Thursday's Markets Update (October 24, 2024)

25 Oct 2024 by rate3

On Thursday, equities finished mixed, with technology stocks outperforming and leading to gains in the Nasdaq. Tesla surged more than 20%, adding over $100B in market value following strong profits. Other notable stock movements included declines in IBM, Honeywell, and Boeing. The dollar decreased, while the Indian rupee remained close to record lows due to increased foreign exchange outflows from Indian markets. BTC held steady near 68K, while ETH remained roughly unchanged at 2.5-2.6K.

Details

The Chicago Fed National Activity Index fell to -0.28 in September, down from -0.01 in August. Production indicators contributed -0.21, while sales, orders, and inventories remained at -0.03. Employment indicators dropped to -0.03 from neutral. The personal consumption and housing category improved slightly to -0.01 from -0.03. The three-month moving average also decreased to -0.19 from -0.14. 1Y trend: "Side" (CFed)
Unemployment claims decreased to 227K for the week ending October 19th, marking the lowest level this month and falling short of expectations of 242K. This decline suggests resilience in the labor market amid rising interest rates, reinforcing the likelihood that the Fed will avoid aggressive rate cuts. 1Y trend: "Up" DoL
The Composite PMI increased to 54.3 in October, up from 54.0 in September, indicating growth in business activity at the quarter's start. The service sector led this growth (PMI at 55.3), while manufacturing continued to decline (PMI at 47.8). Employment dipped slightly amidst pre-election uncertainty, though business confidence improved, anticipating post-election stability. 1Y trend: "Up" (SP)
In October, the Kansas Fed Composite Index was -4, an improvement from -8 in September and close to -3 in August. This index averages production, new orders, employment, supplier delivery times, and raw materials inventory. The decline affected both durable and nondurable goods, especially in chemical, steel, and beverage manufacturing. 1Y trend: "Down" (KFed)
In September, building permits dropped 3.1% to a seasonally adjusted annual rate of 1.425M, revised from an initial estimate of 1.428 million. Permits for buildings with five or more units fell 9.2% to 405 thousand, while single-family authorizations decreased by 0.4% to 963 thousand. The Northeast, Midwest, and South experienced declines in permits, while the West saw an increase of 8.9% to 331 thousand. 1Y trend: "Down" (Census)

Currencies

The dollar index decreased to 104.2, after rising nearly 1% to three-month highs over the previous three sessions. Investors are focused on interest rates and anticipate the Fed won’t reduce rates as much as previously thought, due to strong economic data and election uncertainties. Initial jobless claims dropped, returning to pre-hurricane levels. The probability of a 50bps rate cut this year decreased to approximately 68%. The dollar weakened against the British pound and Japanese yen. 1Y trend: "Side"
The Indian rupee has remained below 84 since mid-October, close to record lows, amid rising foreign exchange outflows from Indian markets. Concerns about sustaining economic growth prompted investors to reduce their positions in Indian equities and bonds, leading to significant net outflows recently. Additionally, investors shifted focus to Chinese markets after new stimulus measures and expectations for RBI easing declined due to September's consumer inflation surpassing 5.5%, exceeding the RBI’s 4% target. 1Y trend: "Up, Depreciating"