Quarterly Outlook
Q4 Outlook for Investors: Diversify like it’s 2025 – don’t fall for déjà vu
Jacob Falkencrone
Global Head of Investment Strategy
Access both platforms from your single Saxo account.
London Quick Take – 24 Oct -Stocks rise as markets eye Trump-Xi meeting, tech gains and CPI ahead
Neil Wilson
Investor Content Strategist
Note: This is marketing material. This article is not investment advice, capital is at risk.
Key Points
- Trade hopes rise on planned Trump-Xi meeting next week
- Wall Street rallies and Asian shares climb, led by tech
- Natwest leads the way as FTSE 100 hits a record high
- Gold looks to retest $4k
Wall Street rallied and Asian stocks firmed up overnight after it was confirmed that US President Donald Trump will meet Chinese President Xi Jinping next week as part of a trip to Asia. The S&P 500 closed out 0.58% higher on the day, led by gains for tech, with stocks hitting session highs on news of the meeting, which seems to point to a potential detente. Momentum stocks – which were subject to a big unwind on Wednesday – rallied, led by quantum stocks. A bit slow at first to respond but quantum stocks (Rigetti, D-Wave, IonQ etc) did race higher on reports of the US government taking equity stakes. Ford beat but fell. IBM also fell despite beating earnings expectations as software revenues were just in-line.
Overnight we have strong flows in tech names. South Korea’s Kospi hit a record high – it's the best-performing major equity index this year. The latest bump up came as chipmaker SK Hynix rallied over 6% as it provided a strong Q3 outlook. A big boost for Chinese tech names lifted Shanghai to a 10-year high as China’s latest plenum reaffirmed plans to become more self-reliant on tech and boost consumption (same old, but taken positively). The Nikkei climbed over 1.3% as the yen fell.
So on the face of things good news on trade is supporting risk sentiment across the board into the weekend. But given this is Trump and brinkmanship goes hand in glove with showmanship, talks with Xi could go either way. And indeed the trade picture is not so optimistic everywhere we look. The Canadian dollar fell after Trump said he would halt all trade negotiations with the country following an anti-tariff advertisement funded by the government of Ontario.
Trump railed against the ‘fake’ ad featuring Ronald Reagan speaking badly about tariffs, posting on his Truth Social: “They only did this to interfere with the decision of the U.S. Supreme Court, and other courts. TARIFFS ARE VERY IMPORTANT TO THE NATIONAL SECURITY, AND ECONOMY, OF THE U.S.A. Based on their egregious behavior, ALL TRADE NEGOTIATIONS WITH CANADA ARE HEREBY TERMINATED.”
After an upbeat start following the positive handover from Asia, European stock markets have turned south after the first hour of trading - lots of moving parts.
Attention shifts to a delayed inflation report from the US, which will be released later today and is a key piece of data for the Federal Reserve meeting next week. Headline CPI is seen rising to 3.1% from 2.9% and core CPI inflation steady at 3.1%. It seems unlikely that anything will seriously dissuade the market from believing that a cut next week is assured, but a hotter-than-expected reading could impact perceptions about any further cuts beyond.
Quick look at FX, where we have seen a bit of motion at last. The yen weakened despite Japanese inflation rising, with USDJPY pushing the 153 level. GBPUSD seems to have found a base at 1.330 which has been tested and held the last two days – look for this to hold today at the close. DXY made steady progress but seems to have found a near-term ceiling at 99.
Elsewhere, gold and oil have both pulled back a bit this morning, while bitcoin is higher. Spot gold has found a bit of near-term resistance around the $4,150 level and has pulled back under $4,070 this morning – seems to maybe want retest the key support at $4k. Meanwhile, gold buying has boosted UK retail sales figures - that and the iPhone 17.
The FTSE 100 rose to a fresh record high above 9,600 as Natwest provided the latest lift to the blue chips. We'd hit an intraday record on Thursday, driven by oil stocks as crude prices surged on US sanctions on Russian oil majors Lukoil and Rosneft, while upbeat results from Rentokil and LSEG contributed the upbeat session. Index heavyweights Shell and BP climbed around 3% as crude prices extended their gains. Fresnillo and Endeavour Mining rallied as gold recovered its poise, but are pulling back this morning as gold retreats. Burberry jumped yesterday as Gucci-owner Kering surged in Paris to give luxury stocks some added lustre. It's really not a huge leap to 10k and I'd not be surprised to see 12k by the middle of next year.
Brent (continuous contract) has hit the 50-day line and come off but seems to be supported by the 20-day now. Bullish MACD crossover favours the upside.
