Equities were mixed overnight as markets shifted into wait-and-see mode ahead of next week’s Federal Reserve interest rate decision.

The S&P 500 inched up 0.11%, while the Nasdaq gained 0.22%. The Dow Jones, however, edged slightly lower, dipping 0.07%. Overall, investors appear cautious but constructive as they position portfolios for the Fed’s final policy call of the year.

Commentary from Industry Leaders

Earlier this week I had the pleasure of attending AIPX’s Year-End Webinar. The presenters during the webinar were: 

• Andrew Fishman, President, Schonfeld Strategic Advisors (Multi-Strat, Multi-Manager Hedge Fund)

• Luke Taylor, President, Stonepeak (Global Infrastructure)

• Tom Hennigan, COO / Chief Risk Officer, Carlyle Credit Solutions / US Direct Lending (Private Credit / US Direct Lending) 

Please see below for a short recap of the key themes from each manager, please feel free to reply back if you would like a more detailed summary of their remarks.

Executive Summary - 2025 review and key themes heading into 2026

• Volatility and dispersion are back – and a tailwind for active, multi-strategy platforms.

  • Schonfeld highlighted that 2025 has been characterised not just by higher volatility, but by an increase in “volatility of volatility” – the speed and magnitude with which markets can switch direction.  For investors, that means:

    • Short, sharp moves around data releases, central bank meetings, policy headlines and US President remarks;

    • Wider performance gaps between regions, sectors and styles; and

    • A richer opportunity set for managers who can adjust positioning quickly across many different books, rather than being locked into a single style or theme.

  • This has been supportive for Schonfeld’s diversified platform, with all four core verticals positive for the year and every sub-strategy contributing.

• Infrastructure is in one of its best investing environments in years.

  • Stonepeak emphasised a powerful confluence of themes – digitalisation, decarbonisation, and supply chain realignment – driving sustained capital needs across infrastructure.

  • Against a backdrop of higher rates and US policy noise (tariffs and changes to the Inflation Reduction Act), Stonepeak is seeing some of the most attractive entry valuations and return profiles in years, particularly in renewables and logistics.

• Private credit remains a core income engine – with quality, structure, and documentation as key differentiators.

  • Carlyle noted that while spreads have tightened and terms have become more borrower-friendly, they continue to focus on the core US middle market with first-lien, senior-secured exposure and ~60% equity cushions beneath them in the capital structure.

  • Drawing on the broader Carlyle platform, they aim to maintain low non-accruals and stable, high single-digit to low double-digit total returns as base rates normalise.

Economic News 

Investors digested new data indicating that announced layoffs in November pushed total job cuts for the year past the one-million mark. Corporate restructuring, the growing adoption of artificial intelligence and tariff-related pressures all contributed to workforce reductions. A softer labour market typically strengthens the case for rate cuts.

That said, the broader employment picture isn’t showing signs of severe weakness. The latest weekly jobless claims came in at their lowest level since September 2022. For the week ending Nov. 29, initial claims fell to a seasonally adjusted 191,000 - a drop of 27,000 from the previous week and well below expectations of 220,000.

Meanwhile, Wall Street remains confident the Federal Reserve will deliver a 25-basis-point cut at its final meeting of the year on Dec. 10. Market pricing now reflects an 87% probability of a cut next Wednesday, a notable jump from just a few weeks ago, according to CME’s FedWatch tool.

Market Snapshot 

• Australia: ASX slightly higher today, aiming for a second consecutive weekly gain.

• United States: Dow -0.07%, S&P 500 0.11%, Nasdaq 0.22%. 

• Bonds: US 10-year yield at 4.10% and Australian 10-year yield at 4.70%.  

• Gold: Increased overnight.

Key Events Coming Up

• Tuesday 9th, December: RBA Interest Rate Decision 

• Wednesday 10th, December: Core CPI Figures (US)

• Wednesday 10th, December: US Fed Interest Rate Decision

Investment Update

I will add some more detailed notes from Andrew Fishman’s presentation on Wednesday. 

Andrew Fishman provided an update on Schonfeld and the firm’s performance across 2025. Schonfeld now manages over US$17 billion, with approximately US$13 billion in its flagship Schonfeld Strategic Partners Fund, which integrates the firm’s main trading verticals into one diversified fund.

For the year to date, SSA is up close to 10%, with performance well balanced across the platform:

• Tactical Trading (event-driven, merger arb, capital markets, index rebalance, volatility, delta-one, EM trading) was the primary driver.

• Long/short equity delivered strong results, led by APAC and the Americas.

• Discretionary Macro & Fixed Income produced a very high Sharpe (close to 4), across directional macro, fixed income RV and credit.

• Quant was the relative laggard after a mid-year drawdown but recovered meaningfully in October–November and remains profitable, aided by a strong year in systematic macro.

Importantly, every strategy and every sub-strategy is positive for the year.

Why “volatility of volatility” matters for Schonfeld

Andrew spent time on the current market regime, which he described as one where:

• Headline volatility has risen.

• “Volatility of volatility” has increased – markets move between calm and stressed regimes more quickly.

• Dispersion across instruments, countries and asset classes is high, driven by differing growth, inflation, and policy paths.

For a platform like Schonfeld, that environment is attractive because:

• Short-horizon strategies (tactical trading, certain quant signals) can monetise frequent short-term dislocations.

• Medium- and longer-horizon fundamental strategies have more idiosyncratic winners and losers to work with, rather than everything moving together.

• The firm can shift risk between verticals (for example, leaning more into macro and tactical when those opportunities are rich, while dialling quant or long/short up or down as conditions change).

With 131 PMs and a long track record of retaining senior risk-takers, the platform is built for this type of environment.

Talent, new offices and nimbleness vs. peers

Andrew also highlighted a number of strategic hires and growth initiatives:

• Senior management depth: addition of Andrew Phillipp from Citadel (CFO of both Citadel and Citadel Securities, and ex-Goldman partner) and Michael Grad from BlueCrest (and previously Millennium) to further strengthen leadership and the PM recruitment engine.

• Macro and delta-one build-out: the macro business has become a meaningful, consistently profitable pillar over the last four years, and the firm continues to invest in delta-one and emerging markets trading.

• Latin America expansion: the opening of a São Paulo office under Andre Laport, a 31-year EM veteran and former Goldman partner.  Schonfeld expects to be the first international multi-manager to trade locally in Brazil.

Andrew contrasted Schonfeld’s ability to scale “niche but rich” markets with the largest global peers:

• For a firm of Schonfeld’s size, Brazil and broader Latin America can materially impact performance.

• For platforms that are five times larger, it is harder to justify the same build-out because even a successful Latin America book may not move the needle at the firm level.

Schonfeld believes this nimbleness – the ability to enter and scale “niche but rich” markets like Brazil and Latin America in a way that is meaningful, but still risk-controlled – is an important competitive advantage going into a more volatile, dispersed market regime.