Thursday's Markets Update (October 17, 2024)

18 Oct 2024 by rate3

On Thursday, equities ended mixed after the Dow and SP briefly reached new ATHs, with semiconductor shares leading the gains. Retail sales increased, and jobless claims were lower than expected, suggesting strong consumer spending. Traders are now focusing on the upcoming earnings reports from Big Tech. Gold reached a new ATH as the ECB cut its rate. BTC (at 68K) continued to slowly edge up on election optimism, while ETH remained stuck at 2.6K.

Details

The NAHB/Wells Fargo Housing Market Index rose to 43 in October, exceeding expectations. Current sales conditions and sales expectations rose, supported by expectations of Fed rate cuts. Traffic of prospective buyers increased slightly. The share of builders cutting prices remained unchanged. 1Y trend: "Side" (Nahab)
The Philadelphia Fed Manufacturing Index rose to 10.3 in October, exceeding expectations. Current general activity, new orders, and shipments grew. Employment remained stable. Price indexes decreased slightly but still show price increases. Future growth expectations improved, signaling optimism. 1Y trend: "Up" (Phil)
Retail sales rose 0.4% in September, exceeding expectations. Sales at miscellaneous stores, clothing, health, food, and beverages increased. Sales at electronics, gasoline, and furniture stores declined. Excluding food, auto, building materials, and gasoline, sales rose 0.7%, the most in three months. 1Y trend: "Side" (Census)

Crypto

Spot BTC ETFs have seen over $20B in net inflows, despite BTC's seven-month downtrend. BTC has struggled to surpass $68.3K since June and has declined since March. It took ten months for BTC ETFs to reach $20B, compared to five years for gold ETFs. BlackRock accounted for $22 billion in inflows, while Grayscale faced over $20 billion in outflows. (source)

World Markets

The ECB lowered interest rates by 25 bp, as expected. This follows similar moves in September and June. The deposit facility rate is now 3.25%. Inflation is falling and is expected to decline toward the 2% target in 2025. Wage growth remains high but is easing. The ECB remains committed to restrictive rates to ensure inflation reaches its medium-term goal, using a data-driven approach. 1Y trend: "Side" (EU)
Eurozone inflation fell to 1.7% in September, below the ECB target of 2%. Services inflation slowed, energy prices fell, and core inflation eased to 2.7%. Inflation eased in Germany, France, Italy, and Spain. 1Y trend: "Down" (EC)
China's economy grew 4.6% in Q3, below expectations. This is the slowest growth since Q1 2023, due to property weakness, weak domestic demand, deflation risks, and trade frictions. 1Y trend: "Side" (CN)
China's new home prices fell 5.7% year-on-year in September, the 15th consecutive decline. This is the steepest pace since May 2015, despite Beijing's efforts to address property weakness. Prices dropped in most cities, with Beijing, Guangzhou, Shenzhen, Tianjin, and Chongqing seeing steeper declines. Shanghai's prices rose. Monthly, new home prices dropped 0.7% for the fifth straight month. 1Y trend: "Down" (CN)

Currencies

The dollar index rose to 11-week highs, supported by strong US economic data and a potential Trump victory. Retail sales rose more than expected, and jobless claims fell. The dollar gained from a weakening euro after the ECB cut rates. Investors await housing starts, building permits, and Fed commentary. 1Y trend: "Side"

Commodities

Gold reached $2,690 on Thursday, a new ATH, as it maintained strong momentum despite increases in the dollar and Treasury yields. The European Central Bank cut rates by 25bps, signaling a solid disinflation process. Investors moved to safe-haven assets amid concerns over China's property crisis, affecting major Chinese capital markets. 1Y trend: "Up"