The State of Markets: "Mini Wobble? Or Market Turning Point?"
Global equities lost their momentum this week. After a strong rally from late September, the DJ global index made a new intra-day high last Friday. In the past few trading days, though, it’s struggled to push beyond that (see chart). At the time of writing in today’s trading session (not included in the chart), global equities and other risk assets have rolled over (e.g. with the S&P500 currently down 1.5%). Higher beta indices, which have rallied harder in recent weeks, are unsurprisingly down by more (e.g. the Philly SOX, lower today by 3.8%). Those moves are on Trump’s announcement that he’s considering a “massive increase” in tariffs on China, as well as potentially cancelling his planned summit with Xi Jinping.
In the near term, therefore, the question is: Will US and global equity markets roll over? Or, like other ‘mini wobbles’ in recent months, is this simply an opportunity to buy the dip? Along with that, whether US equities are in a bubble remains a key debate.
Since the start of the government shutdown, the release of certain key data points has been delayed. US CPI for September, for example, was due to be released next Thursday, but has been delayed until 24th October. Other government data will also likely be delayed (e.g. next Friday’s housing starts and building permits). Private sector reports, though, remain unaffected, e.g. next Tuesday’s NFIB small business survey and Thursday’s NAHB homebuilders’ index.
The main event of the week will be the annual World Bank & IMF meetings in Washington D.C. (Monday – Saturday), featuring comments and speeches from several central bankers. In Asia, attention will be on China’s total social financing and money supply for September (due on Tuesday). Please see below for a full list of key macro data & events.
Key Chart: DJ Global Equity Index shown with its 50 day moving average
Upcoming Important Data/Events This Week:
|
Events: |
NB The US government shutdown is ongoing – and delaying the release of certain data points.
Annual Meetings of the World Bank & the IMF take place in Washington, D.C. (Mon to Sat); market holiday in Japan, on behalf of National Sports Day (Mon); Powell to speak at NABE (Tues, 4:30pm); speech by BOE’s Bailey (Tues, 6pm); ECB’s Lagarde speaks in D.C. (Thurs, 5pm).
|
|
Monday: |
Chinese imports, exports, & trade balance (Sept). |
|
Tuesday: |
UK employment, jobless claims & average weekly earnings (Aug/Sept, 7am); US NFIB small business optimism (Sept, 11am); US headline & core CPI (Sept, 1:30pm). |
|
Wednesday: |
N/A |
|
Thursday: |
US retail sales (Sept, 1:30pm); US headline & core PPI (Sept, 1:30pm).
|
|
Friday: |
US housing starts & building permits (Sept, 12:30pm). |
|
Key earnings: |
JPMorgan, Wells Fargo, Goldman Sachs, BlackRock, Citigroup (Tues); ASML, Bank of America, Morgan Stanley (Wed); Charles Schwab, Marsh McLeannan, BNY Mellon, Nordea Bank, Bank of Central Asia (Thurs); American Express, Schlumberger, Volvo (Fri). |
Key Research
Global Macro Report, 9th October 2025:
“UK: The Path to Lower Inflation A.k.a. ‘Top Down’ & ‘Bottom Up’ Perspectives”
One of the key questions facing the UK is: How much more will the BoE cut rates? And how quickly?
So far this cutting cycle has been shallow; the UK has one of the highest policy rates in the G7; and markets don’t expect another cut this year, with only one priced for 2026. There are also (still) clear/ongoing signs that money is ‘too tight’: Money supply, for example, has been contracting in real terms since early 2022 (fig 1). As a result, economic growth has been tepid (real GDP has averaged less than 1% annualised over the past 12 quarters).
Looser policy is therefore necessary for a growth reacceleration. The timing and speed of that loosening, though, hinges on the inflation outlook. In Section 1 we think about inflation from two key perspectives. Both point to lower inflation, and suggest that the BoE should soon begin to ‘catch up’ with the depth of cutting cycles by other central banks. That should set the stage for a cyclical recovery in the UK (see below for detail, and see next week’s Longview research for detailed household cashflow analysis).
