Far from foregone

In this October 29th, 2025 edition of Liquid Real Assets (LRA) Market Update, John Vojticek and team take a look at how public markets viewed listed real assets (real estate, infrastructure, natural resources and commodities).

Click below for the full report, including our Market Commentary, Why it Matters and:

Macro Dive:

• Rates
• U.S. Indicators
• Continental Pulse

Real Assets, Real Insights:

• 2025 Housing Affordability Review (Real Estate)
• Streamlined (Infrastructure)
• All about that base (Commodities)

Market Index Returns

Week to date since October 22, 2025, as of October 29, 2025

Index definitions: Global Real Estate = FTSE EPRA/NAREIT Developed Index; Global Infrastructure = Dow Jones Brookfield Global Infrastructure Index; Natural Resource Equities = S&P Global Natural Resources Index; Commodity Futures = Bloomberg Commodity Index; TIPS = Barclays US TIPS Index; Global Equities = MSCI World Index; Real Assets Index = 30% FTSE EPRA/NAREIT Developed Index, 30% Dow Jones Brookfield Global Infrastructure Index; 15% S&P Global Natural Resources Index; 15% Bloomberg Commodity Index, 10% Barclays TIPS Index. Source: Bloomberg, DWS. Past performance is not indicative of future results. It is not possible to invest directly in an index.

Market Commentary

Fed Chair Jerome Powell spoke to investors after the Federal Open Market Committee delivered another 25 basis point (bp) cut to bring the fed funds overnight rate to 3.75% (lower bound, 4.00% for the upper bound). Powell commented that a cut in December is ‘far from’ a foregone conclusion and quipped that “what do you do when you’re driving in fog? You slow down.” He also referenced an intention to “resume” rate cuts, hinting at a possible pause in the cutting cycle. The lack of official data might cloud the economic outlook for Fed decision makers, but investors can still take cues from geopolitics and corporate earnings results. Additionally, although official government data is on hold, private sector (ADP) data showed employment contracting in the private sector during three out of the last four months. This softness is reinforced by weak survey-based readings from the Conference Board and the University of Michigan. Anecdotal readings from the Fed’s most recent Beige Book also noted labor market weakness. Yet, tracking estimates and high frequency proxies for GDP growth continue to appear to send a more sanguine message as the Atlanta Fed estimates that Q3 ended with real final sales to private domestic purchasers running above 3%. Perhaps Powell is onto something.

This week the market was also obsessing about the apparent détente between China and the U.S. and artificial intelligence (AI) spending. Hyperscalers’ earnings reports suggest they are spending roughly a quarter of revenues on capex (capital expenditures), which is depressing free cash flow. These elevated expenditures have prompted some companies to outline debt issuance plans to fund the expansion. While investors seem to remain optimistic about the AI trade, they demonstrated some consternation regarding the lack of return on investment to date. Importantly, the U.S. and China agreed to extend their trade truce and reduce other trade barriers this week. China agreed to postpone export controls for rare earth minerals and promised to purchase U.S. soybeans, while the U.S. will cut fentanyl-related tariffs and extend the pause on some reciprocal tariffs and port fees. While not a “comprehensive” deal, the temporary understanding reduces tensions and provides time for the two sides to address the competitive issues. Elsewhere, the U.S. continued its provocation of Venezuela and appears to have its sights set on diminishing China’s inroads across South America.

Real Assets lagged broader Global Equities as the Technology and Communications sectors led returns. The Real Estate, Consumer Stapes, and Healthcare sectors were the only global equity sectors to end in negative territory. Within the Real Asset Index, Natural Resource Equities led performance for the period, followed by Commodity Futures, and U.S. TIPS (Treasury Inflation Protected Securities). The Global Infrastructure and Global Real Estate sectors generated negative returns, weighing on overall performance of the Real Asset Index.*

Across other market indicators we track, the VIX, a measure of forward-looking 30-day expected stock market volatility, fell 9%, to end the period at 16.9. Breakeven yields, a measure of implied inflation, rose 2 basis points (bps) in the 5-year segment, and 1 bp in the 10-year segment. Gold prices fell 4.1% to end at $3,930/ounce. This year, the bid for safe-haven** assets and the ongoing debasement trade added support for gold and silver prices. Gold has the advantage over silver of being an increasingly popular reserve asset for central banks, while silver is primarily a consumed industrial metal. Oil prices rose 3.4% to end the period at $60.48/barrel. The U.S. dollar strengthened 0.3% against major trading partners in the period. Credit spreads tightened 5 bps for investment grade credits and 22 bps for the high yield space.*

In the full report:

Why it matters: While we have received inflation data in the U.S., we still await federal employment data, which is a key focus of the Fed and will likely drive forward rate expectations. This week we will review the latest available data from the U.S., Canada, and Europe.

Real Assets, Real Insights: This week we look at housing affordability, a proposed water utility merger, and the dynamics of the aluminum market.

Click here to read the full report.

This report is for professional/institutional investors only. To access, please validate accordingly and select "Global English" site for a smoother journey.

* Source: Bloomberg Finance LP, as of October 29, 2025

** Financial safe havens are investments or assets that are expected to retain or increase in value during times of market turbulence.

