Most markets were up slightly this week as the US tech stocks led the way for most of the week before falling back overnight as Jerome Powell struck a more hawkish tone, implying that while rates in the US may be near their peak they might have to stay there for a while longer.

During October, global markets experienced a downturn amidst inflation worries and the threat of rising interest rates, leading to a 2.7% fall in global equities and a 3.8% drop in Australian stocks, with tech sectors and major companies like Nvidia and Tesla taking notable hits. Despite the gloom, the materials sector saw gains, and gold shone brightly as a safe haven, appreciating by 7.3%. Australian bonds suffered as yields peaked, reflecting heightened recession risks that also impacted corporate bonds. However, the end of the month brought a glimmer of hope: markets began to recover following signals from the US Federal Reserve of a potential pause in rate hikes, prompting a partial rebound in equities and a significant uplift in Australian real estate and infrastructure investments as November began.

Equity markets declined over the past week, with the S&P/ASX 300 down -3.3% and the MSCI World Ex Australia index falling 2.7% in local terms, but only -0.9% in Australian Dollar terms for the unhedged Australian investor. Most of the falls happened overnight as a higher-than-expected GDP number put upward pressure on short-term rates.

This week rates have headed resolutely upwards, and stocks have not liked it much with most markets heading steadily downwards throughout the week.

Markets were down early in the week, on the back foot by a few percent. However, having got to the end of the week things have improved quite a bit and most markets are now actually up a few percent, with China leading the way.

Last week markets were down again, reflecting the trends that took root in September - long-term yields pushing higher with markets on the back foot. Most major asset classes were in negative territory for September, which had overtones of 2022, as concerns over rising interest rates, the slowing pace of disinflation, high oil prices and a potential global recession weighed on investor sentiment.

Equity markets around the world fell more or less in unison last week by about 3-4%, before bouncing slightly on Friday. The UK was really the only market to buck the trend, as the Bank of England unexpectedly kept rates on hold after inflation fell by more than forecast.

US markets closed flat last week as investors feared further interest rate hikes from the Federal Reserve, leading to a decrease in optimism. However, markets in Australia, Europe, and the UK saw growth due to strong performance from companies reliant on Chinese exports. In Europe, the European Central Bank hinted at the end of its monetary tightening campaign, while the UK saw a decline in its economy and an unexpected increase in unemployment. In Japan, speculation arose regarding potential Bank of Japan monetary policy normalization. China showed signs of stabilization, with the People's Bank of China cutting its reserve ratio requirement and economists predicting further policy easing. All eyes remain on China for a soft landing.

Global economic sentiment shifted in the week as US data strengthened, and Eurozone data weakened. Weaker global economic data raised concerns about central bank hawkishness, leading to a stronger US dollar and weaker currencies. Crude oil prices remained resilient amid supply concerns, while tech stocks led US markets lower as Apple took a hit.

The week of August 28th to September 1st, 2023, saw a delicate balance between economic indicators and market sentiment play out in markets. The United States enjoyed what appears to be Goldilocks labor conditions, with strong job growth and a tightening labor market.