Friday's Markets Update (November 16, 2024)

16 Nov 2024 by rate3

On Friday, equities plummeted, with the major indices down 1-2%. Investors reacted to Powell’s comments on strong economic conditions and persistent inflation, leading to lowered expectations for interest rate cuts. Retail sales rose, but industrial production continues to fall. Concerns over potential Trump appointments also affected pharmaceutical stocks. For the week, stocks saw declines, reversing earlier optimism. The dollar, gold, and oil are all trading lower due to the mixed influence of a slowing world economy and a renewed hawkish stance from the Fed. China's foreign investment declined. Meanwhile, BTC ($91K) is ignoring other markets and continues to rise, leaving ETH ($3K) far behind once again.

Details

Retail sales grew 0.4% MoM in October, exceeding expectations. While some categories like electronics, auto dealers, and food services saw strong growth, others like furniture and clothing declined. Excluding autos and core categories, retail sales were flat. 1Y trend: "Up" (Census)
Export prices rose by 0.8% in October, surprising markets prognosis with a significant increase. Agricultural and non-agricultural exports both contributed to the rise. However, YoY, export prices declined slightly. 1Y trend: "Side" (BLS)
The New York Empire State Manufacturing Index surged to 31.2 in November, indicating a significant improvement in regional manufacturing conditions. New orders and shipments increased sharply, while inventories remained stable. Labor market conditions were steady, and input and selling price pressures remained moderate. Firms expressed optimism about the six-month outlook. 1Y trend: "Up" (NYF)
Industrial production declined 0.3% YoY in October, with weakness in mining and manufacturing sectors. However, utility production increased. 1Y trend: "Side"(Fed)

Crypto

Franklin Templeton has launched its first tokenized money market fund, FOBXX, on the ETH blockchain. This allows investors to invest in government securities via blockchain technology. The fund currently holds $429.74M in assets. (source)

World Markets

Italy's trade surplus widened slightly in September, as both imports and exports declined. Lower energy imports and capital goods contributed to the narrower trade deficit. However, sales to key markets like Germany, France, and the US also weakened. 1Y trend: "Up" (Istat)
China's foreign direct investment (FDI) declined by 29.8% YoY in October. While this marks a slight improvement from September, it continues to reflect the challenging global economic environment and geopolitical tensions. 1Y trend: "Down" (CN)

Currencies

The dollar index slipped slightly but remains near a 2-year high. A strong economy, supported by robust retail sales and manufacturing data, has led to expectations of a less dovish Fed. This, along with Powell's comments, has reduced the likelihood of a rate cut in December, boosting the dollar. 1Y trend: "Up"

Commodities

Crude oil prices fell 2.4%, pressured by weak Chinese demand and a stronger dollar. OPEC and the IEA both lowered their global oil demand forecasts. Additionally, rising US crude inventories added to the bearish sentiment. 1Y trend: "Side"
Gold prices fell to a one-month low (its worst weekly performance since June 2021) as the dollar strengthened and expectations for Fed rate cuts diminished. Powell's comments on the economy and inflation dampened hopes for a more dovish monetary policy. Concerns about potential inflationary pressures under Trump's administration weighed on gold prices from the other side. 1Y trend: "Up"

On Week 47, key economic indicators will be released, including building permits, initial jobless claims, and the Philadelphia Fed Manufacturing Index for November. The Kansas Fed Manufacturing Index and S&P Global Composite PMI Flash will also be featured. Additionally, speeches from Fed officials Goolsbee and Hammack are expected. In the Eurozone, final core inflation rates and CPI figures will be announced, alongside consumer confidence data and a speech from ECB President Lagarde, as well as the HCOB Composite PMI Flash for November.