The State of Markets
A brief review of all key upcoming events across the major regions of the globe & an overview of key recent market trends.
The State of Markets: ‘(starting to) Price out Recession Risk’
Momentum in US equity markets faded somewhat last week. That is, after strong gains in late September, the S&P500 broadly traded sideways/lower; the NASDAQ100 failed to convincingly break above a key resistance level (at around 20,000, on the cash index); while other indices rolled over (e.g. see the Russell 2000). Consistent with that, implied volatility trended up (as measured by the VIX).
Yesterday’s reaction to the nonfarm payrolls print, though, was encouraging for the bulls – with strong gains amongst major indices. Of note, the number was much better than expected (+254k, vs. consensus of +150k), and prior months were revised higher. Treasury yields moved up; the dollar strengthened further (DXY: +0.5% yesterday); and rates priced out 25bps of Fed cuts from this easing cycle (see key chart below).
More clues on Fed policy are likely next week with the release of the minutes from the September meeting (Wednesday), followed by the September CPI report (Thursday). Other key data points include the NFIB small business survey (Tuesday), as well as PPI and University of Michigan sentiment (both on Friday). Elsewhere earnings season gets going (with key banks reporting on Friday, including JPMorgan, Wells Fargo & BNY Mellon). Please see below for a full list of key events and data releases in the week ahead.
Key chart: December 2025 & 2026 implied Fed funds rates (%)
(All in London time BST)
Events: Market holiday in China on account of National Day.
Data: German factory orders (Aug, 7am); Eurozone retail sales (Aug, 10am).
Earnings: N/A
Events: N/A
Data: US NFIB small business optimism (Sept, 11am).
Earnings: PepsiCo.
Events: RBNZ policy decision (2am); Fed minutes from September meeting (7pm).
Data: Japanese machine tool orders (September first estimate, 7am).
Earnings: N/A
Events: N/A
Data: US headline & core CPI (Sept, 1:30pm).
Earnings: N/A
Events: Market holiday in Hong Kong on account of Chung Yeung Day.
Data: Japanese M2 & M3 money supply (Sept, 12:50am); US headline & core PPI (Sept, 1:30pm); US Michigan sentiment (October first estimate, 3pm).
Earnings: JPMorgan, Wells Fargo&Co.
Tactical Equity Asset Allocation No. 249, 3rd October 2024:
“Five Key Reasons for (Tactical, Near Term) Caution”
We remain cautious about the near term (1 – 4 month) tactical outlook for the S&P500.
Medium term (1 – 4 month) market timing models are around 80 – 90% of the way towards generating a full across the board SELL signal. That is, a wide variety of models are already on SELL (including the proportion of single stocks at 52 week highs less those at 52 week lows – see FIG 1 below). Other technical models are also on SELL. Our slow moving ‘market environment’ model and fast moving risk appetite scoring system are also both on/close to SELL. There’s a lack of downside put protection in portfolios and momentum is rolling over, while a small number of models are not yet on SELL (but are close) – see section 1b & 2 for detail.
Events: Speeches by the Fed’s Bowman at Independent Bankers Association of Texas (6pm), Kashkari at an event hosted by the Bank Holding Company Association (6:50pm), Bostic in a conversation with Steve Koonin (11pm) & Musalem on the Economy and monetary policy (11:30pm).
Data: US consumer credit (Aug, 8pm).
Earnings: N/A
Events: Speeches by the Fed’s Kugler at ECB event (8am), Bostic on the Economic outlook (5:45pm), Collins at a Community Banking conference (9pm) & Bostic (1pm).
Data: US NFIB small business optimism (Sept, 11am); US imports/exports, & trade balance (Aug 1:30pm).
Earnings: PepsiCo.
Events: Speeches by the Fed’s Logan at the Houston Energy conference (2:15pm), Goolsbee at payments conference (3:30pm), Collins at Worcester event (10pm) & Daly in moderated conversation (11pm); Fed minutes from September meeting (7pm).
Data: US wholesale inventory (August final estimate, 3pm).
Earnings: N/A
Events: Speeches by the Fed’s Barkin in Fireside chat (3:30pm) & Williams at Binghamton University (4pm).
