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MARKET ROUNDUP | WHAT’S IN A MEETING OR TWO … ARE WE TO BE TRICKED, OR TREATED??
Andrew Mobsby, Head of Product Structuring
Corporate earnings reports fuelled high market volatility this week, causing sharp upward and downward movements. Day to day, we went up and down!
Overall, Europe remained stable, while Wall Street traded at record highs to the close on Friday, buoyed by US inflation figures that came in line with expectations, which reinforced the likelihood of a rate cut by the Federal Reserve next week. (Put that in Wednesday’s diary!)
At the same time, the trade decision with the tariff spectre will be closely scrutinized as the meeting between the current two global strongmen, Donald Trump and the Chinese president, approaches. (That’s Friday’s geo-political weather taken care of).
THE WEEK THAT WAS
Besides corporate earnings, which are flooding onto the deck, what else had significance at a glance?
Well, let’s start with the weekly protagonist – DJT, who backpedalled again regarding his on-off indecisiveness about Russia. Whilst telling Zelensky earlier in the week he can’t win the war or have long-range missiles to hit MB (Moscow and beyond), he then slapped sanctions on the two largest Russian oil and gas companies, to show displeasure about the fact that Russia continues to rain missiles and drones down on Ukraine.
Russia is fairly adept at circumventing sanctions, so the effect will take time to be seen. That said, risky assets, like oil, saw prices rebound, no doubt further aided by the resumption of Sino-American trade talks.
You may recall last week’s roundup, which mentioned the stellar run of the gold price? This week saw a lot of profit-taking (a very natural occurrence!), but we still ended the week above $4,000. Up to Friday, gold had a 9-week winning streak!
The Cryptosphere is relatively calm, as are the other telling indicators, such as agricultural products. Feeling a little bit of limbo….
AND SO TO THE TRICK OR TREATS WEEK AHEAD
… yup, Halloween on Friday..
… yup, Halloween on Friday..
Let’s have a look at the Fed rate decision expected, and corporate earnings this coming week … and it’s a huge week!It seems, despite the usual data not being provided (no thanks to the US Federal govt shutdown), which staggers on…another 0.25% rate cut is on the cards, with the door open to another December cut. What it will mean is happy days for markets and further momentum in equities as we head closer towards year-end. Good for our portfolio values!
Whilst the trade talks started yesterday in Malaysia, market commentators are betting on a trade deal (or at least another truce) being made on the Halloween date scheduled meeting between DTJ and Xi Jinping.
Given it is on Halloween, hopefully the Irish legend of “Stingy Jack” tricking the Devil won’t play out! That said, a deal or truce will further fuel equity momentum.
I’ll leave it to you to decide who is who in the US/China reference, and who tricks whom (or not) in this meeting!
Finally, the tsunami of earnings reports that we expect from some of the biggest names in tech headline: Apple, Microsoft, Google, Meta, and Amazon. And as we saw this week, not all earnings surprises that were positive were greeted with exuberance. Volatility is still in the air.
In Closing: If corporate earnings, the Fed meeting, and trade talks are positive catalysts, equity investors are in the right space!
Here’s to a great week ahead with sage and profitable decisions!
For insight into distinguishing real signals from market noise, read Understanding the Noise — a timely reminder amid volatility.
Andrew
Information is accurate at the time of writing
