Articles

• Prior was -18
• Composite index vs -8 prior

This article was written by Adam Button at www.forexlive.com.

• Prior was 0.716m (revised to 0.709m)
• Sales up 4.1% vs -2.3% prior

Earlier today, Whirlpool warned about a soft housing market.

“General housing market… is still in a very soft spot. And that’s — we all know, is ultimately driven by mortgage rates. But then the pre-election consumer sentiment is just not good,” said CEO Marc Bitzer.

It’s well known that US housing is struggling but there is optimism it could rebound next year with rate cuts. What isn’t yet priced in is the potential for the Fed to pause after a couple more cuts and an ongoing turn higher in 30-year rates that could nudge 30-yaer fixed mortgages back to 7%.

This article was written by Adam Button at www.forexlive.com.

The major US stock indices are trading mixed with the broader indices (S&P and NASDAQ) higher. The Dow industrial average is lower. The Dow industrial average is reacting to sharp declines in:

• IBM: -6.70%

• Honeywell: -4.44%

• Boeing: -2.02%. Boeing machinists rejected a new labor contract that included wage increases of 35% over four years

• Verizon: -2.11%

A snapshot of the market 15 minutes into the open issue showing:

• Dow Jones Industrial Average (DJIA): down -129.75 points, or -0.31%, at 42,385.20

• S&P 500: up 11.80 points, or 0.20%, at 5,809.22

• Nasdaq Composite: up 101.53 points, or 0.56%, at 18,378.18

• Russell 2000 up 9.9660 points, or 0.45%, at 2,223.80

Tesla shares are higher.

• ·
  Shares are trading up 16.96%
• ·
  Beat quarterly EPS, missed on revenue.
• · But, Elon Musk predicted 20-30% vehicle growth next
  year, citing lower-cost vehicles and autonomy.

US yields are lower on the day but off their lowest levels after stronger initial jobless claims. The S&P global indices also came in marginally higher for the flesh estimates.

• 2 year yield 4.072%, -1.2 basis points
• 5 year yield 4.042%, -1.4 basis points
• 10 year yield 4.239%, -0.2 basis points
• 30 year yield 4.514%, -0.1 basis points

This article was written by Greg Michalowski at www.forexlive.com.

• Final Sept reading was 55.2
• Manufacturing 47.8 vs 47.5 expected
• Prior manufacturing was 47.3 prior
• Composite 54.3 vs 54.0 prior

These numbers are a touch hot, highlighting once again that the US economy is fine.

Commenting on the data, Chris Williamson, Chief Business
Economist at S&P Global Market Intelligence said:

“October saw business activity continue to grow at an
encouragingly solid pace, sustaining the economic upturn
that has been recorded in the year to date into the fourth
quarter. The October flash PMI is consistent with GDP
growing at an annualized rate of around 2.5%.

“Demand has also strengthened, as signalled by new
order inflows hitting the highest for nearly one-and-a-half
years, albeit with both output and sales growth limited to
the services economy.

“Sales are being stimulated in part by more competitive
pricing, which has in turn helped drive selling price inflation
for goods and services down to the lowest since the initial
pandemic slump in early 2020. These weaker price
pressures are consistent with inflation running below the Fed’s 2% target.

“Businesses nevertheless remain cautious about hiring,
leading to a third month of modest payroll reductions.
Firms are worried in particular about uncertainty caused by
the Presidential Election.

“More encouragingly, confidence in the longer, year-
ahead, outlook has improved as companies hope that a
stabler post-election environment is more conducive to
growth. This is especially so in the manufacturing sector,
where factories hope that the current soft patch in
production and sales will reverse as the uncertainty
caused by the political environment passes.”

This is a dream scenario with new orders jumping and inflation running below 2% with confidence picking up.

This article was written by Adam Button at www.forexlive.com.

US stocks are pointed to open higher with S&P 500 futures up 0.5%. A big tailwind is coming from shares of Tesla, which are up 14% pre-market after posting better Q3 numbers than expected.

For the broader economy, the comments from UPS were positive as it beat on earnings and shares are up 7% premarket.

However I often watch Whirlpool for signs on consumer spending and the comments in the call today weren’t good.

“We are seeing further deterioration in the underlying discretionary demand than what we experienced in the first half of 2024,” said CFO James Peters, referring to North America. The company also highlighted weak macro in Europe but noted s strength in Brazil, Mexico and Asia.

“Demand in the US has shifted significantly toward lower-margin replacement-driven purchases,” said CEO Marc Bitzer.

This article was written by Adam Button at www.forexlive.com.

I spoke with Kitco News yesterday to discuss several major themes moving markets right now, from BRICS expansion to pre-election positioning and the broader macro backdrop for the US dollar.

