Market Updates

This week’s market focus includes global inflation data, the COP 29 climate conference, and major earnings reports from Chinese e-commerce giants, along with key US CPI, Eurozone GDP, and UK employment figures, as central banks weigh in on monetary policy and China’s recent measures to support domestic growth gain attention.

Despite expectations for another Federal Reserve rate cut, strong U.S. job and wage data suggest rates may not fall as much as markets anticipate, while the European Central Bank aligns more closely with lower-rate projections, favoring euro area fixed income over U.S. assets.

The first week of November brings key economic data releases and central bank decisions, with markets watching for a potential Fed rate cut and Bank of England easing, amid concerns over weak industrial output in Germany and France, while the looming U.S. presidential election remains the primary driver of market sentiment.

Recent volatility in fixed income markets highlights a preference for quality assets, with opportunities in UK gilts over U.S. Treasuries, a focus on short-dated credit, and a strategic shift toward equities while remaining cautious on U.S. high yield spreads.

The week starts quietly before ramping up with key events including US PCE inflation data, the US employment report, the UK Chancellor’s budget, and major corporate earnings; markets remain cautious ahead of the US elections, while mixed economic signals and central bank comments shape expectations for future rate cuts and global growth forecasts.

U.S. stocks are rebounding with strong Q3 earnings, leading to a preference for broad U.S. equities driven by resilient earnings and potential Fed rate cuts, while Japanese stocks remain appealing amid solid earnings, and weak growth keeps European stocks underweight except for select sectors like financials.

This week, market attention will focus on US quarterly earnings, the Fed’s Beige Book, and key international events like the IMF-World Bank meeting and BRICS summit, while central bank commentary and data releases, including US PMI, durable goods, and consumer sentiment, will shape economic outlooks amidst election-driven volatility; last week saw a mixed US economic picture, a strengthening dollar, lower oil prices due to demand concerns, and China’s economic stabilization efforts amid policy easing.

China’s stock surge highlights the benefit of targeting global opportunities with clear catalysts, while BlackRock maintains a U.S. equity overweight on expanding AI themes, favors Japanese stocks for their strong outlook, holds a less confident overweight in UK stocks, and upgrades UK gilts with expectations for deeper policy rate cuts.

In a US holiday-shortened week, markets will focus on retail sales, corporate earnings, and key data releases like UK and Eurozone CPI, while China’s GDP and fiscal measures draw attention; a mixed week saw a rise in the 10-year US Treasury yield, solid bank earnings boosting equities, and oil prices rising amid geopolitical concerns, with US inflation data remaining sticky despite some cooling signals.

Market narratives have shifted from AI excitement and recession fears to confidence in U.S. economic resilience, with a focus on supply-driven dynamics, prompting a risk-on stance, overweight in U.S. stocks, diversified AI investments, and flexibility in Japanese and Chinese equities.