Stock Markets

Holiday cheer and the absence of significantly negative news drove the stock markets up for the seventh consecutive week. According to the Wall Street Journal Markets report, the Dow Jones Industrial Average (DJIA) roared upwards by 2.92% for the week as its Total Stock Market Index climbed by 2.85%, suggesting that institutional buying may be driving the purchase of index-linked stocks. The Nasdaq Stock Market Composite, a tracker for technology stocks, also rose by 2.85% while the broad S&P 500 Index ascended by 2.49%. The NYSE Composite Index gained by 2.48% even as the Russell 2000 Index shot up by 5.55% and the Russell 1000 added 2.68%, suggesting that small-cap stocks massively outperformed the large-cap issues. The CBOE Volatility Index (VIX) only moved the needle slightly downward by 0.57%, suggesting that investors perceive risk to have mitigated in the markets and have lowered expectations of market volatility.

The run-up this week lifted the S&P 500 and Nasdaq Composite Indexes to 52-week highs and the DJIA to its all-time peak. The seven weeks of straight gains was the longest streak for the S&P 500 Index since 2017. The week’s gains were also broadly based, as indicated by the equally-weighted index of S&P 500 stocks outpacing by 131 basis points its market-weighted counterpart. The Russell 2000 Index gains for the week lifted it out of bear market territory (a descent of 20% from its peak) for the first time in more than 20 months. Volumes were also elevated at the end of the week as the number of shares exchanging hands daily reached a new high for 2023. Since volume follows the trend, this may be a bullish sign that markets could be ready to move higher.

U.S. Economy

What appears to be incentivizing the rise in market participation among investors is the expectation of a more benign inflation environment among policymakers. On Tuesday, the report released on consumer price inflation was approximately in line with expectations. Core inflation, which excluded food and energy, remained steady at 4.0% year-over-year. The producer price inflation report which was released on Wednesday reported core inflation running at 2.0% for the year, its lowest level since January 2021 and surprising modestly on the downside. While the Federal Reserve left rates unchanged, the quarterly “dot plot” which summarizes individual policymakers’ rate expectations shows that the median projection was for 75 basis points of rate cuts, up from 50 basis points in previous projections, coming in 2024.

Another indicator was the retail sales data released on Thursday which arguably disrupted the disinflation narrative, but investors appeared to generally discount the data and take it in stride. Retail sales rose by 0.3% unexpectedly in November while October’s decline was revised lower. This reflects a strong start to the holiday shopping season. Particularly strong were online sales and sales at restaurants, which shows a resilience in discretionary spending. However, other data released during the week point to some surprising weakness in the manufacturing sector. Overall, the Fed forecasts a form of soft landing with a steady unemployment rate of 4.1% despite lower growth and inflation for 2024. The soft-landing recession expected signifies that there will likely be cooler economic growth and moderating inflation without a meaningful decline in joblessness.

Metals and Mining

The Federal Reserve will continue to drive gold prices, according to the broadest consensus among analysts. With the Fed Funds rate at its peak, however, the only trend possible is downwards, leaving only the question of when and how fast the decline will be. The Fed signaled in its updated economic projections on Wednesday that it sees the potential for three rate cuts in 2024 – the first clear signal that the committee is ready to pivot in its interest rate direction, which will be a positive development for gold prices. In the past year, precious metals were able to withstand the Fed’s most aggressive hiking cycle in more than four decades. The $1,800 per ounce level proved to be a major support for gold despite the rising yields. As headwinds start to dissipate, the implications for the yellow metal could be bullish.

The spot prices of precious metals this week saw significant gains. Gold rose by 0.75% from its previous weekly close at $2,004.67 to this week’s closing price of $2,019.62 per troy ounce despite treading close to new highs. Silver ascended by 3.74% from last week’s close at $23.00 to this week’s close at $23.86 per troy ounce. Platinum’s weekly close saw a 2.59% elevation from last week’s price of $920.65 to this week’s price of $944.51 per troy ounce. Palladium ascended by 24.33% from last week’s closing price of $946.74 to this week’s closing price of $1,177.06 per troy ounce. The three-month LME prices of base metals also climbed this week. Copper rose by 2.48% this week from its last weekly closing price of $8,342.00 to this week’s closing price of $8,549.00 per metric ton. Zinc ascended by 5.22% from last week’s close of $2,406.50 on its way to this week’s close of $2,532.00 per metric ton. Aluminum gained by 5.39% from last week’s $2,132.50 price to this week’s $2,247.50 per metric ton close. Tin inclined by 2.03% from last week’s closing price of $24,675.00 to this week’s closing price of $25,175.00 per metric ton.

