Markets:

November was a positive month for our funds thanks to the contribution of our hedging strategy. Altex Growth benefited from the momentum of medium-sized companies, and was up +2.27%; Altex Momentum took advantage of the revaluation of gold mining companies in the High Book Return block and ended the month up +1.64%; Altex Quality remained positive, +0.04%; and Altex Tactical was the only one to fall, hurt by the volatility peaks, -1.26%.

The indices closed November flat or negative: the MSCI World, S&P500, DJ Industrial, and Eurostoxx 50 returned from 0.34% to 0.11%, while the Nasdaq 100 fell to -1.64%. The USD fell 0.5% vs. EUR.

The US government’s operational paralysis finally ended when Republicans and Democrats reached an agreement to unblock the federal budget. Numerous macroeconomic data from agencies dependent on the public budget were delayed (inflation, employment, etc.).

The US Federal Reserve continued to work, although it had little visibility on the direction of the development of the economy and prices.

The private sector, on the other hand, continued business as usual, November being the high season for corporate earnings announcements. Earnings growth surprised markets positively, consolidating previously anticipated gains. There was greater profit-taking in the AI and technology sectors, amid doubts about the short-term profitability of the huge investments that the “Magnificent” have been committing to for the coming years. Semiconductors, technology, telecommunications, and artificial intelligence closed the month down between -3% and -10%. On the upside, gold mining rose +15.5%, healthcare +9.0%, oil & gas +5.6%, and regional banking +4.98%.

Markets rallied over the month: initial doubts lost momentum while expectations of interest rate cuts and greater monetary expansion by the Fed were fueled. In the last 10 days of the month, markets rebounded after accumulating falls until the 20th.

Bonds rallied briefly, with 10-year US bond yields falling below 4%. However, the fluctuation range between 4% and 4.20% appears to be stable.

In Europe, October inflation data (2.1%) was in line with expectations. It is anticipated that the ECB will make no changes, and that the fiscal and monetary expansionary tone in the eurozone will continue. The peace negotiations for Ukraine and the French sovereign debt –which is already trading at a higher risk than Italian debt and even Greek debt– are in the spotlight.

Outlook:

The positive earnings announcement season consolidated markets and risk assets, in general, except for cryptocurrencies, which continued the correction that started in October.

In the current scenario of inflation and corporate earnings growth, it is expected that the S&P 500 will grow by 14% in 2026, and that central banks will maintain a moderately accommodative stance. At its meeting on December 10, the Fed lowered interest rates to 3.75% (a so-called neutral area, with inflation close to 3%). Powell announced the reactivation of US Treasury bond repurchases to inject liquidity into markets and reduce interbank market tensions.

All of this is positive for high-yield assets and precious metals. According to most quantitative studies, the outlook for 2026 is positive.

However, possible risks, such as the change in the Federal Reserve chairmanship (Powell’s term ends in May) must be closely monitored. Trump currently favors a very expansionary candidate to succeed Powell, who -if nominated- could trigger the risk of higher inflation. On the domestic policy front, Trump will face midterm elections in November, and he will probably have to make concessions over the next few months to ensure support among his colleague Republicans, who will have their own seats to think about too. In addition, a new candidate aspiring to succeed Trump in 2028, also seeking support, may appear during 2026.

In geopolitics, it does not appear that conclusive solutions will be easily reached for the most serious conflicts disrupting world order. Ukraine and Russia continue to drag out negotiations, while the US and Europe do not seem to be in any rush to end the conflict, almost four years after the invasion. Tensions in the Middle East, and the war between Israel and Hamas supporters, also show no signs of an early resolution: positions seem too far apart to expect a lasting agreement to be signed in 2026.

Finally, a note on tariffs: The total effective tariffs borne by US importers have risen from 2% to over 10% on average (almost 40% in the case of Chinese products). Although this figure is manageable, it does not favor economic growth. Companies are facing higher taxes and an increasingly demanding competitive environment with the emergence of AI in the value chain. It this scenario, the differences between winners and losers will be big. Active management will be key to maximizing the opportunities offered by markets.

At Altex, we will continue to execute our strategies with discipline and rigor. This year, our equity strategies, as well as our index (DIPS) and USD hedges, contributed positively. Altex Tactical also seems to have started an upward trend that should consolidate during 2026. The outlook is good for our Momentum, Quality, and Growth factors. This year, the strategies proved to be very robust during the worst moments of the crisis, and even more so during the subsequent recovery period. Good fundamentals and trends have once again been key factors in building profitable portfolios.

Happy end of 2025, and may 2026 continue to reward effort and consistency in the management of your investments. We wish you every success in your personal and business projects for the coming year.

Warm regards from your team at Altex Asset Management.