Markets weigh Fed guidance, the Trump–Xi summit, and corporate earnings with some rough edges
Financial markets are trying to digest the large amount of data released yesterday on corporate earnings, along with Powell’s very cautious remarks about the Fed’s next moves. Markets are also attempting to decipher the potential outcomes of the meeting between Trump and Xi. In this environment, uncertainty is on the rise, as is volatility. Equities remain broadly in positive territory, while the fixed-income segment shows a more wait-and-see attitude.
Two key elements stand out in our intermarket dashboards today: the pause in the bond market and the recovery of the annual average ratio between the Dow and gold. The first signal is a direct consequence of Powell’s statements yesterday, in which he hinted at the possibility of another rate cut in December. The second confirms the retracement phase for gold following the highs reached in recent weeks. Market sentiment remains positive overall, though not entirely, with lingering uncertainty tied to monetary-policy decisions and some mixed earnings results.
On the macroeconomic front, attention shifts to the Eurozone. Today’s focus will be on inflation data in Germany, economic growth figures for the Eurozone in the third quarter, and private-sector confidence data. Markets are also awaiting the ECB’s decision, while the BoJ has already confirmed that it will maintain current interest-rate levels.
As for corporate earnings, Amazon and Apple are set to report today.
Our forward-looking analysis suggests another positive session for equities and a more uncertain environment for bonds. Commodity signals are mixed, while volatility is expected to tick slightly higher.
In brief
A positive day is expected for equities
A positive day is expected for US equities
A positive day is expected for European equities
A positive day is expected for Asian equities*
A neutral day is expected for bond yields
A positive day is expected for commodities
A day with stable volatility is expected
Here's an overview of the individual assets analyzed…
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