Energy and Oil

At last, the oil markets are on track for its first week-ion-week increase in eight weeks, with the price of Brent rising toward $77 per barrel. The United States accounted for much of the bullish sentiment, despite continuous attacks on tankers in the Red Sea. The first reason is the Federal Reserve’s pledge to start cutting interest rates in the coming year, an announcement that drove the markets in general due to positive investor sentiment. The second reason is the larger-than-expected U.S. inventory draw which pushed oil prices further up. For now, the Brent decline down to the low 70s is off the table, but the question remains as to how long. In the December monthly oil report released this week, the OPEC reiterated that it is optimistic for robust oil demand growth in 2024, by as much as 2.46 million barrels per day (b/d). It oil producers’ group blamed the recent plummet in oil prices on exaggerated oil demand concerns that negatively and disproportionately impacted market sentiment.    

Natural Gas

For the report week beginning Wednesday, December 6, and ending Wednesday, December 13, 2023, the Henry Hub spot price fell by $0.40 from $2.73 per million British thermal units (MMBtu) to $2.33/MMBtu. Natural gas spot prices fell at most locations this report week, mostly in line with the U.S. benchmark Henry Hub price. Price changes ranged from a decrease of $6.41/MMBtu at Algonquin Citygate to an increase of $1.23/MMBtu at the Waha Hub.

Regarding the Henry Hub futures, the price of the January 2024 NYMEX contract decreased by $0.234, from $2.569/MMBtu at the start of the week to $2.335/MMBtu by the end of the report week. The price of the 12-month strip averaging January 2024 through December 2024 futures contracts declined by $0.183 to $2.563/MMBtu.

International natural gas futures prices decreased this report week. The weekly average front-month futures prices for liquefied natural gas (LNG) cargoes in East Asia decreased by $0.33 to a weekly average of $15.77/MMBtu. Natural gas futures for delivery at the Title Transfer Facility (TTF) in the Netherlands, the most liquid natural gas market in Europe, decreased by $1.18 to a weekly average of $11.73/MMBtu. During the week last year that corresponds to this report week (beginning December 7 and ending December 14, 2022), the prices were $33.46/MMBtu in East Asia and $42.46/MMBtu at the TTF.

World Markets

On the back of expectations that the central banks may eventually reverse its rate hiking policy, European equities reflected investors’ increasing optimism. The pan-European STOXX 600 Index closed higher by 0.92% for the week in local currency terms as financial markets increasingly expect to cut interest rates in 2024. The major stock indexes in the region ended mixed. France’s CAC 40 Index gained 0.93%. Ending modestly lower were Germany’s DAX and Italy’s FTSE MIB. The UK’s FTSE 100 Index inched upward by 0.29%. The European Central Bank maintained its key deposit rate at a record high of 4.0% but it cut its inflation and growth forecasts for 2023 and 2024. In December, business activity in the Eurozone shrank, according to a report by S&P Global. An early estimate of the Purchasing Managers’ Index (PMI) based on the combined output of the manufacturing and services sectors fell to 47.0 from 48.6 in November. This is a two-month low and a seventh straight month of contraction, indicated by a rating below 50.

Japan’s stock markets ascended over the week. The Nikkei 225 Index gained 2.1% while the broader TOPIX Index rose by 0.3%. The buy-up was spurred by the U.S. Federal Reserve signaling by the clearest indications so far that it will pivot away from monetary policy tightening, holding interest rates steady, and projecting more aggressive rate cuts in 2024. However, the yen strengthened somewhat, creating disadvantages for Japan’s exporters. The yield on the 10-year Japanese government bond (JGB) fell from 0.77% to 0.70% over the week due to speculation waning that the Bank of Japan (BoJ) is likely to end its negative interest rate policy sooner than expected, a reaction to the Fed’s pivot. The yen reacted by strengthening to the JPY 141 level against the dollar from the high range of JPY 144 during the previous week. Much of the currency’s strength is due to expectations about narrowing U.S.-Japan interest-rate differentials.