Any mentions of specific properties or securities are for illustrative purposes only and should not be considered a recommendation. Diversification neither assures a profit nor guarantees against loss. Past performance is not a guarantee of future results. The opinions and forecasts expressed are those of the authors and may not come to pass. Forecasts are based on assumptions, estimates, views and hypothetical models or analyses, which might prove inaccurate or incorrect.  Forecasts are not a reliable indicator of future returns. All investments involve risks, including potential loss of principal. Index returns do not reflect fees or expenses, and it is not possible to invest directly in an index. Companies involved in artificial intelligence and big data face intense competition, may have limited product lines, markets, financial resources and personnel. Artificial intelligence and big data companies are also subject to risks of new technologies and are heavily dependent on patents and intellectual property rights and the products of these companies may face obsolescence due to rapid technological developments. 

Glossary

One basis point (bps) equals 1/100 of a percentage point.

The Beige Book is a report published eight times per year on scheduled dates. It provides anecdotal information on current economic conditions across the 12 Federal Reserve Districts. Each Federal Reserve Bank collects this information through interviews, roundtables, and surveys with business leaders, economists, market experts, and community organizations.

The Conference Board Consumer Confidence Index measures the degree of optimism on the state of the U.S. economy among consumers. It is published by the business association called The Conference Board.

Bloomberg Commodity Index (BCOM) traces 23 commodities and reflects commodity futures price movements.

Bloomberg U.S. Treasury Inflation Notes Total Return Index includes all publicly-traded U.S. Treasury inflation-protected securities that have at least one year remaining to maturity, are rated investment grade and have $250 million or more of outstanding face value.

Capital expenditure (Capex) are funds used by a company to acquire or upgrade physical assets such as property, industrial buildings or equipment.

Credit spread is the difference between the yield (return) of two different debt instruments with the same maturity but different credit ratings.

The Dow Jones Brookfield Global Infrastructure Index measures the performance of pure-play infrastructure companies domiciled globally.

FTSE EPRA/NAREIT Developed Index represents general trends in global real estate equities.

Earnings refer to a company’s net income or profit over a specific period, typically reported quarterly or annually. They represent the amount a company makes after subtracting expenses, taxes, and costs from its total revenue. (Bloomberg)

The U.S. Federal Reserve, often referred to as "the Fed," is the central bank of the United States.

The Federal Open Market Committee (FOMC) is the committee that oversees the open-market operations (purchases and sales of securities that are intended to steer interest rates and market liquidity) of the U.S. Federal Reserve.

High-yield bonds are issued by below-investment-grade-rated issuers and usually offer a relatively high yield.

Hyperscalers are large cloud service providers, which can provide services such as computing and storage at enterprise scale.

Inflation is the rate at which the general level of prices for goods and services is rising and, subsequently, purchasing power is falling.

Inflation breakeven yield (or breakeven inflation rate) is the difference in yield between a nominal Treasury bond and a Treasury Inflation-Protected Security (TIPS) of the same maturity. This spread reflects the market’s expectation of future inflation over the life of the bond. (Bloomberg)  

Investment grade (IG) refers to a credit rating from a rating agency that indicates that a bond has a relatively low risk of default.

The Nasdaq Composite Index is an equity index which contains all common stocks listed on the NASDAQ exchange. 

The MSCI World Index tracks the performance of mid- and large-cap stocks in 23 developed countries around the world.

A nominal value in economics is not adjusted for inflation; a real value is.

The Nasdaq Composite Index is an equity index which contains all common stocks listed on the NASDAQ exchange. 

A Real Estate Investment Trust (REIT) is a company that owns and, in most cases, operates income-producing real estate. REITs sell like a stock on the major exchanges and invest in real estate directly, either through properties or mortgages.

The S&P 500 is an index that includes 500 leading U.S. companies capturing approximately 80% coverage of available U.S. market capitalization.

S&P Global Natural Resources Index includes 90 of the largest publicly-traded companies in natural resources and commodities businesses that meet specific investability requirements, offering investors diversified and investable equity exposure across 3 primary commodity-related sectors: agribusiness, energy and metals/mining.

Supplemental Nutrition Assistance Program is a U.S. domestic food and nutrition assistance program, designed to help low-income households afford nutritious food.

The spread is the difference between the quoted rates of return on two different investments, usually of different credit quality.

A tariff is a tax imposed by one country on the goods and services imported from another country.

Treasuries are fixed-interest U.S. government debt securities with different maturities: Treasury bills (1 year maximum), Treasury notes (2 to 10 years), Treasury bonds (20 to 30 years) and Treasury Inflation Protected Securities (TIPS) (5, 10 and 30 years).

Treasury Inflation-Protected securities (TIPS) are a form of U.S. Treasury bonds designed to protect investors against inflation. These bonds are indexed to inflation and pay investors a fixed interest rate as the bond's par value adjusts with the inflation rate.

The University of Michigan Inflation Expectations Survey of Consumers presents U.S. consumers’ median expected price changes for the next 5 to 10 years.

The VIX (CBOE Volatility Index) is a trademarked ticker symbol for the Chicago Board Options Exchange Market Volatility Index. It is a popular measure of the volatility of the S&P 500 as implied in the short-term option prices on the index.

Yield is the income return on an investment referring to the interest or dividends received from a security and is usually expressed annually as a percentage based on the investment's cost, its current market value or its face value.

A yield curve shows the annualized yields of fixed-income securities across different contract periods as a curve. When it is inverted, bonds with longer maturities have lower yields than those with shorter maturities.

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