This week global equity markets rallied over the week with the U.S. markets touching record highs. AI companies dominated the rally due to inter-company agreements. Pharmaceutical companies found relief from tariff fears due to Pfizer’s agreement with the Trump administration. Gold continued to rise. Global economic indicators, however, indicated the possibility of a global slowdown. 

In global geopolitics, the US government officially entered a shutdown on Tuesday for the first time in 7 years. The Trump administration also withdrew the nomination of E.J. Antoni who had earlier been selected for the position of Commissioner of the Bureau of Labor Statistics. In Japan, Sanae Takaichi was elected the leader of Japan’s ruling Conservative Party and very likely to become Japan’s first female Prime Minister, following a parliamentary vote on October 15. French Prime Minister Sebastien Lecornu submitted his resignation to President Emmanuel Macron.

Global Updates
  • The MSCI All Country World Index rose over the week, closely tracking the U.S. markets.
  • Canada’s Services PMI fell to 46.3 in September, marking the third consecutive month of contraction amid a decline in jobs.
  • In the European Union inflation is estimated to have risen to 2.2% in September due to higher energy costs. This exceeded the European Central Bank’s 2% inflation benchmark. 
  • Canadian rare earth company Lithium Americas’ stock rallied following the U.S. government’s acquisition of a 5% equity stake in the company. The government also acquired a 5% stake in the joint venture with General Motors
  • China has declined the purchase of American agricultural products until a trade agreement is finalized between the two countries. President Trump plans to discuss this with President Xi during APEC talks in South Korea. 
  • Precious metals rose in the commodities market, with Gold reaching close to the $4000 per ounce benchmark. 
  • Oil prices declined over the week on fears of oversupply by OPEC countries.
U.S. Equity
  • The S&P 500, Nasdaq, Dow Jones indices rose over the week to record highs despite a government shutdown mid-week. The market rally was driven by AI and pharmaceuticals. The Dow Jones Industrial Average also touched the 47,000 benchmark. President Trump has suggested laying off federal workers and defund federal programs in Democrat ruled states if the shutdown persists. The release of the monthly jobs report was also postponed to November due to the shutdown. 
  • The U.S. ISM Services PMI declined to 50.0 in September which signaled a stagnation in the service sector’s growth.
  • OpenAI became the world’s most successful startup reaching a valuation of $500 billion. Hitachi announced collaboration with OpenAI on energy projects, and Fujitsu with Nvidia.
  • Pharma stocks rose over the as President Trump moderated his tariff stance on pharmaceutical companies this week following Pfizer’s relief from import tariffs for three years in exchange for lowering drug prices for the Medicaid program. 
  • Harvard University arrived at an agreement with the Trump administration to invest $500 million in trade schools across the U.S.
Fixed Income
  • The Bloomberg U.S. Aggregate Bond Index rose over the week.
  • The U.S. 10-year Treasury yield edged lower to 4.119% and the yield on the 2-year note declined to 3.572% over the week. 
  • The U.S. Dollar Index recovered this week to appreciate to 97.72

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