Silver Soars To Record High As November Ends With S&P's Best Tnxgiving Week Since Lehman

November was a wild month, wildly swinging from seasonal optimism to growth scares and AI bubble blow-ups and back to Fed/Treasury-Put-driven confidence.

US stocks are trading moderately higher Friday, significantly higher on the week, and on pace for a remarkably flat performance for the month on the back of a ~3.5% gain this week as investors have been digesting oscillating sentiment around the next Fed rate cut (its back on apparently), a closed then re-opened federal government, a very constructive 3Q25 corporate earnings season, and continued evaluation of just where we are in the AI revolution trading (and fundamental) cycle.

November started with a number of reasons for optimism: 

a) the Federal Reserve was on a clear cutting cycle into decent growth

b) the macro backdrop was likely to improve into 2026 on the back of the tax refunds and potential new FOMC composition in May

c) forecast EPS for 2026 from our clients was in the 300-310 range, and

d) the Nov / Dec seasonal that is historically good has generally only been furthered in the years where SPX is up at least 15% by the end of October. 

And then The Fed decided to FAFO with its forward guidance (swinging the market's expectations of a Dec rate-cut from 90% to 25% and then back up to 85%)...

Source: Bloomberg

The government shutdown (and subsequent slump in soft survey data) also did not help overall sentiment...

...sparking chaotic swings across all asset classes. 

Bloomberg's Michael Ball notes that S&P 500 intraday swings have receded as volatility dropped and option pricing calmed into the Thanksgiving holiday, but downside risks remain and the setup could get less stable as trading returns to full force next week.

Dip buyers stepped in and turned early November’s pullback into a notable rebound. The S&P 500 regained ground as breadth improved, with money rotating out of crowded mega-cap tech and AI momentum winners into value and small caps as expectations grew for a December interest-rate cut by the Federal Reserve. 

Volatility has reset fast. The VIX is down from a high of around 28 last week to around 17.5, while correlation gauges have moved back to more normal levels. Research by MenthorQ highlights SPX implied volatility sit about 1.2 percentage points below realized vol, near the bottom of its three-month range. The combination of lower index vol and correlation points to calmer conditions and an ongoing rebound as hedging pressure eases.

November saw Nasdaq's first losing month since March, S&P bounced back from ugly losses mid-month to almost breakeven on the month. Trannies outperformed...

But, it was the S&P's best Thanksgiving week since 2008...

Source: Bloomberg

And as we also peel back the onion of S&P 500 performance, Goldman's Chris Hussey notes a few interesting things fall out.

• First, the Mag-7 trade appears to have stalled out, or is at least maturing. On the one hand, shares of GOOGL and NVDA are up 68% and 32% ytd, respectively. But on the other hand, AAPL, META, AMZN, and TSLA are all lagging the S&P 500 ytd (and MSFT is only just matching the index's performance). And looking nearer term we see even a further transition occurring as GOOGL is outperforming NVDA in November by 25 percentage points in November alone as investors continue to scrutinize the competitive environment emerging in the AI trade.

• But market concentration is broadening more than waning. While many of the Mag-7 stocks are struggling to keep up with the S&P 500 this year, a flurry of very large market cap stocks are picking up the slack and simply broadening the market concentration that US stock markets have been experiencing for years now. AVGO -- a market leader in the custom semiconductor market -- is up 72% ytd and is now the 6th largest stock in the S&P 500. LLY is continuing its GLP-1 market dominance and up another 39% ytd (now the 10th largest stock in the index). WMT, JPM, and diversified Healthcare giant JNJ are also up sharply ytd (22%, 31%, and 42%, respectively) further highlighting how the Tech trade is broadening out to sector-dominating companies in Retail, Banking and Healthcare.

Perhaps the most notable aspect of November was the AI rotation - as the "everyone's a winner" narrative broke and the GOOGL/NVDA/OPENAI divide gaped wide open...

Source: Bloomberg

Mag7 stocks significantly underperformed the S&P 493...

Source: Bloomberg

NVDA was the Mag7's biggest loser down a shocking 13% or so on the month (its worst month since Dec 2022). GOOGL wad dominant to the upside...

Source: Bloomberg

Momentum suffered its worst month since Jan 2023...

Source: Bloomberg

Goldman notes that we have rallied back into a pocket of positive gamma. We think dealers are long +$6.5bn of gamma here… the three day increase is the second largest in the 3+ years… all else equal, we should see realized vol start to subside and liquidity improve. On that note S&P 500 top of book depth currently at $9mm vs ytd avg of $11.5mm (remember this dipped below $3mm last week).

Source: Goldman Sachs

Credit markets had a wild ride (along with equity risk), erasing all the month's fears by the early close today...

Source: Goldman Sachs

Treasuries were bid in November with the short-end/belly of the curve outperforming. Weakness today pushed the long-end yields higher on the month...

