In this weekly market outlook, the presenter walks through the current UK‑US 10‑year government bond yield spread, noting its recent narrowing as UK yields fall and the pound strengthens following Chancellor Jeremy Hunt’s fiscal U‑turn. He previews a packed earnings calendar with 66 S&P 500 companies—including Goldman Sachs, Tesla, J&J, Netflix, ASML, AT&T, Blackstone, Snap, and Schlumberger—highlighting sectors and key names to watch. A detailed look at Goldman Sachs’ restructuring is provided, explaining the consolidation of its investment‑banking and trading units and the merging of asset‑wealth management with the under‑performing consumer banking division, aimed at reducing reliance on volatile trading revenue. The video then shifts to UK domestic politics, emphasizing Hunt’s upcoming statements on fiscal sustainability, his planned full fiscal plan for October 31, and the broader uncertainty surrounding former Chancellor Liz Truss and Conservative leadership. The Bank of England’s Governor Andrew Bailey’s recent hawkish remarks are discussed, signalling potential further rate hikes amid persistent inflation, while the BoE’s reassurance about market facilities is noted. The presenter also mentions Chinese state‑bank intervention to support a weakening yuan via large‑scale dollar sales and swaps. Finally, a comprehensive economic data calendar is outlined, covering US manufacturing, housing, Fed Beige Book, and speaker events, Chinese GDP and retail figures, and UK CPI expectations (headline ~10% YoY, core ~6.4%, the highest since 1992). The segment concludes with a call to like, subscribe, and stay tuned for updates on Hunt’s statements.
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Hello and welcome back to the outlook for the week ahead in global markets. And just to give you a bit of a flavor what I'm going to talk about, we're looking here on this chart at the UK-US 10-year government bond yield spread. And as you can see, it's fallen because UK yields have dropped and the pound is stronger this morning after the fiscal U-turn once again under the newly appointed UK Chancellor Jeremy Hunt. So we'll talk about that more in a moment. He is also due to give a speech momentarily, so check the show notes for further updates as they come out. But other things are there's 66 S&P 500 companies reporting this week, including the likes of Goldman Sachs and Tesla, to name a few. So we'll delve into some of those, uh, top-tier names to look out for. We've also got Chinese currency interventions on the docket, hawkish comments out of the Bank of England governor over the weekend, and And then of course, what to look out for in economic data schedule for this week. But look, let's start with earnings for a bit of a change up and things start to step up a little bit in terms of the frequency of companies. As I mentioned, we've got 66 S&P and 8 of the Dow 30 components on the docket. And looking at this from a sector perspective, from banking names, you got the likes of, uh, Bank of America on Monday. Goldman's will pivot back to in a moment cuz there's been some other restructuring news for that firm, which we can also touch upon. Their numbers are out on Tuesday. In the pharma space, probably the main one to look out for is J&J on Tuesday. For entertainment names, Netflix, always of course a volatile and exciting one to watch in aftermarket trade, they'll be on Tuesday. Airliners, United Airlines, American Airlines on Tuesday and Thursday respectively. For the auto space, um, Tesla, and of course we'll be keeping a very close eye on them, one of the largest components of course in the likes of the S&P 500 and always a volatile reaction we typically see there. And then from chipmakers, ASML, telecoms, AT&T, private equity, you've got Blackstone coming on Thursday, for social media names, Snap, and then Schlumberger in the energy, oil and gas kind of infrastructure names coming out on Friday. So quite a few to look at. But let's just have a quick chat about Goldman's while we're here talking about single stock equities. And the reason why is because there's been a big piece out in the Wall Street Journal over the weekend about a major reshuffle happening at the bank in terms of folding some of its biggest businesses into 3 defined divisions. And what that's going to look like is the fact that they're going to roll up, basically combining their flagship investment banking division with their trading business. Into one unit while merging asset and wealth management into another. Consumer banking, which was launched in 2016, has had a bit of a struggle and it hasn't really gained too much traction, perhaps as much as they had hoped for. And so actually that's going to be brought into the asset and wealth management combined division as well. A lot of this movement overall from a top level in terms of rationale for the restructuring comes as the bank has sought to cut its reliance on volatile trading and investment banking revenues by boosting its fee-based businesses. And, you know, we've seen this obviously evident in a lot of the more purist investment banking names who reported last week, of course, with a big disparity that we're seeing in the IBD to trading divisions at this present point in time. It's looking to, to counteract that. Their earnings, as I said, are due on the 18th, so tomorrow, that's Tuesday of this week. But let's jump to the kind of more domestic situation if you're based here in the UK, and main focus, of course, a lot of news flow on the future for Liz Truss. But at the moment, the UK markets are acting in a positive fashion. As I said, the pound is up, yields are down. So it's the opposite of some of the dramatic moves that we're seeing after the initial UK mini-budget. But I must