Editor's PiCK
'US-China summit→FOMC→earnings season'…a busy week [New York·Shanghai markets]
Summary
- This week, global financial markets could see significant volatility in the New York and Shanghai stock markets depending on the outcome of the U.S.-China summit.
- At the FOMC meeting, investors' main concerns are the Fed's assessment of the economy and whether it will cut interest rates amid the absence of economic indicators.
- It reported that the AI investment results of major tech companies such as Microsoft, Meta, Alphabet, Apple, and Amazon, and China's manufacturing PMI release are expected to have a major impact on the market.
New York and Shanghai markets on edge ahead of Trump–Xi meeting
Economic indicators in the dark amid prolonged shutdown…Fed's assessment is the gauge
MS, Meta, Alphabet, Apple, Amazon earnings awaited…Attention on AI investment results
China PMI contracts for sixth month…Will it escape 'tariff and weak domestic demand' in October?
This week, global financial markets are focused on the summit between the United States and China. U.S. President Donald Trump and Chinese President Xi Jinping will hold talks on the sidelines of the Asia-Pacific Economic Cooperation (APEC) leaders' meeting in Busan on the 30th. Depending on the messages that come out of the talks, the New York and Shanghai stock markets could fluctuate significantly.
Alongside the U.S.-China summit, another focus for the market is the U.S. Federal Open Market Committee (FOMC) meeting held on the 28th–29th. With major economic data releases suspended due to the temporary federal government shutdown, how the U.S. central bank (the Fed) assesses the economic trajectory will be the key point to watch. The market expects the federal funds rate to be cut by 0.25 percentage points at this meeting.
The shutdown has been ongoing since the 1st of this month. However, if it is lifted, a preliminary estimate of third-quarter gross domestic product (GDP) is scheduled to be released on the 30th, and the September personal consumption expenditures (PCE) index on the 31st.
This week, earnings from five of the 'Magnificent 7 (M7)' major tech companies will also be released. Microsoft (MS), Meta (Facebook's parent company), and Alphabet (Google's parent company) will report on the 29th, while Apple and Amazon will report on the 30th. Wall Street is paying attention to the scale of these companies' artificial intelligence (AI)-related capital expenditures (CAPEX) and their results.
In China, the October manufacturing purchasing managers' index (PMI) will be released on the 31st. Manufacturing activity improved slightly last month due to seasonal factors, but it has still not escaped a contractionary phase for six consecutive months, continuing the longest slump since 2019. It is being watched whether this indicator will signal an escape from weak domestic demand and U.S. tariff pressure or point to a prolonged downturn.
Reporter Im Da-yeon allopen@hankyung.com
Korea Economic Daily
hankyung@bloomingbit.ioThe Korea Economic Daily Global is a digital media where latest news on Korean companies, industries, and financial markets.
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