Last week, global markets snapped a four-week-long losing streak in September, with all the major indices finishing higher. However, US’s strong job data on Friday sent a clear message that the Fed will not pivot any time soon, paring most gains of the equity markets in the early week. While the three major US indices may continue to test their June low supports, the US CPI data will remain a focus for investors to navigate the inflation trajectory. With the third quarter earnings season kicking in, major companies’ performances may tell more about how bad of an impact the macro headwinds have had on businesses. The US big banks, including JPMorgan, Morgan Stanley and Citigroup, will all report their earnings on the 14 October before markets open.
In addition, China’s September trade balance and new loan data will also offer clues for how it went with the world-second-largest economy battling Covid-19.
What are we watching?
- Energy stocks outperform: The Energy Select Sector SPDR Fund (XLE) gained 10% last week, highlighting a possible new era for energy and commodities. See energy stocks' movements
- Crude oil jumps: The crude oil prices rose for five trading days in a row in the first week of October amid a 2 million barrels per day output cut by the OPEC+. Check on oil prices
- US dollar regains upside supreme: The king dollar regained upside momentum in the last three trading days, with USD/JPY closing above 145 for the first time in 24 years. Trade US dollar index
- Chinese markets reopen: China’s mainland equity markets will reopen after the golden week holiday. The jump in Hong Kong stocks last week may boost optimism. Check on Hang Seng Index