Key North American Macro Data & Events:
|
Events: |
NB The US government shutdown is ongoing – and delaying the release of certain data points. Market holiday in Canada, on behalf of Thanksgiving Day (Mon); speeches by Fed’s Paulson at NSBE (Mon, 5:10pm), Bowman in moderated conversation at IIF (Tues, 1:45pm), Powell at NABE (Tues, 4:30pm), Collins to the Greater Boston Chamber of Commerce (Tues, 8:30pm), Miran at Nomura research forum (Wed, 5:30pm), Waller at council on foreign relations (Thurs, 2pm), Musalem in Fireside chat at IIF (Fri, 5:15pm); Fed releases Beige Book (Wed, 7pm). |
|
Monday: |
N/A |
|
Tuesday: |
US NFIB small business optimism (Sept, 11am); Canadian building permits (Aug, 1:30pm). |
|
Wednesday: |
Canadian existing home sales (Sept, 10am); US headline & core CPI (Sept, 1:30pm); US Empire manufacturing (Oct, 1:30pm); Canadian manufacturing & wholesale sales (Aug, 1:30pm); US hourly earnings (Sept, 1:30pm). |
|
Thursday: |
Canadian CFIB business barometer (Oct, 12pm); Canadian housing starts (Sept, 1:15pm); US retail sales (Sept, 1:30pm); US headline & core PPI (Sept, 1:30pm); US New York Fed service sector business activity (Oct, 1:30pm); US weekly jobless claims (1:30pm); US Philadelphia Fed business outlook (Oct, 1:30pm); NAHB homebuilders index (Oct, 3pm); US business inventories (Aug, 3pm). |
|
Friday: |
US housing starts & building permits (Sept, 12:30pm); US imports and exports price index (Sept, 1:30pm); US industrial & manufacturing production & capacity utilisation (Sept, 2:15pm); US total TIC flows (Aug, 9pm). |
|
Key earnings: |
Fastenal (Mon); JPMorgan, J&J, Wells Fargo, Goldman Sachs, BlackRock, Citigroup (Tues); ASML, Bank of America, Morgan Stanley, Abbott Labs, Progressive, Prologis, PNC Financial, Kinder Morgan, United Airlines Holdings (Wed); Charles Schwab, Marsh McLeannan, BNY Mellon, US Bancorp, CSX, Travelers (Thurs); American Express, Truist Financial Corp, Schlumberger (Fri). |
Fig B: US headline & core CPI (Y-o-Y %)
Key European Macro Data & Events
|
Events: |
Annual Meetings of the World Bank & the IMF take place in Washington, D.C. (Mon to Sat); speeches by ECB’s Makhlouf in D.C. (Tues, 4:30pm), Kocher in New York (Tues, 4:40), Villeroy in New York (Tues, 5:15pm), Reh in D.C. (Wed, 2:45pm), Villeroy in D.C. (Wed, 4:50pm), Lane in D.C. (Thurs, 4:45pm), Lagarde in D.C. (Thurs, 5pm), Rehn in D.C. (Fri, 6pm); Riksbank’s Thedeen speaks in D.C. (Wed, 8:30pm); Bundesbank’s Nagel speaks in D.C. (Fri, 1:45pm); Bank of Italy releases quarterly economic bulletin (Fri, 2pm). |
|
Monday: |
German current account balance (Aug). |
|
Tuesday: |
German headline & core CPI (September final estimate, 7am); German & Eurozone ZEW survey – expectations & current situation (Oct, 10am). |
|
Wednesday: |
German wholesale price index (Sept, 7am); French headline & core CPI (September final estimate, 7:45am); Spanish headline & core CPI (September final estimate, 8am); Eurozone industrial production (Aug, 10am). |
|
Thursday: |
Italian headline & core CPI (September final estimate, 9am); Italian trade balance (Aug, 10am); Eurozone trade balance (Aug, 10am). |
|
Friday: |
Eurozone headline & core CPI (September final estimate, 10am). |
|
Key earnings: |
ABB, Investor B, Nordea Bank, EssilorLuxottica (Thurs); Volvo B (Fri). |
Fig C: Eurozone ZEW index, economic expectations
Key UK Macro Data & Events
|
Events: |
Speeches by BOE’s Greene (Mon, 12:05pm), Mann (Mon, 8:10pm), Taylor (Tues, 1pm), Bailey (Tues, 6pm), Ramsden (Wed, 9am), Breeden (Wed, 4:45pm & 7pm), Mann (Thurs, 2pm & 3:45pm), Greene (Thurs, 7:30pm), Pill (Fri, 10:35am), Greene (Fri, 12pm), Breeden (Fri, 5:30pm). |
|
Monday: |
N/A |
|
Tuesday: |
BRC retail sales (Sept, 12:01am); employment, jobless claims (Sept) & average weekly earnings (Aug, 7am). |
|
Wednesday: |
N/A |
|
Thursday: |
Monthly GDP estimate, industrial & manufacturing production, goods trade balance & construction output (Aug, 7am). |
|
Friday: |
N/A |
|
Key earnings: |
N/A |
Fig D: Average weekly earnings (Y-o-Y %, 3 m.m.a.)
