Quarterly Market Commentary – December 2025
Navigating a Changing Global Landscape.
Welcome to our latest Quarterly Market Commentary from Kellands, where we take a deep dive into the state of global investment markets, economic trends, and the shifting geopolitical landscape.
As we close out 2025, it’s clear that global financial markets have made a remarkable recovery, with strong performance across a wide range of sectors. The last quarter of the year in particular saw markets surge thanks to growing demand for artificial intelligence (AI), solid corporate earnings, and an optimistic view that the US Federal Reserve might soon ease up on interest rates.
Tech and Communication Sectors Lead the Charge
Technology and communication stocks were at the forefront, pushing equity markets higher. With AI driving innovation and major companies reporting solid earnings, investor confidence soared. The Fed’s September decision to lower interest rates only added fuel to the fire, boosting market sentiment and providing fresh momentum for both developed and emerging markets. A weaker US dollar also played a critical role, helping to strengthen emerging markets by boosting export competitiveness and attracting international investment.
A Broad-Based Rally
The positive trends didn’t stop at equities. Credit markets, digital assets, and commodities like gold and silver also saw record rallies. The expectation of lower borrowing costs helped to push down yields, making higher-risk assets like corporate bonds more attractive to investors. Meanwhile, geopolitical tensions kept commodities buoyed, and cryptocurrencies continued their upward march as both speculative and institutional interest surged.
A Word of Caution
However, it’s not all smooth sailing. While market growth has been impressive, we’re still facing some significant risks. Stock valuations, particularly in the tech sector, are looking high, which means that if growth expectations fall short, markets could be vulnerable to a correction. Add in ongoing inflation pressures and geopolitical uncertainty—such as global conflicts and trade disputes—and there are still plenty of potential setbacks to keep an eye on in the months ahead. So, while optimism abounds, a careful approach will be key as we head into 2026.
Looking Back: A Tumultuous Start to Autumn
The quarter started on a challenging note. Persistent inflation and expectations of prolonged high interest rates weighed heavily on markets, leading to a difficult September and October. Risk assets took a hit, and bond yields reached multi-year highs, creating a tense atmosphere for investors.
But then came November. A shift in sentiment, fuelled by signs of slowing inflation and a more cautious approach from central banks, sparked a broad market rally. This turnaround helped many sectors recover their earlier losses, with equity and fixed-income markets both posting strong gains.
A Shifting Bond Market
The bond market also saw a significant transformation over the quarter. After yields hit their highest levels in over a decade, a sharp decline in November provided strong returns for bond investors. This shift was driven by slowing inflation and a more coordinated stance from central banks around the world. In many ways, this reversal underscored the delicate balance between inflation, central bank policy, and market sentiment.
Looking Ahead: Balancing Optimism with Caution
As we look toward 2026, the outlook is cautiously optimistic. The economic and financial landscape remains fluid, and there’s plenty of opportunity on the horizon—especially with the ongoing tech boom and the potential for lower rates. However, the risks remain significant, and navigating the coming year will require both agility and a disciplined approach.
Please feel free to read or download our latest Quarterly Market Commentary by clicking on the link below.
We’ll continue to keep you updated on all key market developments as we head into the new year. In the meantime, if you have any questions or would like to discuss your financial strategy, please don’t hesitate to get in touch.
Download Quarterly Market Commentary Dec 2025