Thursday's Markets Update (October 3, 2024)

04 Oct 2024 by rate3

On Thursday, stocks finished marginally in the red, while services sector data showed expansion as labor conditions continued to cool. Sentiments soured after Biden hinted at support for Israel striking Iran's oil facilities. Internationally, gold remains near record levels, while oil surged by over 5%. The decline in BTC and ETH has slowed, with their prices hovering around $60K and $2.2K.

Details

Employers announced 72,821 job cuts in September, down from 75,891 in August. Technology announced the most job cuts (11,430). For Q3, companies announced plans to cut 174,597 jobs, down from Q2 but up 19% from Q3 2023. For the year, companies have announced 609,242 job cuts, up 0.8% from 2023. Experts predict a potential stall or tightening of the labor market. 1Y trend: "Side" (CH)
The number of people claiming unemployment benefits in the US rose by 6K to 225K on the period ending September 28th, surpassing market expectations. This marks a new three-week high and reinforces the trend of a softening labor market. The four-week moving average for initial claims declined by 750 to 224,250. 1Y trend: "Up" (DOL)
The Composite PMI was revised down to 54 in September from a preliminary of 54.4, compared to 54.6 in August. This continued to indicate robust growth in the private sector. However, growth was concentrated in the service sector as the manufacturing downturn deepened. Additionally, inflationary pressures strengthened, with increases in input costs and output prices reaching 12- and six-month highs, respectively. 1Y trend: "Up" (SPG)

Crypto

The IMF is still not pleased with El Salvador’s BTC experiment but will continue to work with the country. The IMF has recommended "limiting public sector exposure to Bitcoin." El Salvador made BTC legal tender in 2021. The IMF has been one of the loudest critics of the BTC move. (source)

World Markets

The HCOB Eurozone Composite PMI was revised higher to 49.6 in September but still signaling a decrease in total business activity for the first time since February. Services slowed and manufacturing contracted as demand fell at the quickest pace in eight months. Business confidence weakened, and the three biggest economies in the Euro Area recorded contractions simultaneously for the first time in 2024. 1Y trend: "Down" (PMI)
Producer prices in the Euro Area were down 2.3% YoY in August. 1Y trend: "Up" (EC)

Commodities

Gold remained near $2,660 per ounce on Friday, trading at record levels due to heightened geopolitical risks. Markets are monitoring developments in the Middle East, as fears intensified after Biden refrained from directly condemning Israel's potential targeting of Iran. Robust labor market data has tempered gold's upward momentum, reducing the necessity for the Fed to implement a more lenient monetary policy. Markets now estimate around a 65% chance that the Fed will opt for a modest 25 bps rate cut in November. 1Y trend: "Up"
WTI crude oil traded around $73.7 per barrel on Friday, hovering at a four-week high and poised for its highest weekly gain since late March 2023. Escalating conflict in the Middle East continued to pose supply risks. However, supply concerns were alleviated by OPEC's spare production capacity and the continued stability of global crude supplies. 1Y trend: "Side"