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Weekly Outlook

Weekly Outlook 30 Oct 2023 – 5 Nov 2023

Weekly Commentary: 30 Oct 2023 – 5 Nov 2023

Major US equity benchmarks were negative for the past week. The US economy grew 4.9% in Q3 2023, the most since Q4 in 2021, above market expectations of 4.3% and 2.1% growth in Q2. Consumer spending remained strong as they rose 4%, up from just 0.8% in Q2. Still, rates are widely expected to hold steady at a 22-year high as the policymakers would likely need more time to assess the effect of their previous rate increases and the recent sharp sell-off in bond markets.

The ECB followed the Federal Reserve’s footsteps as they held interest rates steady, ending a historic run of 10 consecutive rate increases. The eurozone economy has been weakening as declining manufacturing output spills over to other sectors of the economy. Inflation across the eurozone has also declined to 4.3% in September from a peak of more than 10% last year. In spite of the weakness of the economy across the eurozone,  the banks are getting a boost with the rise of interest. Deutsche Bank forecasted its highest annual revenues for 8 years, Santander reported an increase in net profit of 20%, and Lloyds – often seen as a bellwether for the economy beat forecasts reporting Q2 profit before tax of $ 1.9 billion.

Stock returns were negative over the week as observed across the following 3 indices, with the Dow Jones Industrial Average (-2.14%), S&P 500 Index (-2.52%), and NASDAQ Composite Index (-2.62%). Other notable key market indices that generated negative returns are the MSCI AC ASEAN Index (-1.14%) & MSCI World (-2.11%). All S&P 500 sectors registered negative turns last week with notable sectors – Energy (-6.15%), Communication Services (-6.29%), and Health care (-3.87%) falling more than the rest of the sector. For 2022, index returns were negative for the Dow Jones Industrial Average (-8.78%), S&P 500 (-19.44%), and the NASDAQ Composite (-33.10%).

The yield-curve remains inverted as the 10Y-2Y US Treasury spread remained unchanged for the week at -0.16%. driven by U.S 2-year and 10-year Treasury yields falling 5 bps to 5.02% and falling 5 bps to 4.86% respectively. Market sentiment also became more risk-on as the U.S. High Yield (HY) – Investment Grade (IG) credit spread widened 1 bps to 3.06% while the CBOE Volatility Index (VIX) fell 44 bps to 21.27%.

This coming week, the EU will release Q3 GDP figures and the widely anticipated announcement of the US’s interest rate decision.


The global REITs market’s returns were mostly in the red across the numerous benchmarks. S&P/ASX 200 A-REIT Index (-4.48%) and FTSE EPRA Nareit Canada Index (-2.80%) are the notable REITs that generated negative returns over the past week. Closer to home, the iEdge S-REIT Index (-0.15%) and all of its subsectors generated negative weekly returns with Real Estate Operating Companies (-4.90%) and Health Care REITs (-4.38%), the notable sector underperformed the rest last week.  REITs generally have been affected by decreasing yield spread as interest rates surged and investors price in the possibility of reduced distributions stemming from higher financing costs. However, we do expect inflows to return to the sector given the existing attractive valuations on offer and resilience offered by the REIT asset class in light of the waning global growth outlook.

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