Thursday's Markets Update (October 31, 2024)

01 Nov 2024 by rate3

On Thursday, stocks closed sharply lower, led by tech stocks. Disappointing earnings from Microsoft and Meta, coupled with concerns about AI costs, pressured the market. A strong labor market and rising inflation also dampened hopes for Fed rate cuts. Europe's unemployment rate is at a historical low, with production still sliding down and inflation picking up. BTC tumbled below $70K on profit-taking before the elections, while ETH is frozen within its $2.4K-$2.6K range due to a lack of trader attention. Other crypto news: 'Crypto's not going anywhere,' says Florida CFO.

Details

In September core PCE inflation rose 0.3% MoM, the highest in five months, and decreased 2.1% YoY, the lowest level since 2021. This decline reflects moderating price pressures in the US economy. YoY core PCE inflation remained at 2.7%. 1Y trend: "Down" (BEA)
Job cuts in October totaled 55,597, up from the previous month but lower than the same period last year. Aerospace and defense led the cuts, followed by retail and consumer products. Year-to-date job cuts reached 664,839, the highest since 2020. Companies are adopting a cautious approach due to economic uncertainty and potential regulatory changes. 1Y trend: "Up" (CH)
The Chicago PMI fell to 41.6 in October 2024, indicating a sharp contraction in business activity. Production, new orders, and employment all declined. Price pressures eased slightly. 1Y trend: "Side" (ISM)

Crypto

Florida has invested nearly $800M in cryptocurrencies, according to its CFO Jimmy Patronis. He believes crypto is here to stay and Florida aims to capitalize on this opportunity. (source)

World Markets

Eurozone annual inflation accelerated to 2% in October, reaching the ECB's target. This was mainly due to base effects and higher food and energy prices. Core inflation remained steady at 2.7%. Monthly inflation rose 0.3% in October. 1Y trend: "Down" (ES)
Eurozone unemployment rate remained steady at 6.3% in September, the lowest level on record. 1Y trend: "Down" (ES)
German retail sales surged 3.8% YoY in September, exceeding expectations. This is the strongest growth in recent years, driven by increased consumer spending. 1Y trend: "Up" (DE)
French annual inflation rose to 1.2% in October, driven by higher food and energy prices. Monthly inflation rebounded 0.2% due to increases in fuel, clothing, and food prices. EU-harmonized inflation also increased to 1.5%. 1Y trend: "Up INSEE
The National Bank of Ukraine held its key interest rate at 13% in October 2024. Inflation remains elevated (8.6%), driven by food prices and currency depreciation. The NBU expects inflation to peak in late 2024 and decline in 2025. GDP growth is forecast to be 4% in 2024, supported by international financing. 1Y trend: "Down" (UA)

Currencies

The dollar fell slightly but is set to close October with a strongest monthly rise in over two years. Recent data, including GDP growth, PCE inflation, and strong labor market figures, has tempered expectations for aggressive Fed rate cuts. The market is now pricing in a 25 bps cut next week, with a higher probability of another cut in December. A potential Donald Trump win in the upcoming election could also weigh on the dollar. 1Y trend: "Side
The British pound fell to a three-month low of $1.285 after the Labour government's budget announcement. The budget includes increased borrowing, higher taxes, and a revised economic outlook. While the Bank of England is still expected to cut rates next week, market expectations for further cuts have been reduced. 1Y trend: "Up, Appreciating