10 Things You Need to Know: November 11, 2024
Key data releases this week include: NFIB Small Business Optimism (Tue), CPI (Wed), PPI (Thu), industrial production (Fri), and retail sales (Fri).
Haver
November 4, 2024
Manufacturers’ orders fell 0.5% (-1.6% y/y) in September following a 0.8% August fall. The decline was led by a 0.7% weakening (-2.1% y/y) in durable goods orders after they fell 0.9% in August.
Haver
November 5, 2024
The U.S. ISM Services Purchasing Managers Index rose to 56.0 in October from 54.9 in September. It was the highest level since July 2022, according to the Institute for Supply Management. The index is up from a four-year low of 48.8 in June. The Action Economics Forecast Survey expected a reading of 53.5 for October.
Bloomberg
November 8, 2024
US consumer sentiment climbed to a seven-month high in early November, boosted by Americans’ optimism about the future of the economy and their finances. The University of Michigan’s preliminary November sentiment index advanced to 73, exceeding all but one estimate in our survey of economists.
Capital Economics
November 8, 2024
The policies proposed by Donald Trump may end up providing a small net boost to Japan’s economy. While higher tariffs will result in a small fall in export volumes, it now seems likely that the yen will remain weaker for longer, which will lift corporate profits and business investment. While the renewed weakening of the yen increases our conviction that the BoJ will hike rates next month, we still believe that there won’t be any further tightening next year.
Barron’s
November 11, 2024
The S&P 500 is trading above its five-year average of 19 times earnings estimates and just below its recent peak of 23. That would be worrisome if earnings weren’t expected to rise 15% next year and another 13% in 2026. Estimates could even head higher if analysts start to factor in how possible deregulation, lower taxes, and increased federal spending would impact corporate profits, which would reduce the market’s P/E ratio.
Julian Emanuel, Evercore ISI/ Barron’s
November 11, 2024
“In a century of bull markets, the average gain is 152% over 50 months. This bull is young at 25 months and a gain of 65%. The advance/decline line is very healthy, bolstered by strength in small caps benefiting from a soft landing. That, along with the history of post-2020 and -2016 elections, as well as last July’s outperformance burst, bode positively.”
The Wall Street Journal, Financial Times
November 7, 2024
The Federal Reserve cut interest rates by a quarter point to a target range of 4.5% to 4.75%, citing a solid economy despite easing labor market conditions. The move was a unanimous decision by the Fed’s rate-setters. The economy is growing at a “solid pace,” the Federal Open Market Committee said, adding inflation remained “somewhat elevated”.
The Wall Street Journal, Barron’s
November 10, 2024, November 8, 2024
Federal Reserve Chair Jerome Powell is prepared to legally challenge any attempt by former President Donald Trump to dismiss him, reflecting a similar stance during Trump’s first term. Powell, whose term ends in 2026, has emphasized the importance of Fed independence to avoid setting a precedent where future chairs could be removed over policy disputes.
Capital Economics
November 8, 2024
We remain highly skeptical that the Republicans will deliver any large fiscal stimulus. Instead, to our minds, the combined drag from immigration curbs and new tariffs mean that, in net terms, Trump’s return is likely to be a negative for the economy.