In summary
- A volatile week of shutdown jitters and tech tremors
- Mixed jobs signals amid data drought
- The week ahead
- Navigating policy uncertainty
A volatile week of shutdown jitters and tech tremors
Last week saw markets whipsaw through volatility as the US government shutdown dragged into record territory, private jobs data sent mixed signals, and Big Tech faced a reality check on valuations. Equities ended broadly lower, with the S&P 500 down -1.63% and the Nasdaq tumbling -3.04%, which was its worst weekly performance since Liberation Day. The shutdown, now the longest in US history, amplified uncertainty by delaying official economic data releases and forcing investors to lean on noisy private indicators. Tech-heavy indices bore the brunt, as the Magnificent 7 shed -3.21%. Yet glimmers of hope emerged late on Friday, with progress on Capitol Hill lifting sentiment and easing volatility from midweek peaks. Commodities were hit too, with Brent crude oil slipping -2.21% to US$63.63 per barrel.
Mixed jobs signals amid data drought
The week’s economic spotlight fell on conflicting payroll reports from private sources, underscoring the shutdown’s disruptive toll. Mid-week’s Automatic Data Processing (ADP) print surprised to the upside with +42,000 jobs added in October, beating estimates of +30,000 and rebounding from September’s -29,000 slump. Meanwhile the Institute for Supply Management (ISM) Services Index climbed to 52.4, its highest level in months, on a surge in new orders to 56.2. These resilient readings tempered recession fears. However, the mood soured later in the week as Challenger job cuts rocketed +175% year-on-year to 153,074, which was the worst October in over two decades. Additionally, Revelio Labs pegged private payrolls at 9,100, dragged by government furloughs. With official non-farm payrolls delayed, these conflicting signals left markets on edge, amplifying volatility and reviving debates over the US labour market’s underlying strength.
The week ahead
Resolution of the US government shutdown takes centre stage, with a Senate procedural vote advancing a funding bill over the weekend—backing full-year support for agencies like Agriculture and Veterans Affairs, and a short-term extension for others to 30 January. Polymarket now prices a 98% chance of an end by month’s close, potentially unleashing a deluge of pent-up data, including September’s employment report. In Europe, the UK’s third-quarter Gross Domestic Product (GDP) lands on Thursday, alongside labour market figures on Tuesday, offering clues on the post-Budget trajectory. Investors will also eye any fallout from the Supreme Court’s tariff hearing, where justices signalled scepticism over President Trump’s emergency powers, potentially reshaping trade tensions if lower-court blocks hold.
Navigating policy uncertainty
The US government shutdown saga, coupled with scrutiny on tariffs, highlights the precarious balance investors must strike amid policy crosswinds. In terms of central banks, US Federal Reserve speakers like Goolsbee and Daly struck cautious tones on easing, while the Bank of England’s 5-4 hold at 4%—with Governor Bailey deeming September’s 3.8% inflation was ‘likely the peak’—signalled a dovish tilt that eased gilt yields. Yet reliance on private data proxies risks market overreactions, as seen in the week’s tech-led selloff. We view this volatility as a reset rather than a beginning of a bear market as earnings outside Big Tech remain robust, and shutdown relief could catalyse a rebound. Still, with indices near highs and fiscal gridlock lingering, vigilance on breadth and policy pivots remains key to steering through the choppy sea.
Contact us
0203 418 0257
info@onekc.co.uk
References
Source: https://www.brooksmacdonald.com/resources/insights/weekly-market-commentary
Weekly Market Commentary
In summary
A volatile week of shutdown jitters and tech tremors
Last week saw markets whipsaw through volatility as the US government shutdown dragged into record territory, private jobs data sent mixed signals, and Big Tech faced a reality check on valuations. Equities ended broadly lower, with the S&P 500 down -1.63% and the Nasdaq tumbling -3.04%, which was its worst weekly performance since Liberation Day. The shutdown, now the longest in US history, amplified uncertainty by delaying official economic data releases and forcing investors to lean on noisy private indicators. Tech-heavy indices bore the brunt, as the Magnificent 7 shed -3.21%. Yet glimmers of hope emerged late on Friday, with progress on Capitol Hill lifting sentiment and easing volatility from midweek peaks. Commodities were hit too, with Brent crude oil slipping -2.21% to US$63.63 per barrel.
Mixed jobs signals amid data drought
The week’s economic spotlight fell on conflicting payroll reports from private sources, underscoring the shutdown’s disruptive toll. Mid-week’s Automatic Data Processing (ADP) print surprised to the upside with +42,000 jobs added in October, beating estimates of +30,000 and rebounding from September’s -29,000 slump. Meanwhile the Institute for Supply Management (ISM) Services Index climbed to 52.4, its highest level in months, on a surge in new orders to 56.2. These resilient readings tempered recession fears. However, the mood soured later in the week as Challenger job cuts rocketed +175% year-on-year to 153,074, which was the worst October in over two decades. Additionally, Revelio Labs pegged private payrolls at 9,100, dragged by government furloughs. With official non-farm payrolls delayed, these conflicting signals left markets on edge, amplifying volatility and reviving debates over the US labour market’s underlying strength.
The week ahead
Resolution of the US government shutdown takes centre stage, with a Senate procedural vote advancing a funding bill over the weekend—backing full-year support for agencies like Agriculture and Veterans Affairs, and a short-term extension for others to 30 January. Polymarket now prices a 98% chance of an end by month’s close, potentially unleashing a deluge of pent-up data, including September’s employment report. In Europe, the UK’s third-quarter Gross Domestic Product (GDP) lands on Thursday, alongside labour market figures on Tuesday, offering clues on the post-Budget trajectory. Investors will also eye any fallout from the Supreme Court’s tariff hearing, where justices signalled scepticism over President Trump’s emergency powers, potentially reshaping trade tensions if lower-court blocks hold.
Navigating policy uncertainty
The US government shutdown saga, coupled with scrutiny on tariffs, highlights the precarious balance investors must strike amid policy crosswinds. In terms of central banks, US Federal Reserve speakers like Goolsbee and Daly struck cautious tones on easing, while the Bank of England’s 5-4 hold at 4%—with Governor Bailey deeming September’s 3.8% inflation was ‘likely the peak’—signalled a dovish tilt that eased gilt yields. Yet reliance on private data proxies risks market overreactions, as seen in the week’s tech-led selloff. We view this volatility as a reset rather than a beginning of a bear market as earnings outside Big Tech remain robust, and shutdown relief could catalyse a rebound. Still, with indices near highs and fiscal gridlock lingering, vigilance on breadth and policy pivots remains key to steering through the choppy sea.
Contact us
0203 418 0257
info@onekc.co.uk
References
Source: https://www.brooksmacdonald.com/resources/insights/weekly-market-commentary
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