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Key takeaways

Following six weeks of consecutive rises, the S&P 500 fell back last week as investors recalibrated the outlook for interest rates, with Friday’s October jobs report keenly awaited. Across Europe, shares weakened.

Bond yields rise sharply as US election draws near
US government bond yields continued to rise (and prices, which move inversely to yields, fell), as investors reduced expectations for how much central banks, notably the US central bank, will cut rates. As well as the release of upbeat economic data possibly weakening the case for additional near-term interest rate cuts, some investors believe that the very high levels of US national debt, currently $35.8 trillion, may force US interest rates to increase as investors will need a higher payout to compensate for the weak state of the federal government’s finances. Manifesto proposals by US presidential candidates Donald Trump and Kamala Harris are both expected to increase the US national debt.

European economies in the doldrums
Private sector survey data (purchasing managers indices) across the Eurozone for October shows that the region’s economic activity continued to ease. The 49.7 figure was below the 50 point mark separating growth from contraction, and reflected a poor performance in the manufacturing sector. This was only marginally compensated by the services sector, which although it was in positive territory, continued to weaken to an eight-month low. The economic backdrop in the UK was similarly downbeat, with the important services sector weakening and barely growing. The risks to economic growth in the UK remain to the downside, and suggest the Bank of England may be forced to cut interest rates by more than what is currently being anticipated, in an effort to stimulate economic output.

Market moves

  • Most global stock markets finished lower last week, with larger company shares generally holding up better than those of smaller companies.

  • EV manufacturer Tesla delivered its second best daily performance, rising 22% following strong third quarter results and an upbeat 2025 delivery outlook.

  • Bonds continued their recent sell-off, with US government bonds particularly hard hit.

  • Oil prices rose slightly but remain well down from recent highs. Gold reached a new intraday record high, while silver rose to a 12-year high.

What to look out for this week

  • Five companies accounting for about one-quarter of the total market value of the S&P 500 (Alphabet, Microsoft, Meta, Apple and Amazon) will report third-quarter earnings.

  • In the UK, the focus will be on the Autumn Budget on Wednesday – the Labour Government's first budget in almost 15 years.

  • On Thursday, the US central bank’s preferred inflation measure, the Personal Consumption Expenditures Price Index will be released.

  • On Friday, October’s US jobs report will be released. In the previous month, the number of jobs created rose by 254,000, much higher than expected.

Important Information

Handelsbanken Wealth & Asset Management Limited is authorised and regulated by the Financial Conduct Authority (FCA) in the conduct of investment and protection business, and is a wholly-owned subsidiary of Handelsbanken plc. For further information on our investment services go to wealthandasset.handelsbanken.co.uk/important-information. Tax advice which does not contain any investment element is not regulated by the FCA. Professional advice should be taken before any course of action is pursued.

All commentary and data is valid, to the best of our knowledge, at the time of publication. This document is not intended to be a definitive analysis of financial or other markets and does not constitute any recommendation to buy, sell or otherwise trade in any of the investments mentioned. The value of any investment and income from it is not guaranteed and can fall as well as rise, so your capital is at risk.

We manage our investment strategies in accordance with pre-defined risk objectives, which vary depending on the strategy’s risk profile.

Portfolios may include individual investments in structured products, foreign currencies and funds (including funds not regulated by the FCA) which may individually have a relatively high risk profile. The portfolios may specifically include hedge funds, property funds, private equity funds and other funds which may have limited liquidity. Changes in exchange rates between currencies can cause investments of income to go down or up.

This document has been issued by Handelsbanken Wealth & Asset Management Limited. For Handelsbanken Multi Asset Funds, the Authorised Corporate Director is Handelsbanken ACD Limited, which is a wholly-owned subsidiary of Handelsbanken Wealth & Asset Management, and is authorised and regulated by the Financial Conduct Authority (FCA). The Registrar and Depositary is The Bank of New York Mellon (International) Limited, which is authorised by the Prudential Regulation Authority and regulated by the FCA. The Investment Manager is Handelsbanken Wealth & Asset Management Limited, which is authorised and regulated by
the FCA.

Before investing in a Handelsbanken Multi Asset Fund you should read the Key Investor Information Document (KIID) as it contains important information regarding the fund including charges and specific risk warnings. The Prospectus, Key Investor Information Document, current prices and latest report and accounts are available from the following webpage: wealthandasset.handelsbanken.co.uk/fund-information/fund-information/, or you can request these from Handelsbanken Wealth & Asset Management Limited or Handelsbanken ACD Limited: 77 Mount Ephraim, Tunbridge Wells, Kent, TN4 8BS or by telephone on
+44 01892 701803.

Registered Head Office: No.1 Kingsway, London WC2B 6AN. Registered in England No: 4132340

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