say, it's early days and lots of details still to come. The Chancellor, Jeremy Hunt, will make a statement mid-morning. So expecting that by the time you watch this, the details might already have been released. So I'll make sure to update the comments section on this video. But he's going to talk about measures to support importantly, fiscal sustainability. He's then gonna speak in the House of Commons after that statement later on today at around 3:30 London time to really just make formal those latest commitments. The Chancellor's also spoke to the Bank of England Governor Andrew Bailey. He's also spoke to the Debt Management Office head as well over the weekend, intends to deliver a full fiscal plan on October 31st. So really has been busy going to work to hit the ground running. He's done a pretty good job of it, to be fair. So far, and the markets are kind of reflecting that as he's tried to assure about the sustainability path of UK finances. Since taking over the Treasury 3 days ago, it's obviously— it's a radically different fiscal plan to what Truss had originally set out just around a week or 2 ago, which is why there's a lot of question marks about the longevity, if she can hold on to Conservative leadership at this point in time. So that's something that's going to be in flux and something certainly which we'll be watching throughout the rest of this week for sure. Lots of rumor-mongering is almost certain to be apparent. Truss is to host a reception of the cabinet at Number 10 Downing Street later on today. They're going to continue to put input into the medium-term fiscal plan, according to people familiar with the matter. Separately, the Bank of England has moved to reassure basically markets. This is a headline here. They came out very early this morning and it wasn't anything new. Again, it's this kind of confidence by repetition in terms of what they were saying after they ended that exercise of emergency measures to counteract particularly some of the liquidity difficulties of pension funds in the prior week in the aftermath of the mini-budget. So they came out and just told investors once again that there's facilities open to backstop jittery markets. After that emergency gilt purchase program was wound up on, on Friday. But one of the other things that happened at the weekend was commentary out of the Bank of England Governor Bailey. Interest rates will have to rise higher than initially hoped in the face of inflationary pressures, he said at the weekend. So again, this is just adding to a little bit of the overall perception that the Bank of England might need to move more aggressively at this point in time. And as I'll mention in a moment, we are going to get UK inflation metrics later on this week. Bailey did say, and perhaps one of the main take-homes here was an indirect way of talking to markets. He said, I can tell you there is a very clear and immediate meeting of minds on the importance of stability and sustainability. That was him referencing his calls with Jeremy Hunt over the weekend, and markets have, have liked that for now. Some of the other things to just quickly talk about, one about Chinese state banks overnight, they said to have stepped up their intervention of a defending a weakening yuan on Monday, with banking sources telling Reuters that those banks sold a high volume of US dollars and used a combination of swap and spot trades. So this is not uncommon, it's happened before. They've really delved into their war chest going through the hard landing fear downturn of 2015. So it's not like this sort of stuff hasn't happened before. And of course, in the context of a very rampant dollar we've seen of late with of US-based tightenings on the horizon, but something of course just to be aware of that is going on at this present point in time. Taking a look at the week ahead as a whole, um, today one of the main things looking out for is Jeremy Hunt's statement shortly, UK Chancellor, just to outline perhaps a few final points about what's been mentioned so far about further reversals on those planned tax cuts. And then you've also got Empire Manufacturing coming out the US later on this afternoon, probably the highlight for today. And then Tuesday, just running through US first, industrial production on Tuesday, US building permits, housing starts, and the Fed's Beige Book come on Wednesday alongside some Fed speakers in the likes of Kashkari, Evans, and Bullard all on the docket. And then you get US existing home sales, weekly jobs claims going to come on Thursday. That's kind of your US mix. On Tuesday from China, you can see here you get GDP, retail sales, industrial production, fixed asset investments. So some interesting data to wake up to here in the UK by this time tomorrow. And then in the UK, as I mentioned, CPI is going to be a key figure. Headline expected to come in at 10% year on year. That would be a slight higher number than the 9.9% we saw for the month of August. The core inflation reading, of course, ex-food and energy, will be closely watched by policymakers as to the extent of of, uh, to which high energy prices becoming entrenched in the economy. And for that point, much like we saw previously in last week in the US CPI reading, the core reading in the UK is expected to tick up to 6.4%. And if that is the case, that would be the highest reading since 1992. Um, that is it for the time being. So, uh, don't forget to like and subscribe to the channel, be very much appreciated. We've got lots more videos to come throughout the week. Feel free to drop me a comment if you have any questions. And as I said, I'll have a bit of a rolling headline update on what Jeremy Hunt says as it happens later on this morning. Okay, have a good week ahead and stay safe.
