Key Points

• Risk-Off as Fed Cut Bets Recede: Global equities weakened after hawkish Fed signals cut December rate-cut odds to roughly 50/50; Asia led declines while oil and gold firmed on risk aversion.
• China Slowdown Deepens: October data showed fixed-asset investment contracting and housing prices falling, with softer industrial output and retail sales underscoring fragile domestic demand.
• Asia Tracks Wall Street Lower: Tech-led selling spread across the region—Japan and Korea fell sharply—amid valuation concerns and fading policy-easing hopes, despite a firmer onshore yuan.
• Foreclosure Activity Ticks Up: U.S. foreclosure filings rose again in October (starts and completions higher year over year); still far below crisis levels but pointing to emerging housing stress.

Risk-Off as Fed-Cut Hopes Fade

Asian equities fell sharply after Federal Reserve officials signaled caution on cutting rates, shrinking market odds of a December move to roughly 50/50.

MSCI Asia ex-Japan slid 1.6%, with Japan’s Nikkei down 2% and South Korea off as much as 3.6%; Chinese stocks eased after October industrial output and retail sales missed forecasts.

U.S. futures softened, while 10-year Treasury yields held near 4.11% and the dollar eased.

Oil rose after supply disruption headlines (Brent ~$63.95), and gold firmed.

The pullback reflects valuation nerves; especially in tech, amid thinner data visibility following the recent U.S. shutdown.

China Growth Cools as Property Drag Deepens

China’s October data underscored a slowing economy: fixed-asset investment fell 1.7% in the first ten months (the steepest since the pandemic era), with property investment down 14.7% year to date.

Industrial output eased to 4.9% from 6.5% in September, and retail sales grew 2.9%, the weakest pace this year despite beating forecasts.

New home prices fell 0.5% month on month and 2.2% year on year, highlighting ongoing housing stress.

While headline inflation turned positive (CPI +0.2% y/y; core +1.2%), economists expect little new stimulus in 2025, keeping pressure on Beijing to support demand as exports also falter.

Asia Sinks as Tech Weakens and Rate-Cut Hopes Dim

Asia-Pacific stocks fell, mirroring Wall Street’s tech-led slide and fading expectations of a Fed cut in December.

Japan’s Nikkei dropped 1.77% as SoftBank extended losses after exiting Nvidia; South Korea’s Kospi fell 3.81% with Samsung and SK Hynix under pressure.

Hong Kong and mainland China declined after data showed weaker October activity, industrial output slowed to 4.9% and retail sales to 2.9%: while fixed-asset investment contracted 1.7% year to date.

The onshore yuan firmed to a one-year high, but sentiment stayed fragile as U.S. rate signals turned cautious and investors reassessed stretched tech valuations.

Foreclosures Edge Higher as Housing Strains Build

U.S. foreclosure activity rose again in October, signaling gradual stress rather than a crisis.

Total filings reached 36,766, up 3% month over month and 19% year over year, with foreclosure starts up 6% on the month and 20% annually; completed foreclosures jumped 32% from a year earlier.

Florida, South Carolina and Illinois led state filings, while Tampa, Jacksonville and Orlando topped metro areas. Levels remain far below Great Recession peaks (under 0.5% of mortgages in foreclosure versus 4% then), but elevated rates, firm prices, rising insurance costs and softer labor trends point to modestly higher delinquencies ahead.

Conclusion

Markets ended the week on a defensive footing as hawkish Fed signals cut the odds of a December rate move, igniting a broad, tech-led pullback across Asia and Wall Street.

China’s October prints reinforced a cautious backdrop, fixed-asset investment contracted, industrial output and retail sales softened, and home prices fell, keeping pressure on policymakers to support demand.

In the U.S., foreclosures continued to edge higher, still well below crisis levels but signaling rising household strain amid elevated borrowing costs.

Near term, liquidity and positioning dominate; medium term, dispersion favors stronger balance sheets, resilient cash flows, and valuation discipline over momentum narratives.

Investment Insights

• Fed & Risk: With rate-cut hopes fading, prioritize balance-sheet strength and dependable cash generation over momentum; keep some dry powder for volatility.
• China Exposure: Tilt China-linked allocations toward firms tied to domestic demand support (infrastructure, utilities, select consumer staples) and away from property-sensitive names.
• Tech Reassessment: Use the tech pullback to upgrade quality; favor platforms with durable pricing power and diversified end-markets rather than single-theme AI stories.
• Housing Watch: Rising foreclosures argue for caution in housing-adjacent cyclicals; prefer lenders and insurers with conservative underwriting and regional diversification.

Economic Calendar