Disclosure: This article is posted to inform readers and not to provide financial advice.
What is an Economic Review?
An economic review provides a quarterly snapshot of global and local markets, highlighting major trends, risks, and opportunities that influence investment performance. This review looks at July to September 2025, covering developments in inflation, interest rates, trade policy, and market performance worldwide and here in South Africa.
Global and Local Markets in Summary
The third quarter of 2025 was marked by strong equity performance across the globe.
Markets continued to climb, supported by the U.S.-China trade truce, the Federal Reserve’s 25-basis point rate cut, and renewed AI optimism following record spending by tech giants like OpenAI, Nvidia, and AMD.
The U.S. S&P 500 rose 8.1%, while the Nasdaq gained 11.4% — their strongest quarter in years. European and Asian markets followed suit, with Japan’s Nikkei and Hong Kong’s Hang Seng both up more than 10%. The U.S. Federal Appeals Court ruling that President Trump’s emergency tariffs were illegal added optimism, though tariffs remain in place pending a Supreme Court decision.
South Africa outperformed most developed markets, with the FTSE/JSE All Share Index gaining 12.9% in Q3, supported by an exceptional rally in resource stocks.
Bond markets also delivered standout returns as yields declined sharply on expectations of a lower inflation target from the South African Reserve Bank (SARB).
Markets continued to climb, supported by the U.S.-China trade truce, the Federal Reserve’s 25-basis point rate cut, and renewed AI optimism following record spending by tech giants like OpenAI, Nvidia, and AMD.
The U.S. S&P 500 rose 8.1%, while the Nasdaq gained 11.4% — their strongest quarter in years. European and Asian markets followed suit, with Japan’s Nikkei and Hong Kong’s Hang Seng both up more than 10%. The U.S. Federal Appeals Court ruling that President Trump’s emergency tariffs were illegal added optimism, though tariffs remain in place pending a Supreme Court decision.
South Africa outperformed most developed markets, with the FTSE/JSE All Share Index gaining 12.9% in Q3, supported by an exceptional rally in resource stocks.
Bond markets also delivered standout returns as yields declined sharply on expectations of a lower inflation target from the South African Reserve Bank (SARB).
Global Economic Overview
Interest Rates and Inflation Trends:
The Federal Reserve’s decision to lower rates to a 4.00–4.25% range boosted valuations and sentiment, while investors priced in a further 100 basis points of cuts over the next year.
Inflation remains elevated but is showing signs of easing, particularly in the U.S., where services and housing costs are expected to moderate. In Europe, inflation is steady at around 2%, while in the U.K. it remains higher at 3.8%. Emerging markets, including China, benefited from a weaker U.S. dollar, easing financial conditions and supporting export-driven growth.
Inflation remains elevated but is showing signs of easing, particularly in the U.S., where services and housing costs are expected to moderate. In Europe, inflation is steady at around 2%, while in the U.K. it remains higher at 3.8%. Emerging markets, including China, benefited from a weaker U.S. dollar, easing financial conditions and supporting export-driven growth.
Growth Prospects and Trade Developments:
The global economy expanded by an estimated 3.2% in the first half of 2025, supported by trade front-loading and strong emerging market industrial output. AI-driven capital expenditure continued to be a major driver of growth, with data centre and infrastructure investment reaching record levels.
However, geopolitical risks remain. In October, the U.S. threatened to impose a 100% tariff increase on Chinese imports in response to China’s restrictions on rare earth exports – a reminder that trade tensions could quickly re-emerge.
However, geopolitical risks remain. In October, the U.S. threatened to impose a 100% tariff increase on Chinese imports in response to China’s restrictions on rare earth exports – a reminder that trade tensions could quickly re-emerge.
Market Performance: Equities, Bonds, and Commodities
Global Equities:
Equities rallied across all major regions, with emerging markets outperforming developed peers. The MSCI Emerging Markets Index gained 7.0%, led by China, South Korea, and Latin America, compared to a 3.1% rise in developed markets.
AI-related stocks and technology infrastructure continued to drive performance, though valuations remain stretched.
AI-related stocks and technology infrastructure continued to drive performance, though valuations remain stretched.
Bonds:
Bond markets strengthened as yields declined. Long-term maturities outperformed as investors sought duration exposure amid expectations of looser global monetary policy.
Commodities:
Gold surged nearly 17% during the quarter – its strongest run since 1979 – as investors sought safe-haven assets amid political uncertainty and lofty equity valuations.
Local Market Overview: South Africa
South African equities rose 6.6% in September alone, outperforming global peers, with the Resources sector surging 28.1%, its best month in nearly two decades.
Top performers included Impala Platinum (+40.2%), Northam (+43.6%), and Sibanye (+45.3%).
Financials (-1.9%) lagged, while Industrials (+1.3%) benefited from Naspers (+7.0%) and Prosus (+11.8%).
The All Bond Index gained 3.3% for the month, supported by strong foreign inflows, lower yields, and expectations of stable inflation, which eased to 3.3% in August.
In a major turnaround, Eskom reported its first annual profit in eight years, posting R16 billion and cutting loadshedding days to just 13 for the year.
Top performers included Impala Platinum (+40.2%), Northam (+43.6%), and Sibanye (+45.3%).
Financials (-1.9%) lagged, while Industrials (+1.3%) benefited from Naspers (+7.0%) and Prosus (+11.8%).
The All Bond Index gained 3.3% for the month, supported by strong foreign inflows, lower yields, and expectations of stable inflation, which eased to 3.3% in August.
In a major turnaround, Eskom reported its first annual profit in eight years, posting R16 billion and cutting loadshedding days to just 13 for the year.
Conclusion
Q3 2025 highlighted the resilience of both global and South African markets amid ongoing policy uncertainty.
With AI investment, moderating inflation, and expected rate cuts driving momentum, the global outlook remains constructive heading into Q4.
For South African investors, strong resource earnings, attractive bond yields, and stabilising inflation continue to provide opportunity, even in a complex environment.
At TVC Wealth and Health Managers, we remain focused on helping clients navigate uncertainty with clarity and confidence, ensuring your wealth strategy adapts to changing markets.
Stay informed. Stay invested.
Speak to your TVC advisor to review your financial strategy for the months ahead.
With AI investment, moderating inflation, and expected rate cuts driving momentum, the global outlook remains constructive heading into Q4.
For South African investors, strong resource earnings, attractive bond yields, and stabilising inflation continue to provide opportunity, even in a complex environment.
At TVC Wealth and Health Managers, we remain focused on helping clients navigate uncertainty with clarity and confidence, ensuring your wealth strategy adapts to changing markets.
Stay informed. Stay invested.
Speak to your TVC advisor to review your financial strategy for the months ahead.
Sources
https://flagshipsa.com/wp-content/uploads/2025/10/Telescope-Q3-2025.final_.pdf
https://online.fliphtml5.com/ertrw/qyrs/#p=1
https://online.fliphtml5.com/ertrw/qyrs/#p=1
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