Chinese equities slid due to persistent deflationary pressures that weighed on the country’s economic outlook. The Shanghai Composite Index declined by 0.91% while the blue-chip CSI 300 slipped by 1.7% over the past week. The Hong Kong benchmark Hang Seng Index rose by 2.8% amid the global stock rally in response to the Fed keeping interest rates unchanged and signaling rate reductions in 2024. China’s consumer price index dipped in November by 0.5% year-on-year, higher than October’s 0.2% contraction. It is also the steepest drop since November 2020 as lower pork prices brought food prices lower. In the meantime, the producer price index fell by 3% from last year, a figure bigger than expected and its 14^th straight month of decline. The circumstances point to potential deflation which is problematic for China. According to economists, it could trigger a downward spiral of economic activity.

The Week Ahead

Scheduled for report this coming week are PCE inflation data, home sales data, and retail sales data for November, among others.

Key Topics to Watch

• Consumer Price Index (CPI) for November
• Core CPI for November
• CPI year-over-year
• Core CPI year-over-year
• Monthly U.S. federal budget for November
• Producer price index (PPI) for November
• Core PPI for November
• PPI year-over-year
• Core PPI year-over-year
• FOMC interest rate decision
• Fed Chairman Jerome Powell press conference
• Initial jobless claims for December 9
• Import price index for November
• Import price index minus fuel for November
• U.S. retail sales for November
• Retail sales minus auto for November
• Business inventories for November
• Empire State manufacturing survey for December
• New York Fed President John Williams speaks
• Industrial production for November
• Capacity utilization for November
• S&P flash U.S. services PMI for December
• S&P flash U.S. manufacturing PMI for December

Markets Index Wrap-Up

Stock Markets

The major U.S. stock market indexes were mixed this week. According to the Wall Street Journal Markets report, the Dow Jones Industrial Average moved sideways for the week, adding a slight 0.01% and while the transportation and utility sectors came down, the total stock market index advanced by 0.26%. The broad S&P 500 Index gained by 0.21% although it was outperformed by the technology-heavy Nasdaq Stock Market Composite which climbed 0.69%. The NYSE Composite declined by 0.34%. The CBOE Volatility Index (VIX), an indicator of investor risk perception, ended lower by 2.22%. While the market is already set on expecting a rate cut instead of a rate hike from the next Fed move, the timing of this event may be a cause for some volatility.

The week began with a sell-off but a late rally helped the major indexes close flat to modestly higher. For the third time in the past four weeks, the small-cap Russell 2000 Index outperformed the S&P 500 Index which resulted in narrowing its significant year-to-date underperformance. Growth stocks have built slightly over their value counterparts, and energy stocks lagged within the S&P 500 due to oil prices falling below the $70-per-barrel level for the first time since June. One factor that seemed to boost the growth indexes and the technology-heavy Nasdaq Composite is the continuing enthusiasm of the market over the potential of generative artificial intelligence (AI). On Thursday, Alphabet, Google’s mother company, rose by more than 5% after the company divulged its new AI model, Gemini. This product can process text, code, audio, images, and video, and can be incorporated into mobile applications. Simultaneously, Advanced Micro Devices climbed by almost 10% upon announcing its launch of a new generation of AI chips, Earlier in the week, Apple moved back to near its summer all-time highs when it eclipsed $3 trillion in market capitalization.

