Developed market equities advanced, boosted by strong earnings and some speculation of rising interest rates, while emerging markets hit a bumpy patch. This week brings Flash PMI data from across the globe, which could show widespread declines in the Services sector reading, despite strong Manufacturing indicators.

The UN Climate Change Conference produced a raft of headlines and pledges, some positive and some not. The US and China agreed to co-operate faced with an ‘existential crisis’. But more ambitious targets are needed from the world’s biggest car manufacturers.

Headlines were dominated by sharp jumps in inflation around the world, as well as the COP26 climate change summit, where an agreement was reached on limiting greenhouse gas emissions. This week President Biden’s Infrastructure bill will be signed into law and further data releases could indicate persistent inflationary pressures.

Financial markets were in a buoyant mood, as the US Federal Reserve confirmed tapering of its pandemic-era stimulus, with immediate effect. Pledges from world leaders at the UN Climate Change Conference, or COP26, covered deforestation, as well as methane and coal production.

US equity markets hit new highs, as Q3 earnings reports beat estimates and Microsoft regained the title of world’s biggest public company. This week could bring an announcement on tapering from the US Federal Reserve, an interest rate hike from the Bank of England and a raft of macroeconomic data for October. 

Weaker industrial production data from the US and China reflected supply chain disruption, while US inflation forecasts crept higher. We review expectations for the COP26, or UN Climate Change Conference, which begins this week.

Soaring energy prices have added to the list of this year’s inflationary pressures. At the same time, the Delta variant and falling consumer confidence have caused growth forecasts to be cut.

US equity markets were boosted by strong Q3 earnings reports from major banks, in spite of indications of ‘stagflation’ (slowing growth and rising inflation) from various macroeconomic sources. This week brings Flash PMI data from the major economies, which could offer further evidence of a decline in growth momentum.

US employment data dominated the agenda, eventually falling short of forecasts and prompting questions over the US Federal Reserve’s tapering plans. This week expectations for US Q3 earnings reports are positive, but the rate of growth is unlikely to match the phenomenal second quarter.

Financial markets closed out September in downbeat mood, troubled by fears of stagflation (declining growth and rising inflation) and persistent uncertainty as to the future of Chinese property giant Evergrande. 

Two big stories dominated financial markets last week: the hawkish shift in US Federal Reserve rhetoric; and the continuing meltdown at Chinese property giant Evergrande.

A combination of the Delta variant, supply chain friction and weaker consumer confidence, has hit growth momentum around the world. Has the recovery been derailed or just delayed?