Weekly Market Update (Oct 12, 2025)
- Market Hedwig
- Oct 12
- 2 min read
HIGHLIGHTS
The US government continues to shut down, delaying key economic data releases such as retail sales and CPI. Israel and Hamas agreed to a peace deal.
China: There is improvement in property sector in China but it could be short-lived. Consumption data during holiday is modest while service spending performance is better than expected. Trade tension with the US has re-escalated.
Commodities: The current rally in commodities including copper, zinc and aluminium showed that the sentiment is bullish in the near-term. It is mainly driven by the rate cut, weakening dollar and AI-related capital expenditures. Copper is expected to stay at a high level while there could be potential downside in aluminium due to the growth in Indonesian supply.
US Housing: The hopes for housing market recovery are likely to disappoint. Although the affordability is better and the mortgage rate is lower, it cannot offset the increasing multi-family rental supply.
MARKETS
*Data as of market close. 5-day change ending on Friday.
VIEW FROM THE STREET
Equity
Goldman Sachs: Tech stocks have been driven by fundamentals but not irrational speculation. The mega tech companies have strong balance sheets.
UBS: The financial health of the large AI firms today is much stronger than the telecom companies at the turn of the millennium. Most of them are funded by strong operational cash flows. The value chain does not overly rely on debt or other external financing tools.
Fixed Income
Morgan Stanley: US credit spread has tightened so far in 2025. With more credit rating upgrades recently, investors could be more confident in clipping coupons, supported by falling treasury yields.
J.P. Morgan: Investors are more interested in high yields this year. However, they should be aware of the quality of these companies. During time of slower growth or recession, these below-investment-grade companies are going to suffer first and the impact could be outsized.
Economy
Morgan Stanley: The economic growth is dependent on the richest consumers and largest AI capex spenders. There is no clear signal from the job market, and the consumers who rely on spending via savings and credit are increasing their dependence on their jobs.
J.P. Morgan: The ongoing rate cuts are likely to help with the struggling borrowers, especially those with loans on floating rates.
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DISCLOSURE
This newsletter is meant for informational purposes only and is not investment advice. Always consult a licensed investment professional before making important investment decisions. Advertising and sponsorship do not influence editorial content or decisions. Market Hedwig is not responsible for the promises made or the quality or reliability of the products or services offered in any advertisement.
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