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Tech earnings buoy Wall Street as China data disappoints

US equities ended last week on a positive note, driven by strong results from Amazon and Apple that lifted market sentiment late in the week, while Asian markets started the new week mixed after China’s manufacturing PMI data undershot expectations. European stock indices ended lower on Friday. Gold was stable to start the week just above USD 4000 per ounce, while bitcoin slipped to USD 107,400. US Treasury yields were a bit higher, with the 2-year yield at 3.6% and the 10-year yield near 4.1%. Investors are looking ahead to a busy week, including interest rate decisions from the Bank of England (BOE) and the Reserve Bank of Australia (RBA) as well as Purchasing Managers' Indices from the world's largest economies. Additionally, markets could see increased volatility as the US Supreme Court is scheduled on Wednesday to hear President Donald Trump’s appeal regarding his tariffs regime.

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

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This week, global markets focus on the BOE's interest rate decision on Thursday, amid fresh updates from major central bankers such European Central Bank President Christine Lagarde (Tuesday) and several Federal Reserve officials. On Monday, attention turns to manufacturing PMI data across the euro area, Switzerland, the United Kingdom, and the United States. The Reserve Bank of Australia announces its interest rate decision on Tuesday. Investors then digest crucial service sector PMIs from the euro area, United Kingdom, Japan, and the United States midweek. The University of Michigan Consumer Sentiment Index is due on Friday, but market participants will likely have to do without fresh labour market data due to the ongoing US government shutdown. Additionally, German industrial (Thursday) and trade (Friday) figures, together with China’s trade data (Friday), provide further insight into the health of the global economy. On the corporate side, earnings season is still in full force with results from Berkshire Hathaway (Monday), AMD (Tuesday), McDonald’s (Wednesday), and AstraZeneca (Thursday).

China factory growth slows in October

China’s manufacturing sector expansion slowed in October as the private Manufacturing PMI for China dropped to 50.6 from 51.2 in September, underperforming expectations, according to data released on Monday. The weaker result was attributed to a sharp fall in new export orders, which declined at their fastest pace since May, while business confidence fell to a six-month low amid ongoing US trade tensions. The lacklustre result weighed on regional market sentiment, with China’s CSI 300 trading essentially flat, while Hong Kong’s Hang Seng Index gained 0.9%. South Korea’s Kospi outperformed, surging 2.8% and reaching a record high after exports increased 3.6% year-on-year in October and semiconductor shipments surged, with SK Hynix and Samsung Electronics both posting strong gains. Australia’s S&P/ASX 200 was little changed and Japanese equity markets were closed for a public holiday.

Amazon lifts US stocks

US equities closed higher on Friday as robust quarterly results and optimistic forecasts from technology giants Amazon and Apple improved market sentiment, though caution returned later in the session with indices near record highs. The Nasdaq 100 rose 0.5% to 25,858.13 points, gaining 2% for the week and nearly 5% for October, while the S&P 500 advanced 0.3% and the Dow Jones Industrial climbed 0.1%, with both indices also achieving record levels earlier in the week. Amazon shares soared 9.6% after their cloud division exceeded expectations, and Apple’s stock initially touched a record high but reversed to end 0.4% down, despite stronger holiday sales prospects driven by new iPhone models.

Euro area inflation edges lower in October

Euro area annual inflation is estimated to have declined to 2.1% in October, easing from 2.2% in September according to a flash estimate published on Friday. Services led price pressures with a 3.4% annual increase, while food, alcohol and tobacco inflation slowed to 2.5% and energy prices fell 1%. The moderation in headline inflation was mainly driven by softer increases in food, alcohol, tobacco and non-energy industrial goods, while services inflation saw a slight acceleration. This latest data suggests underlying inflationary pressures in the euro area continue to recede, though the services sector remains a key contributor to overall price growth. European stock indices ended lower on Friday. The Euro Stoxx 50 dropped 0.7%, Germany’s DAX lost 0.7% and France’s CAC 40 slid 0.4%. The Swiss Market Index fell 0.6%.

Canada’s GDP contracts in August

Canada’s gross domestic product contracted by 0.3% in August, following an upwardly revised 0.3% rise in July, according to data released on Friday. This marks the fourth monthly decline in five months, driven by output reductions in both services and goods sectors, with significant drops in mining, quarrying and manufacturing. An advance estimate suggests GDP could have grown by 0.1% in September, resulting in a 0.4% annualised increase for the third quarter, missing the Bank of Canada’s forecast but indicating Canada may avoid a technical recession. Contractions were partly offset by gains in retail trade and real estate, while the Canadian dollar weakened following the release.

Corporate and economic calendar

Corporate news in focus: Quarterly figures from Berkshire Hathaway and BioNTech.

Economic data in focus: Swiss Consumer Price Index (08:30) and Purchasing Managers’ Indices from several countries throughout the day, including Switzerland (09:30), Italy (09:45), France (09:50), Germany (09:55), euro area (10:00), UK (10:30), Canada (15:30) and US (15:45), as well as US Institute for Supply Management Manufacturing Purchasing Managers’ Index (16:00).

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Editor: Alessandro Fezzi
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