US markets were trending up at the start of last week as the US Federal Reserve's (Fed) attitude from its minutes report towards raising interest rates turned slightly dovish, but then market reversal wiped out most of the gains after the release of economic data surrounding rebounded PPI and the weak Consumer Confidence Index.

NASDAQ composite remained the only detractor for last week as growth stocks suffered. Investors are still paying close attention to the movement of interest rates and are concerned about the extended period of high-interest rates.

The escalated Israeli-Palestinian conflict brought more uncertainties to the current market. During this unstable period, we believe the Fed will choose to maintain the current interest rate as the US economy still seems stable with US banks' third-quarter financial reports showing impressive performance. Still, any further geopolitical escalation pertaining to the Israeli-Palestinian conflict will likely weigh global markets down.

The European economy may potentially fall into stagflation with high inflation and slower economic growth. Though investors widely expected the European Central Bank (ECB) to stop interest rate hikes in October 2023, the ECB President Christine Lagarde expressed hawkish remarks over the weekend citing elevated rates due to persistent inflation and high wage growth.

The Eurozone will no doubt be a tough place to navigate given the possibility of rising energy prices stemming from an escalated Israeli-Palestinian conflict paired with global uncertainties both in the US and Asian regions.

Chinese markets remained sluggish though the government continues to introduce minor policies to support economic development. Current bolster policies are still deemed insufficient by market participants. Confidence is currently most needed in the market as the previous actions didn’t awaken the markets with the real estate sector still being the major concern of the market.

Country Garden is now in the spotlight after the debt crisis and failure of Evergrande. We remained cautious about the Chinese market even though valuations are cheap. Single stocks are not highly recommended, but indexes could be a consideration out of investment diversity and the belief that the government will eventually step in to rescue the economy.