Macro update
Japanese equities soar on political optimism:
Japan’s Nikkei 225 jumped 5% to a record high above 48,000 after Sanae Takaichi’s leadership victory boosted expectations for fresh fiscal stimulus and a delay in Bank of Japan (BoJ) rate hikes.
Shutdown impact seen as limited:
Analysts expect the US government shutdown to have little effect on the equity rally that has driven the S&P 500 to repeated record highs.
Earnings season ahead:
Levi Strauss and Delta Air Lines are set to report this week, with third-quarter (Q3) S&P 500 earnings projected to climb 8.8% year-on-year (YoY).
Fed minutes in focus:
Minutes from the Federal Reserve’s (Fed) September meeting, due Wednesday, will shed light on policymakers’ views following last month’s rate cut.
Seasonal support for stocks:
Historically, the fourth quarter (Q4) has been the S&P 500’s strongest, delivering average gains of around 2.9% since 1928.
Government shutdown under scrutiny:
Investors remain attentive to the ongoing US government shutdown, which could delay key economic releases and complicate the Fed’s policy outlook.
FTSE 100 flirts with 9,500 record
The FTSE 100 remains in record highs close to the 9,500 mark. Above it beckons the major psychological 10,000 level.
Immediate upside pressure will be maintained while Thursday’s low at 9,416 holds. Below it lies minor support between the August 9,358 high and the 12 September peak at 9,340.
