10 Things You Need to Know: October 29, 2024
Key data releases this week include: FHFA House Price Index (Tue), JOLTS Jobs Openings (Tue), consumer confidence (Tue), Q3 GDP (Wed), pending home sales (Wed), personal income and spending (Thu), PCE Deflator (Thu), ISM Manufacturing (Fri), and nonfarm payrolls (Fri).
Haver
October 23, 2024
Sales of existing homes fell 1.0% (-3.5% y/y) in September to 3.84 million units (SAAR) after declining 2.0% in August to 3.88 million. This was the lowest level of sales since October 2010. The Action Economics Forecast Survey expected September sales of 3.85 million units.
Bloomberg
October 23, 2024
“On balance, economic activity was little changed in nearly all districts since early September, though two districts reported modest growth,” the Federal Reserve said in its Beige Book survey of regional business contacts. “Reports on consumer spending were mixed, with some districts noting shifts in the composition of purchases, mostly toward less expensive alternatives.”
Capital Economics
October 28, 2024
In light of the worsening outlook for economic growth and inflation in the euro-zone, we are making major downward revisions to our ECB interest rate forecast. We now think the Bank will implement back-to-back 50bp rate cuts in December and January and take the deposit rate down to 1.5% by mid-2025.
South China Morning Post
October 28, 2024
China’s industrial profits plummeted 27.1% in September year over year, the steepest decline since March 2020, as the country grapples with slow growth, weak demand and a property crisis. This decline follows a 17.8% fall in August, highlighting ongoing challenges in the industrial sector.
Bloomberg
October 23, 2024
The Mexican peso’s implied volatility surged above 22.43% on Wednesday, the highest level since April 2020, and traders are bracing for further volatility as the US elections approach. The peso has slipped 15% this year and stands to be one of the most affected emerging market currencies should Donald Trump go through with imposing tariffs.
Barron’s
October 28, 2024
Ten different estimates of the real neutral rate of interest recently compiled by Deutsche Bank economists range from 0.7% to 2.5%, with an average of 1.5%. This suggests that the fed-funds rate is heading to the neighborhood of 3.5%—a meaningfully higher neutral rate than the one that prevailed in the U.S. economy in the decade between the global financial crisis and the Covid-19 pandemic.
Barron’s
October 28, 2024
At market close on Oct. 14, the FT Wilshire 5000 Total Market Index reached its highest value ever, $56.37 trillion, while the number of stocks in the Wilshire was down to 3,328. That’s the lowest number of stocks in the index since it was created in 1974. It’s a sign of how the market has changed in recent years, with indexing becoming more popular and fewer new issues being made available to retail investors.
Capital Economics
October 24, 2024
We are apparently a lot more skeptical than many that a 2024 Trump win will mean even more fiscal stimulus. We suspect the threat of a seriously adverse reaction in bond markets will rein in Republicans’ desire for tax cuts and limit them to extending the original Trump tax cuts due to expire at the end of 2025.
Bloomberg, The Wall Street Journal
October 27, 2024
Tech giants such as Apple, Nvidia and Microsoft are expected to report their slowest earnings growth in six quarters, with average growth projected at 19% for the third quarter, compared with a 4.3% increase for the S&P 500 overall. This slowdown has raised concerns about valuations, and analysts are particularly focused on AI investments.