Wednesday's Markets Update (November 15, 2023)
On Wednesday, Nasdaq continued to rise as traders weighed signals that the Fed may not hike rates further, though rates will remain elevated for some time. Producer prices fell, indicating easing inflation. Retail sales declined but less than expected. Apple, Microsoft, Amazon, and Nvidia rose. BTC rebounded sharply from Tuesday's deep plunge, reaching above 37.8K.
Producer prices (PPI) unexpectedly fell 0.5% in October 2023 compared to forecasts of a 0.1% rise, the largest monthly decline since April 2020. Goods prices dropped 1.4%, the first decrease since May, primarily due to a 15.3% fall in gasoline prices. Prices also declined for diesel fuel, hay, home heating oil, and light trucks. However, tobacco products prices rose 2.4%. Services prices were unchanged after six straight increases, as rises in transportation/warehousing services and services minus trade/transportation offset a decline in trade services margins. The producer price drop signals easing inflationary pressures.
The UK inflation rate fell to 4.6% in October 2023, down from 6.7% in August and September and below market forecasts of 4.8%. This is the lowest rate since October 2021, partly due to the recent reduction in energy prices after Ofgem lowered the household bill cap. Housing and utility costs dropped 3.5% with large declines in gas and electricity prices. Food inflation also eased to 10.1%, the lowest since June 2022. Additionally, price growth slowed for transport, restaurants, furniture, clothing, and other goods and services. The core inflation rate excluding food and energy fell to 5.7%, the lowest since March 2022. On a monthly basis, the CPI was unchanged. This sharp prices decease in UK confirms a world-wide trend on slowing inflation as economies continue to adjust to the World's new geopolitical situation.
China's industrial production grew 4.6% year-over-year in October 2023, slightly exceeding market forecasts of 4.4% growth. It was the fastest expansion since April, led by mining and manufacturing. However, utilities output slowed. By industry, production accelerated for non-ferrous metals, computers, and textiles. But growth decelerated for electrical machinery and chemicals, while output declined for non-metal minerals and general equipment. For the first ten months of 2023, industrial production was up 4.1% versus the same period last year, showing ongoing recovery despite headwinds. The October data indicates China's industrial sector continues to see modest growth momentum.