The week that was

Global equity markets moved modestly lower last week as the continuation of the U.S. government shutdown and growing concerns over elevated AI valuations and debt funded capex prompted investors to take profits. Technology stocks led the declines, with the S&P 500 finishing the week down 1.6%. In Europe, markets also retreated, falling 1.2%, with the tech sector again the main laggard. Global bond markets were largely unchanged over the week, as investors weighed softer economic data against uncertainty around central bank policy direction. Global commodity markets were broadly flat, although oil prices slipped around 2% amid concerns about demand softness and rising supply from non-OPEC producers.

The Week Ahead

Markets have started the week on the front foot in Asia as expectations of an imminent bipartisan deal to end the US government shutdown act as a support for risk assets.  Under the proposed agreement, most government agencies would be funded until the 30^th of January 2026, kicking further negotiations beyond the key Thanksgiving and Christmas holiday seasons. Elsewhere in Asia consumer prices stepped up in October on the back of holiday spending however a more sustained improvement is unlikely particularly given softness in producer prices.

Third quarter earnings season is entering its closing stages but it’s still likely to be a dominate driver of market sentiment in the week ahead. With over 90% of S&P 500 companies having reported, the blended earnings growth rate is running at 13%, representing the fourth consecutive quarter of double-digit earnings growth. Key names in focus this week will include Cisco, Disney and in particular Flutter as investors look for reassurance on the impact of prediction markets on their business model following a 27% decline in its share price from the August highs. Given the selloff in AI related names last week, the earnings of CoreWeave, the most heavily leverage public player in the space will receive added attention. Closer to home, Kingspan released robust Q3 numbers this morning in which it reiterated full year guidance on the back of a strong order backlog. Other notable names with results out this week include DCC, Grafton Group and Aviva.

On the macro front, US small business sentiment is forecast to have moderated for the month of October when it is released today. The German ZEW Survey is set to confirm economic sentiment in Europe’s largest economy rebounded in November to its highest level in three months on Tuesday.  GDP data is likely to confirm that the UK lost some momentum in Q3 when it is released on Wednesday, raising the stakes ahead of the budget later this month. On Friday, Eurozone trade data should confirm its trade surplus in Goods with the US fell in August. Whilst in China, Industrial Production and Retail Sales data are likely to indicate that growth momentum cooled at the start of Q4. A raft of data which could provide more colour on the inflation outlook and strength of the consumer in the US is due for release but it’s all dependent on whether the longest Government Shutdown in US history gets resolved. Elsewhere the UN’s Climate Change Conference will be in focus this week, albeit the market impact will likely be limited given the absence of high-level participation from the US and China.

Key Market-Moving Events This Week

• Macro: German Zew Survey, UK GDP, Chinese Retail Sales,
• Corporate updates: DCC, Flutter, CoreWeave, Disney and Grafton
• Political developments: US government shutdown negotiations, COP-30

This is an extract from the Weekly Markets Report by Cantor Fitzgerald Ireland. For more detail on individual securities, or to discuss how we can support your investment needs, please get in touch.

Written by John Mullane, CIO, Cantor Fitzgerald Ireland