We talked about how the US faces mounting challenges with debt levels exceeding $35 trillion and deficits running at nearly 7% of GDP despite strong economic growth. While the US can likely sustain higher debt levels (look at Japan), the more pressing question is whether it will choose to address these imbalances, particularly after the election. Neither presidential candidate appears poised to make deficit reduction a priority but there are still fiscal hawks in Congress.

The gold market has been particularly fascinating, hovering near record highs amid central bank buying and broader de-dollarization trends. While there’s some near-term risk of a pullback, especially around the US election if we see a smooth process, the longer-term fundamentals remain compelling. China has been a major driver, with consumers turning to gold amid property market weakness.

Internationally, we spoke about the challenge of the BRICS alliance and how it represents a treat to US dollar dominance and how Russian sanctions haven’t gone unnoticed by China and other nations seeking alternatives to dollar-based trade.

Looking at the US election, markets are pricing in potential volatility, with a consensus view that a Republican sweep could drive dollar strength through higher yields. However, a divided Congress scenario could quickly lead to gridlock pricing and potential dollar weakness.

We also talked about headlines around Chinese stimulus measures which could significantly impact emerging markets and commodities.

This article was written by Adam Button at www.forexlive.com.

• Prior was 241K (revised to 242K)
• Continuing claims 1897K vs 1875K expected
• Prior continuing claims 1867K (revised to 1869K)

This is better than economists were expecting, though continuing claims are now at the highest since November 2021.

• Michigan saw the largest drop (-7,917) due to fewer manufacturing layoffs
• Georgia posted the biggest increase (+3,293), citing layoffs across manufacturing, healthcare, and food services
• Florida (-3,257) reported fewer layoffs across multiple sectors including agriculture, construction, and retail, very likely due to the rebound from the hurricane
• New York saw a notable increase (+2,340) driven by transportation, warehousing, and public admin layoffs

This article was written by Adam Button at www.forexlive.com.

Headlines:

• Euro takes a ride on the PMI seesaw
• ECB’s Holzmann: A 25 bps rate cut is probable in December
• ECB’s Holzmann says will cut rates if circumstances, inflation allow for it
• ECB’s Vasle says should keep cutting rates in “measured steps”
• France October flash services PMI 48.3 vs 49.9 expected
• Germany October flash manufacturing PMI 42.6 vs 40.8 expected
• Eurozone October flash services PMI 51.2 vs 51.5 expected
• UK October flash services PMI 51.8 vs 52.4 expected
• UK October CBI trends total orders -27 vs -28 expected
• German wages continuing to grow despite economic headwinds – Bundesbank

Markets:

• JPY leads, USD lags on the day
• European equities higher; S&P 500 futures up 0.5%
• US 10-year yields down 5 bps to 4.192%
• Gold up 0.7% to $2,735.56
• WTI crude up 1.0% to $71.49
• Bitcoin up 0.7% to $67,071

Bond yields are coming off the boil and that’s the main driver leading markets so far today.

USD/JPY is down 0.6% as such to 151.90, pushing lower in European morning trade from around 152.20 earlier. The greenback surrendered some of its gains from earlier in the week as well given the circumstances.

10-year Treasury yields are marked down by 5 bps to under 4.20% and that’s giving broader markets a bit of a breather.

The euro was in focus amid PMI data, which saw mixed fortunes for France and Germany. That resulted in a bit of a seesaw action with EUR/USD falling initially to 1.0771 before climbing back up to around 1.0790 levels now. Large option expiries at 1.0800 is helping to keep price action in check.

As yields are keeping lower, equities are also looking to seek some relief. Tech shares led gains early on after Tesla’s earnings beat overnight. But that eventually translated to broader bids in European morning trade with regional indices also nudging higher.

S&P 500 futures are up 0.5% as stocks look to bounce back later in Wall Street trading.

All in all, that is pinning the dollar down a little across the board as the gains cool off. GBP/USD is up 0.4% to 1.2975 and AUD/USD up 0.3% to 0.6650 as the greenback’s run pauses ahead of the jobless claims and US PMI data later.

This article was written by Justin Low at www.forexlive.com.

• Collective wage agreements in Germany were up 6.2% y/y between January and August
• These findings do not fundamentally call into question the expected disinflation process
• But labour market situation is of great importance for the speed and extent of disinflation
• GDP likely shrank again in Q3 but should avoid a significant and broad-based decline in output

Just a couple of small notes but as mentioned by the Bundesbank, the higher wages are not quite reflected in the consumer prices presently. That said, it is still a spot worth keeping an eye out for just in case.

This article was written by Justin Low at www.forexlive.com.

• Prior -35

UK factory order book balance holds in negative territory in October, keeping not much changed to the month before. The volume of new orders, measured quarterly, declined to -11 from +1 previously and that hints at softer sentiment with the reading being the weakest since October 2020.

This article was written by Justin Low at www.forexlive.com.

The post Ex-Dividend 25/10/2024 first appeared on IC Markets | Official Blog.