Last week, sentiment improved in the US and, by extension, in Global Developed Markets, as well as in China and, consequently, in Global Emerging Markets. Conversely, sentiment declined in the UK and Australia. Investors remained bullish in Japan, neutral in Europe, slightly more positive in Global Developed ex-US markets, and bearish in Asia ex-Japan. China: The macroeconomic outlook continues to deteriorate, with deflation risks rising further in November. New loans extended by China’s banks fell significantly short of expectations, amounting to less than half of last year’s levels, indicating persistently weak credit demand. Last week, following the third consecutive meeting since September that promised strong economic stimulus measures, the annual Central Economic Work Conference (CEW

Last week, sentiment in the US and Europe improved from negative to neutral, lifting the mood of Global Developed Markets investors. However, sentiment in Global Emerging Markets and Asia ex-Japan remained bearish as investors awaited further clarification on the new US administration’s trade policies. Japanese investors stayed bullish, though less so than in previous weeks, and have struggled to convert this risk-tolerant sentiment into market gains for the past two months. In China, sentiment remained neutral ahead of this week’s annual Central Economic Work Conference (CEWC). UK investors also remained neutral, with sentiment dampened by uncertainty over the current PM’s low popularity and a lack of details on Trump’s plans for tariffs on UK exports. The certainty brought by the US elec

Insights from last week's changes in investor sentiment: Last week, investor sentiment turned bearish in Asia ex-Japan and Global Emerging markets. Meanwhile, sentiment stayed negative in Europe and Global Developed markets as investors reassessed the impact of potential tariffs from the Trump administration on those economies. Positive macroeconomic data in Australia (inflation) and China (growth) kept sentiment positive in these markets, while investors in the US, UK, and Global Developed ex-US markets remained neutral. The risks to sentiment in the near-term include US monetary policy (FOMC meeting on December 18), further tariff threats to global trade from the Trump administration (any Tweets now), and the (very) high degree of concentration risk (Magnificent-7) and overvaluation (S&a

Investor sentiment declined across all markets we monitor, except Japan. In Japan, investors grew more bullish following better-than-expected inflation data, which reduced the likelihood of the BoJ raising interest rates soon. Sentiment ended the week negative among investors in Asia ex-Japan, Global Developed, Global Emerging markets, and Europe. Meanwhile, sentiment weakened to a neutral stance in China, Global Developed ex-US markets, the UK, and the US. China: Having observed the property market’s decline over the past three years, Chinese authorities have now introduced a substantial support package to stabilize the real estate sector. However, the design of these measures indicates that China’s leadership still believes an economy growing at 5% does not require additional stimulus. T

Investor sentiment declined last week across all markets we monitor as investors globally reassess the implications of a second Trump presidency for everything from the strength of the USD, monetary policy, global trade, and their own markets. Only investors in Australia and Japan managed to maintain their recent optimism, though without further gains. The weakening Yen against the US dollar and the perception that Japan will benefit from the US’s trade policy of decoupling supply chains from China under the Trump administration continue to boost sentiment among Japanese investors. Sentiment in other markets ended the week in neutral, with only investors in the UK and Global Developed ex-US maintaining a positive outlook. In contrast, sentiment in China resumed its downward trend, weighed

The recent rise in sentiment that began in early September (excluding China) paused last week as investors tensely awaited the outcomes of the US Presidential election and the meeting of China’s Standing Committee. The previous week’s bullish mood among investors in Asia ex-Japan, Australia, Global Developed markets, Global Emerging markets, and the UK turned neutral ahead of these events, recognizing the binary nature of these potential outcomes. The US Election: Last week, the markets were weighed by anxiety about the US election, largely due to predictions of a very tight race by pollsters – the same ones who forecasted “Remain” and “Clinton” back in 2016. The combination of a deeply divided electorate, sharply contrasting visions from the candidates on America’s future, and the expecta

Investor sentiment saw a boost last week, with six out of the ten markets we track (Asia ex-Japan, Australia, Global Developed, Global Developed ex-US, Global Emerging, and the UK) closing the week on a bullish note. Japan’s sentiment was also positively influenced by a weakening Yen, nearly reaching bullish levels. In Europe, investors briefly turned bullish but ended the week with a neutral outlook. Meanwhile, sentiment in the US and China remained cautious due to upcoming significant events in these markets: the US elections and China’s Standing Committee meeting. Why are global investors so convinced (bullish) of a good outcome when local investors (US and China) are themselves unsure? The US Election: Investors globally have been increasingly positioning their portfolios for a Trump v

