollars. Global bonds were still in positive territory for December at 0.26% m/m from November’s 0.23% m/m gain in dollars. Global property was in negative territory in December at -1.03% m/m from the previous month’s gains in dollars. The Euro Stoxx 50 Index gained 2.25% m/m in December from November’s 0.29% m/m gain in euros. The Dow Jones Index gained 0.92% m/m in December from November’s 0.48% m/m in dollars. From being a laggard in November, the Nikkei gained 0.27% m/m in December, in yen terms.

Local overview

The JSE delivered the strongest performance among major global equity markets in December, with the FTSE/JSE All Share Index rising 4.57% m/m in rand terms. Precious metal miners have contributed significantly to JSE returns in 2025, with gold and platinum miners responsible for much of its performance. Gains from the Resources sector continued into December at 5.72% m/m from the previous month’s 9.57% m/m. Both Property and Financials continued their gains into December, at 0.09% m/m and 7.69% m/m respectively, in rand terms. Industrials posted gains in November of 2.30% m/m which continued into December, ending at 4.39% m/m. Cash was in positive territory for the month at 0.58% m/m in rand terms. The local bond market’s gains continued into December for short-, medium-, and long-term bonds. The FTSE/JSE All Bond Index ended December positively at 2.70% m/m in rand terms. Bonds of 1-3 years were positive at 0.94% m/m, along with bonds of 3-7 years at 1.71% m/m. Bonds of 7-12 years were positive at 2.87% m/m, and bonds of 12 years and above were the biggest gainer for the month at 3.46% m/m. The rand strengthened against the US dollar at 3.36% m/m, against the euro at 2.14% m/m, and against the British pound by 1.82% m/m respectively.