Data: US headline & core CPI (Sept, 1:30pm); US weekly jobless claims (1:30pm).
Earnings: Progressive, Delta Air Lines, Domino’s Pizza Inc.
Events: Speeches by the Fed’s Goolsbee at the Community Bankers Symposium (2:45pm) & Logan in panel discussion (3:45pm).
Data: US headline & core PPI (Sept, 1:30pm); Canadian employment data (Sept, 1:30pm); US Michigan sentiment (October first estimate, 3pm).
Earnings: JPMorgan, Wells Fargo&Co, Bank of NY Mellon, Fastenal.
Fig B: US Michigan sentiment (index)
Events: Speeches by the ECB’s Cipollone on digital payments in Frankfurt (8:05am), Lane in Frankfurt (8:45am) & Escriva in Madrid (12:45pm).
Data: German factory orders (Aug, 7am); Eurozone Sentix investor confidence (Oct, 9:30am); Eurozone retail sales (Aug, 10am).
Earnings: N/A
Events: N/A
Data: German industrial production (Aug, 7am).
Earnings: N/A
Events: Speech by the ECB’s Villeroy in Paris (5pm).
Data: German imports/exports, & trade balance (Aug, 7am).
Earnings: N/A
Events: N/A
Data: German retail sales (Aug, 7am); Italian industrial production (Aug, 9am).
Earnings: N/A
Events: N/A
Data: German headline CPI (September final estimate, 7am).
Earnings: N/A
Fig C: Eurozone retail sales (with 3 month moving average)
Events: N/A
Data: N/A
Earnings: N/A
Events: N/A
Data: N/A
Earnings: N/A
Events: N/A
Data: BRC retail sales (Sept, 12:01am).
Earnings: N/A
Events: N/A
Data: RICS house price balance (Sept, 12:01am).
Earnings: N/A
Events: N/A
Data: Monthly GDP estimate, industrial & manufacturing production, goods trade balance & construction output (Aug, 7am).
Earnings: N/A
Fig D: UK RICS house price balance (index)
Events: Market holiday in China on account of National Day.
Data: Australian headline CPI (Sept, 1am); Japanese ESRI leading index (August first estimate, 6am).
Earnings: N/A
Events: RBA minutes from September meeting (1:30am); speech by the RBA’s Hauser at the Walkley Foundation (1:30am).
Data: Australian Westpac consumer confidence (Oct, 12:30am); Japanese cash earnings (Aug, 12:30am); Japanese household spending (Aug, 12:30am); Australian NAB business confidence (Sept, 1:30am); Australian ANZ-Indeed job advertisements (Sept, 1:30am).
Earnings: N/A
Events: RBNZ policy decision (2am); speech by the RBA’s Kent at Macquarie University (1am)
Data: Japanese machine tool orders (September first estimate, 7am).
Earnings: N/A
Events: Speech by the RBA’s Hunter at Macquarie University (8:45am).
Data: Japanese PPI (Sept, 12:50am); Japanese bank lending (Sept, 12:50am).
Earnings: Fast Retailing, Seven & i Holdings.
Events: Market holiday in Hong Kong on account of Chung Yeung Day.
Data: Japanese M2 & M3 money supply (Sept, 12:50am).
Earnings: N/A
Fig E: Japanese ESRI leading indicator (index)
(Long)View from London, 4th October 2024:
“Tactical Equites, OIL, & Strategic AA Update”
Tactical Equity Asset Allocation No. 249, 3rd October 2024:
“Five Key Reasons for (Tactical, Near Term) Caution”
Quarterly Asset Allocation No. 59, 30th September 2024:
“All Change”
(Long)View from London, 27th September 2024:
“The Global Investment Puzzle (& the ‘Hidden Gems’)”
Monthly Global Asset Allocation No, 50, 25th September 2024:
“Chinese Equities: Bear Market Rally a.k.a. A Trade Not An Investment”
Quarterly Asset Allocation No. 59, 25th September 2024:
“Cheap Markets with Earnings Growth”
The SHORT VIEW (& market positioning), 24th September 2024:
“Copper: Uptrend Ongoing (for now)”