Key Asia-Pacific Macro Data & Events
|
Events: |
Market holiday in Japan, on behalf of National Sports Day (Mon); RBA minutes from Sept policy meeting (Tues, 1:30pm); RBNZ chief economist speaks (Tues, 11:45pm); speeches by RBA’s Hunter (Wed, 12:30am), Bullock fireside (Wed, 8:45pm); speeches by BOJ’s Tamura in Okinawa (Thurs, 2:30am), Uchida (Fri, 7:35am). |
|
Monday: |
Chinese imports, exports, & trade balance (Sept). |
|
Tuesday: |
Japanese M2 & M3 money supply (Sept, 12:50am); Australian NAB business confidence (Sept, 2:30am); Chinese total social financing, new yuan loans, and M0, M1 & M2 money supply (Sept, 12:30pm). |
|
Wednesday: |
Australian Westpac leading index (Sept, 12:30am); Chinese PPI (Sept, 2:30am); Japanese industrial production & capacity utilisation (August final estimate, 5:30am). |
|
Thursday: |
Japanese machinery orders (Aug, 12:50am); Australian employment data (Sept, 1:30am); Japanese Tertiary industry index (Aug, 5:30am). |
|
Friday: |
N/A |
|
Key earnings: |
Rio Tinto Ltd (Wed); Bank of Central Asia, Taiwan Semiconductor (Thurs); China Mobile, Zijin Mining Group, China Telecom (Fri). |
Fig E: China preliminary imports and exports (Y-o-Y %, 3m.m.a.)
This Week:
Longview on Friday, 10th October 2025:
“US –> Downside Inflation Surprise Expected In 2026”
Global Macro Report, 9th October 2025:
“UK: The Path to Lower Inflation A.k.a. ‘Top Down’ & ‘Bottom Up’ Perspectives”
Quant Monthly Appendix, 8th October 2025:
“S&P500 Sector Valuation Overview”
Daily Dose of Macro & Markets:
Daily Dose of Macro & Markets 9th October 2025:
“Fed Policy – Drifting in the Dark?”
Daily Dose of Macro & Markets 8th October 2025:
“OIL: Another Step Towards (More) Oversupply”
Daily Dose of Macro & Markets 7th October 2025:
“Gold at $4,000: (Relatively) Overpriced?"
Weekly Risk Appetite Gauge:
'Weekly Risk Appetite Gauge', 6th October 2025:
“Signs of Euphoria-> (still) Building in Global Markets”
Last Week:
Longview on Friday, 3rd October 2025:
“Japan: Optics vs. Reality – Part II”
Longview on Thursday, 2nd October 2025:
“Japan: Optics vs. Reality – Part I”
Tactical Equity Asset Allocation No. 261, 1st October 2025:
“Speculative Excess, Froth and Euphoria A.k.a. Tactically Cautious US Equities”
Monthly Global Asset Allocation No. 71, 29th September 2025:
“OIL: Supply Surpluses Ongoing A.k.a. SELL Upside Breakouts”
Daily Dose of Macro & Markets:
Daily Dose of Macro & Markets 2nd October 2025:
“Spain’s Re-Rating Moment -> Outgrowing The US”
Daily Dose of Macro & Markets 1st October 2025:
“Tariffs –> Still A Key Risk”
Daily Dose of Macro & Markets 30th September 2025:
“UK Economy –> Delicately Poised But…”
Weekly Risk Appetite Gauge:
'Weekly Risk Appetite Gauge', 29th September 2025:
“Toppy Tech!”