Market Updates

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.

This week’s key events include FOMC minutes, US CPI, PPI figures, and bank earnings, along with Eurozone and German economic data, while US inflation data ahead of the presidential election takes center stage; markets reacted strongly to the US jobs report, with treasury yields rising, oil prices spiking due to geopolitical tensions, and central bank chatter driving volatility, especially in the euro and sterling.

The $13.2 trillion real estate market is stabilizing, presenting new opportunities amid sticky inflation and structural demand changes, while Beijing’s fiscal stimulus leads to an upgrade in Chinese stocks.

This week kicks off with China’s Golden Week celebrations, while key market events include Fed Chair Powell’s speech and the US jobs report, along with closely watched Eurozone and US economic data releases, as well as continued central bank commentary.

The U.S. presidential race has tightened as Vice President Kamala Harris replaces President Biden on the Democratic ticket, facing a close contest with Donald Trump, with policy differences and control of Congress set to shape key areas like tax, energy, trade, and regulation.

This week’s key events include preliminary S&P PMI prints, US GDP revision, and the Fed’s PCE readings, while central bank speeches and China’s industrial profits will also attract market attention following last week’s Fed rate cut.