Market sentiment: RiskOn – 2 days
Recap of the past week:
The most pivotal week of the year, the U.S. elections, has concluded. As expected, Donald Trump’s victory propelled markets aggressively to new all-time highs. The Fed contributed by lowering rates by the anticipated 0.25%, clearing the path for further market gains. Moving forward, it’s likely we’ll return to business as usual, with a focus on macro data and the remaining earnings. Market sentiment indicator remained in positive RiskOn territory, mainly thanks to the outcome of US elections.
Outlook for the following week:
Let’s have a look at the following week from the economic calendar perspective:
On Monday, markets will remain closed for Veterans Day, allowing traders to digest last week’s events. Key macro data includes New Zealand inflation and soft indicators from China.
Tuesday will shift attention primarily to European data, with updates on German inflation revisions and fresh UK labor market figures. During the U.S. session, Fed members Waller and Barkin will deliver some remarks.
Wednesday, the week’s main macro day, brings the much-anticipated U.S. CPI. Markets will be closely watching Core CPI, which was at 3.3% last month, with expectations holding steady at 3.3%. Should Core CPI rise above this, a touch of market nervousness may ensue. With inflationary pressures expected under Trump’s new plans, a rising trend would not bode well for markets. Later in the session, Fed officials Logan, Schmid, and Musalem are set to speak.
Thursday kicks off with Australian labor data, followed by the first Q3 EU GDP estimate, expected to hold at +0.4% QoQ. The U.S. session will focus on the weekly job market overview and the latest PPI figures, with Fed Chair Jerome Powell concluding the day with remarks.
Friday promises a lively end to the week with data from China, including Industrial Production and Retail Sales. Markets will be eager to see if Retail Sales show recovery following recent rate cuts and monetary easing; disappointment could weigh heavily. In the EU session, UK’s Q3 GDP estimates will take center stage, while the U.S. session will feature the NY Empire State Manufacturing Index and U.S. Retail Sales.
Long-term sentiment
After pre-election jitters, market sentiment has returned to a strong RiskOn environment (see more on waves statistics). We expect macro events to draw more attention, and if data meets expectations, further market growth is likely. At moodix, we’ll be particularly focused on the tech sector, given its index weight and the early signs of new tariffs on China. How the market prices in these risks will be critical, especially as we anticipate Trump to take an even tougher stance than in his first term. The tech sector could face considerable pressure throughout 2025. Regardless of potential risks, we’ll continue seeking long RiskOn opportunities.
Good luck! Team moodix!