Source: Bloomberg

With the 10Y finding support at 4.00% once again...

Source: Bloomberg

...and November seeing a sizable steepening of the yield curve overall...

Source: Bloomberg

Crude prices fell for the 4th straight month, with WTI back below $60 (but are bouncing back towards the upper end of their recent channel)...

Source: Bloomberg

The dollar chopped around on the month (ending basically unchanged) but holding at the upper-end of its 7 month range...

Source: Bloomberg

Gold rallied for the 4th straight month, managing to get back up to $4200 after some intra-month turmoil...

Source: Bloomberg

Silver soared to a new record high as demand in China accelerated (and inventories dwindled). This is the seventh straight monthly gain for the white metal...

Source: Bloomberg

Inventories in warehouses linked to the Shanghai Futures Exchange recently hit the lowest level since 2015, while Shanghai Gold Exchange volumes are back to the smallest in more than nine years, according to bourse and brokerage data.

“The tightness stems from rising exports to London,” said Zijie Wu, an analyst at Jinrui Futures Co., who also cited industrial and fabrication demand. 

Reflecting the tightness in China, near-term silver prices have topped later-dated contracts in Shanghai, a pattern known as backwardation that signals short-term pressure. Given the low inventories and so-called inelastic — or sticky — supply, concerns remain elevated , according to Jinrui Futures’ Wu.

For now, traders can put some hope in China’s off-exchange stockpiles, according to Ghali.

“Quite possibly, the backwardation will drive inventories back to the exchange,” he said.

“It remains unclear how much of the invisible inventory there is in China. By many accounts, it is likely quite large.”

The significant outperformance of Silver over Gold pushed the ratio down to 76x (near critical support)...

Source: Bloomberg

While silver beat gold, gold beat bitcoin, battering the BTC/Gold pair to its worst monthly performance since Nov 2022 and lowest level since Jan 2024...

Source: Bloomberg

Bitcoin suffered its biggest monthly loss since June 2022, testing down to $80,000 before bouncing back this week...

Source: Bloomberg

Ethereum also sold off in November, down over 21% (and down for the 3rd straight month), managing to scramble back above $3000 for now...

Source: Bloomberg

Finally, while the mainstream is discussing the so-called 'K-shaped' economy (as stocks soar and sentiment slumps)...

Source: Bloomberg

November saw a 'change' with sentiment rebounding strongly...

Source: Bloomberg

Did The Fed's sudden dovish re-pivot save the day and set the scene for December's seasonal outperformance?

Source: Bloomberg

As Goldman's Chris Hussey concludes, the information flow that investors have been having to digest has been on the one hand very heavy, yet at the same time not particularly incremental.

Let's review:

• Corporate earnings -- a lot to evaluate, but no change in direction. 3Q earnings season wrapped up in November and while investors had to position around a raft of results from PLTR to NVDA to WMT and so much more, there were relatively few surprises. NVDA delivered on high expectations, and WMT posted same-store sales up 4.5%. And overall, Ben Snider and team described the 3Q25 earnings season as very strong.

• The Fed is on pace to cut rates again. We went into November on the back of a Fed funds rate cut, but then investor confidence in another rate cut waned as the government reopened and the S&P 500 dipped mid-month to ~6500 alongside a decline in the likelihood that the Fed will cut rates in December to below 30%. But as we leg out of November, bond markets are embedding a better than 80% chance of a rate cut again as investors have evaluated the latest jobs and payrolls data -- including a delayed September Payrolls report which showed an increase in the unemployment rate to 4.4%. Business sentiment indicators -- the Philly Fed, Richmond Fed, and Chicago PMI -- also point to flagging confidence in the economy, suggesting that a Fed funds rate cut may serve more than just a 'normalization' function but can also act as the stimulus this economy may need. Indeed, Jan Hatzius writes that the September jobs report may have sealed a 25bp cut at the Dec 9-10 FOMC meeting. And with the next jobs report now scheduled for Dec-16 and CPI for Dec-18, there is little on the calendar to derail a cut on Dec-10.

• The AI trade is still solid. Alongside the strong bottom-line 3Q25 earnings season, we also got another wave of hyperscaler capex growth. Looking ahead competitive intensity around the scaling of AI foundational models across public and private companies is likely to be a point of investor scrutiny. Focus on: the rate of AI spend (for both hyperscalers and those developing AI tools), how viable the return profile of that spend is, and what's the scope for scaled AI app monetization.

We remind investors that not all Fed rate cutting regimes coincide with strong stock markets... If the US dips into recession, even when the Fed is cutting rates, historically, markets have gone down quite a bit...

The bottom line (via GS): The factor shakeout, the reset in Mag 7 positioning, the breadth improvement, the cooling in vol panic, the systematic de-risking already absorbed, and the early signs of real AI-driven productivity – all leave us heading into December with a cleaner starting point than we had a few weeks ago.