Weekly Round-up, 3rd November

Earnings season reaches its peak this week. Last week, results from major US technology, financial, and healthcare companies drove markets. Major developed-market central bank meetings and President Trump’s Asia tour were also key drivers. 

Global equity markets had another strong week in GBP-terms, rising around 1.8%. Japanese and US equities led gains., while Europe – the best performing region year-to-date – gave back some ground.  

Looking ahead, attention will remain on corporate earnings, the Bank of England’s Monetary Policy Committee (MPC) meeting and efforts to end the US government shutdown. This will be the busiest week of the Q3 reporting season, with results due from the likes of AMD, Berkshire Hathaway and Palantir.  

Last week 

• Q3 corporate earnings dominated the week, with over 800 major companies reporting, including five of the Magnificent Seven. Results were generally positive, though expectations for large-cap technology stocks remain high. 

• The US shutdown continued and is now close to becoming the longest in history.  

• Several major central banks (the Fed, ECB, BoJ and Bank of Canada) met to review interest rates policy, all broadly in line with market expectations.  

• President Trump toured Asia, visiting Malaysia, Japan and South Korea, with a key focus on ending the week with improved trade relations with China.  

This week 

• Corporate earnings are set for the biggest week of the quarter, with around 1,500 major companies due to report. 

• Forward looking PMI data from both the US and China will be closely watched following Trump’s meeting with President Xi. 

• The Bank of England’s MPC meets on Thursday, with a rate change considered unlikely. 

• The US Senate will reconvene on Monday, to continue to attempt to implement a funding bill aimed at reopening the government.

Source: Bloomberg. Currency GBP.  

 More details:  

• Global markets continue to perform well, with all major developed equity markets delivering double digit returns year-to-date. The US continues to lag in sterling terms, in part due to currency movements. Bonds have also continued to perform well, helped by declining central bank interest rates, which have supported  good returns from both investment grade and high yield debt. 

• We are in the heart of Q3 earnings season, which remained positive last week. The Magnificent Seven reporting companies delivered largely positive updates although share-price reactions were mixed. Microsoft and Meta dipped despite generally good results, while Amazon jumped 10% on AI-powered cloud growth. This week’s focus broadens to include AstraZeneca, Toyota and other global leaders.  

• Interest rate policy remains a key market driver. Last week, the Fed and Bank of Canada both cut rates by 25bps, while the BoJ and ECB held rates steady. This week investors expect the Bank of England to hold rates steady.  

• In the US, the government shutdown continued even as President Trump’s Asia tour produced several headline agreements, including new trade agreements with Malaysia and South Korea. The tour included a treaty to ease border tensions between Thailand and Cambodia, a $550bn Japanese investment into the US, and a Nobel Peace Prize nomination. The tour ended with a meeting between President Trump and President Xi. The Trump-Xi meeting saw the US agree to lower its tariffs on China and in return, China would provide access to critical minerals and resume importing US agricultural goods.