Overnight we have strong flows in tech names. South Korea’s Kospi hit a record high – it's the best-performing major equity index this year. The latest bump up came as chipmaker SK Hynix rallied over 6% as it provided a strong Q3 outlook. A big boost for Chinese tech names lifted Shanghai to a 10-year high as China’s latest plenum reaffirmed plans to become more self-reliant on tech and boost consumption (same old, but taken positively). The Nikkei climbed over 1.3% as the yen fell.
So on the face of things good news on trade is supporting risk sentiment across the board into the weekend. But given this is Trump and brinkmanship goes hand in glove with showmanship, talks with Xi could go either way. And indeed the trade picture is not so optimistic everywhere we look. The Canadian dollar fell after Trump said he would halt all trade negotiations with the country following an anti-tariff advertisement funded by the government of Ontario.
Trump railed against the ‘fake’ ad featuring Ronald Reagan speaking badly about tariffs, posting on his Truth Social: “They only did this to interfere with the decision of the U.S. Supreme Court, and other courts. TARIFFS ARE VERY IMPORTANT TO THE NATIONAL SECURITY, AND ECONOMY, OF THE U.S.A. Based on their egregious behavior, ALL TRADE NEGOTIATIONS WITH CANADA ARE HEREBY TERMINATED.”
After an upbeat start following the positive handover from Asia, European stock markets have turned south after the first hour of trading - lots of moving parts.
Attention shifts to a delayed inflation report from the US, which will be released later today and is a key piece of data for the Federal Reserve meeting next week. Headline CPI is seen rising to 3.1% from 2.9% and core CPI inflation steady at 3.1%. It seems unlikely that anything will seriously dissuade the market from believing that a cut next week is assured, but a hotter-than-expected reading could impact perceptions about any further cuts beyond.
Quick look at FX, where we have seen a bit of motion at last. The yen weakened despite Japanese inflation rising, with USDJPY pushing the 153 level. GBPUSD seems to have found a base at 1.330 which has been tested and held the last two days – look for this to hold today at the close. DXY made steady progress but seems to have found a near-term ceiling at 99.
Elsewhere, gold and oil have both pulled back a bit this morning, while bitcoin is higher. Spot gold has found a bit of near-term resistance around the $4,150 level and has pulled back under $4,070 this morning – seems to maybe want retest the key support at $4k. Meanwhile, gold buying has boosted UK retail sales figures - that and the iPhone 17.
The FTSE 100 rose to a fresh record high above 9,600 as Natwest provided the latest lift to the blue chips. We'd hit an intraday record on Thursday, driven by oil stocks as crude prices surged on US sanctions on Russian oil majors Lukoil and Rosneft, while upbeat results from Rentokil and LSEG contributed the upbeat session. Index heavyweights Shell and BP climbed around 3% as crude prices extended their gains. Fresnillo and Endeavour Mining rallied as gold recovered its poise, but are pulling back this morning as gold retreats. Burberry jumped yesterday as Gucci-owner Kering surged in Paris to give luxury stocks some added lustre. It's really not a huge leap to 10k and I'd not be surprised to see 12k by the middle of next year.
Brent (continuous contract) has hit the 50-day line and come off but seems to be supported by the 20-day now. Bullish MACD crossover favours the upside.
Latest Market Insights
Quarterly Outlook
-
-
Quarterly Outlook
Q4 Outlook for Traders: The Fed is back in easing mode. Is this time different?
John J. Hardy
Global Head of Macro Strategy
The Fed launched a new easing cycle in late Q3. Will this cycle now play out like 2000 or 2007? -
Quarterly Outlook
Q3 Investor Outlook: Beyond American shores – why diversification is your strongest ally
Jacob Falkencrone
Global Head of Investment Strategy
-
Quarterly Outlook
Q3 Macro Outlook: Less chaos, and hopefully a bit more clarity
John J. Hardy
Global Head of Macro Strategy
After the chaos of Q2, the quarter ahead should get a bit more clarity on how Trump 2.0 is impacting... -
Quarterly Outlook
Equity outlook: The high cost of global fragmentation for US portfolios
Charu Chanana
Chief Investment Strategist
-
Quarterly Outlook
Commodity Outlook: Commodities rally despite global uncertainty
Ole Hansen
Head of Commodity Strategy
-
Quarterly Outlook
Upending the global order at blinding speed
John J. Hardy
Global Head of Macro Strategy
We are witnessing a once-in-a-lifetime shredding of the global order. As the new order takes shape, ... -
Quarterly Outlook
Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever
Jacob Falkencrone
Global Head of Investment Strategy
-
Quarterly Outlook
Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?
John J. Hardy
Global Head of Macro Strategy
-
Quarterly Outlook
Equity Outlook: The ride just got rougher
Charu Chanana
Chief Investment Strategist