The reporting season and the US election will determine the markets. Major losses on the markets are not expected, but greater fluctuations. 28 October, 2024 FRANKFURT (Frankfurt Stock Exchange). Just over a week to go until the US election - but while the uncertainty on the bond markets is reflected in higher yields, the mood on the stock market remains positive. Although the DAX, S&P 500 and Dow Jones have not been able to continue their record run of late, they are not far below their all-time highs. On Monday morning, the DAX stood at 19,492 points after closing at 19,464 on Friday and reaching an all-time high of 19,674.70. The reporting season reaches a peak this week. In the USA, more than a third of the S&P 500 companies publish their figures, including Alphabet, Microsoft,

The improving macroeconomic environment, marked by lower inflation, reduced interest rates, and the absence of a recession across major economies, continues to support sentiment. Investors in Global Developed Markets are becoming bullish, while those in Global Emerging Markets and Asia ex-Japan are turning positive. However, sentiment in Japan, China, and the US remains affected by the uncertainty of their local political situations, including elections in Japan and the US, and the size of an eventual stimulus in China. Meanwhile UK investors remain bullish about their prospects. Japan: Investor sentiment in Japan declined from bullish to positive last week, ahead of the weekend’s general elections. The ruling LDP party’s newly elected leader and Prime Minister’s gamble backfired, with the

Investor sentiment ended the week bullish in Australia, Japan, and the UK, driven by rising gold prices, a weakening Yen, and decreasing inflation, respectively. In contrast, sentiment in China has turned negative following disappointing macroeconomic data last week. In the US, stronger-than-expected earnings have temporarily halted the decline in investor sentiment, preventing it from becoming bearish, but it remains in negative territory at the week’s end. Elsewhere, Asia ex-Japan, Global Developed and Emerging Markets, and Europe, sentiment remained neutral, possibly in a holding pattern for the rest of the year. This month, the Chinese authorities have shifted from trying to support the stock market ‘passive-aggressively’ to outright ‘aggressive-aggressively’. Unfortunately, their subs

Investor sentiment improved in Asia ex-Japan from bearish to negative, in Japan from neutral to positive, and in Australia and the UK from positive to bullish. Elsewhere, sentiment remained neutral except in the US, where it stayed negative. China: Sentiment in China continues to be driven by the policy response to the country’s declining growth prospects. Last Wednesday’s disastrous press conference by China’s main economic planning agency sent the wrong signal to investors, who responded by selling off recently purchased stocks. Saturday’s press conference by the Ministry of Finance was also long on promises but short on specifics, doing little to assuage investors’ angst. In late August, investors thought the authorities had  discovered that the economy had fundamental problems. It

Investor sentiment weakened slightly across Asia but remained mostly unchanged in Europe and the US, where investors stayed neutral ahead of the Q3 earnings season and the upcoming US elections in less than a month. China was closed for a week-long national holiday and will reopen on Tuesday. In China, the speculative rally driven by cash injections, margin calls, and share buy-backs is likely to resume in the short-term. However, investors will be closely watching this week’s press conference by China’s top economic planning agency for details on the multiple stimuli announced ten days ago. Simply injecting new money into old problems won’t change China’s negative economic fundamentals. Investors will need to see a political commitment to realigning economic resources and a credible rescu

Last week, investor sentiment remained steady, balancing positive developments from China and encouraging inflation news from the US and Europe against deteriorating situations in Ukraine and the Middle East. Chinese authorities have finally detailed their stimulus package, but it seems to be addressing the wrong problem - feeding a non-hunting bear instead of a starving wolf. This suggests that further measures will be needed soon. Japan has a new Prime Minister (candidate) which should maintain the status quo with the US and China. And in the US and Europe, investors appear to have shrugged off the positive inflation news, shifting their focus to unemployment and overall economic health. As a result, a miss on this Friday’s Jobs report is expected to have a greater impact than previous o

Investor sentiment remained stable last week, with notable exceptions in Asia ex-Japan and Europe, where the outlook shifted slightly from bearish to negative. In Global Emerging Markets, sentiment improved from negative to neutral, while in Japan, the weakening Yen contributed to a positive mood among investors. Chinese investors have once again become hopeful on talks of yet another stimulus package. However, the disparity between potential supply and demand for risk continues to be quite negative in Global Developed Markets, Global Developed ex-US Markets, and Europe, making these markets susceptible to overreactions in case of any negative developments. Over the past two weeks, the Fed, ECB, BoE, and BoJ all made interest rate decisions that aligned with investors’ expectations, helpin

This week, investors’ mood remained largely stable, with a bearish outlook persisting in Asia excluding Japan, Global Developed excluding the US, and Global Emerging markets. Sentiment stayed negative in Global Developed markets and Europe, while Japan and the US maintained their neutral stance. The recently positive mood in China endured another week, while investors in Australia recovered their bullish feeling last seen in July. The large dispersion in investor sentiment across the world reflects the prevailing uncertainty, fueled by inconsistent economic indicators and a packed schedule of forthcoming events. These include crucial interest rate decisions from the ECB and the Fed, set to take place this month, amidst ongoing geopolitical tensions in Gaza and Ukraine, and a too-close-to-c