LGT Navigator

Stocks rise on US-China meeting hopes

Equity markets in Asia surged on Friday, with South Korea’s Kospi reaching a record high and Japan’s Nikkei 225 also trading strongly, as investors anticipated next week’s meeting between US President Trump and China’s President Xi Jinping. US and European stocks recovered after earlier declines, lifted by strong corporate earnings and rising expectations for further Federal Reserve rate cuts. Meanwhile, Japan’s inflation accelerated in September, posing an early challenge for the country’s new prime minister. Investors will focus on the US consumer price index, which will be released with a delay on Friday due to the continuing US government shutdown. It's due to be the first major economic indicator published since the impasse began.

  • Data
  • Autore Shane Strowmatt, Senior Investment Writer
  • Tempo di lettura 5 minuto

US China trade negotiations
© Shutterstock

South Korea’s Kospi index surged 2.5% to reach a record high on Friday, as anticipation of next week’s meeting between Trump and Xi boosted regional stocks. The announcement of the leaders’ upcoming talks supported gains across Asia. Japan’s Nikkei 225 was trading 1.4% higher on Friday, and Hong Kong’s Hang Seng Index gained 0.4%. Mainland China’s CSI 300 was up 0.7%, while Australia’s S&P/ASX 200 was little changed. South Korea’s finance ministry indicated readiness to intervene in foreign exchange markets amid ongoing volatility, while the won strengthened slightly but remains down over the past three months.

Japan inflation rises, testing new prime minister

Japan's core inflation reached 2.9% in September, up from 2.7% in August, marking the first increase since May and keeping price growth above the Bank of Japan’s 2% target for the forty-first consecutive month. Headline inflation also climbed to 2.9%, while the "core-core" measure eased to 3% from 3.3% in August, and rice inflation fell sharply to 49.2%. The data presents an early challenge for new Prime Minister Sanae Takaichi, who faces pressure to manage rising costs without hindering economic growth. Plans for a stimulus package exceeding JPY 13.9 trillion are under consideration to support households and investment amid persistent inflation concerns.

US stocks recover after midweek losses

US stocks ended Thursday with solid gains, as the Dow Jones Industrial rose 0.3% to 46,734.61 points, the S&P 500 added 0.6% to 6738.44 points, and the Nasdaq 100 increased 0.9% to 25,097.41 points. The recovery followed previous declines driven by renewed US-China trade tensions, with markets supported by strong quarterly results from major companies and growing expectations of further interest rate cuts by the Federal Reserve next week. Tesla shares jumped 2.3%, rebounding despite disappointing earnings, helped by record sales and unexpected revenue growth. In contrast, Super Micro Computer dropped 8.7% after cutting its revenue target.

Euro-area consumer confidence rises again

Consumer confidence in the euro area climbed by 0.7 points to -14.2 in October, according to a flash estimate released by the European Commission on Thursday. Sentiment in the broader European Union improved by 0.8 points to -13.5, marking the second consecutive monthly increase. Both measures moved closer to their long-term averages, breaking a period of stagnation observed since April. The latest gains suggest improving household sentiment as economic prospects within the euro area and the EU stabilise. Most major European markets advanced on Thursday. The Euro Stoxx 50 climbed 0.5%, Germany’s DAX rose 0.2% to 24,207.79 points and France’s CAC 40 also gained 0.2%.

SNB publishes first policy meeting summary

The Swiss National Bank released a summary of its September policy meeting on Thursday, providing greater transparency while remaining cautious in its communication. The document offered limited new insights, mainly reiterating existing arguments for keeping the key interest rate at 0%, and provided only vague statements regarding the strength of the Swiss franc and potential interventions. While the SNB underlined its readiness to act in currency markets if necessary, forward guidance or concrete thresholds for action were missing from the summary. The Swiss Market Index slipped 0.4% on Thursday.

US ends Canada trade talks over ad dispute

US President Trump announced the termination of all trade negotiations with Canada on Thursday night, citing Ontario’s government airing an advertisement purportedly misusing a speech by former President Ronald Reagan to criticise tariffs. Trump accused Canada of attempting to influence a pending US Supreme Court case that could affect major tariffs against Canada, calling the ad fraudulent and a threat to US national security and economic interests. The Ronald Reagan Presidential Foundation disputed the accuracy of the advertisement and is considering legal action. This marks the second time this year that Trump has halted trade talks with Canada in response to actions perceived as targeting American trade policy.

Corporate and economic calendar

Corporate news in focus: Quarterly figures from Norsk Hydro, Porsche, Procter & Gamble, Sanofi, and Schindler.

Economic data in focus: UK retail sales (08:00), French Purchasing Managers’ Index (09:15), German Purchasing Managers’ Index (09:30), euro-area Purchasing Managers’ Index (10:00), US building permits (14:30), US Consumer Price Index (14:30), Canadian New Housing Price Index (14:30), US Purchasing Managers’ Index (15:45), University of Michigan Consumer Sentiment Index (16:00) and US new residential sales (16:00).

LGT helps you make informed investment decisions

Global economic and market trends at a glance

You can also follow us on Facebook or LinkedIn – or visit Insights and discover interesting background articles. If you have questions, a consultant from the bank will be happy to help you.

Imprint
Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.