U.S. Economy

The economic news released during the week drove market sentiment northward. Surprising on the upside was the nonfarm payrolls report released on Friday, revealing that employers added 199,000 jobs in November which was higher than consensus estimates of around 180,000. The unemployment rate also perked interest by falling back to 3.7% from a two-year high of 3.9% in October. Average hourly earnings rose above expectation at 0.4%, however, the year-over-year increase was maintained at the expected 4.0%. The biggest market reaction, though, was the University of Michigan’s preliminary gauge of consumer sentiment in December. The metric surged to its highest level since August due to calming inflation fears. The survey respondents expected prices to increase by a much lower 3.1% in the coming year from the 4.5% registered in November. December’s reading is also the lowest rate recorded since March 2021. Also rising considerably are gauges of consumer expectations and their assessment of current economic conditions.

Other economic data that emerged during the week drew mixed reactions. There was a modest pickup in services sector activity in November, as indicated by data from both the S&P Global and the Institute for Supply Management released on Tuesday. However, the Labor Department’s count of October job openings dropped by more than expected to 8.73 million, the lowest level since March 2021. On Monday, reported data on October factor orders also fell more than expected.

Metals and Mining

The gold market went through a rollercoaster week as the price of gold rallied to an all-time of high only to plunge and close at 3% lower than last week. On Monday, bullish momentum triggered a buy signal in an illiquid market in the Asian session, driving the precious yellow metal to hit $2,152.30 per ounce, a new high. The subsequent parabolic move, however, showed the rally to be unsustainable and cratered into a selling momentum triggered by occasional buy stops. It is not surprising, though, that gold was sold down after it breached past the $2,100 per ounce level because of the profit-taking potential provided to investors after prices hit a major projection level. This does not signify, however, that there is no long-term bullish sentiment in gold; this remains intact. Many analysts were warning investors that gold was in overbought territory, thus the near-term selloff was only to be expected.

The spot prices for precious metals ended the week down. Gold, which ended last week at $2,072.22, closed this week at $2,004.67 per troy ounce for a loss of 3.26%. Silver came down by 9.77% from its previous week’s close at $25.49 to end this week at $23.00 per troy ounce. Platinum, which ended last week at $937.15, went further south by 1.76% to close this week at $920.65 per troy ounce. Palladium came down by 5.90% from its close last week at $1,006.13 to end this week at $946.74 per troy ounce. The three-month LME prices of industrial metals were generally lower at the week’s close. Copper lost 1.45% this week from its previous close at $8,464.50, ending this week at $8,342.00 per metric ton. Zinc also dipped, ending the week lower by 2,79% from its previous week’s close at $2,475.50, for a closing price of $2,406.50 per metric ton. Aluminum descended by 2.76% to close this week at $2,132.50 per metric ton from last week’s closing price of $2,193.00. Tin bucked the trend and ended this week at $24,675.00 per metric ton, higher by 6.15% from last week’s close of $23,246.00.               

Energy and Oil

The research unit of China’s national oil company, CNPC, announced that China’s oil demand is expected to peak by the year 2030 at approximately 15.6 to 16 million barrels per day. However, even sooner, Chinese oil demand has been slowing down into the fourth quarter of this year. Last week’s announcement of OPEC+ production cuts has failed to create a significant reaction in the market, with non-OPEC supply continuing to grow (Guyana is starting its third FPSO this month). These developments contribute to a less-than-rosy outlook for an increase in oil prices. Both the WTI and Brent dropped to their lowest readings since June, falling below $69 and $74 per barrel respectively, before bouncing back to regain some of those losses on Friday morning. To break the bearish sentiment in the oil market that has materialized over the past week would necessitate some very optimistic macroeconomic news or major supply disruption. In the U.S., gasoline prices continue to decline as the national average dropped to $3.185 per gallon on Friday. This is the lowest price since January and may continue to drop below the $3 per gallon threshold by Christmas for the first time since 2021.    

Natural Gas

For the report week from Wednesday, November 29, to Wednesday, December 6, 2023, the Henry Hub spot price rose by $0.03 from $2.70 per million British thermal units (MMBtu) to $2.73/MMBtu. Regarding the Henry Hub futures market, the price of the January 2024 NYMEX contract decreased by $0.235, from $2.804/MMBtu at the start of the report week to $2.569/MMBtu at the end of the report week. The price of the 12-month strip averaging January 2024 to December 2024 futures contracts declined by $0.238 to $2.746/MMBtu.

International natural gas futures prices decreased for this report week. The weekly average front-month futures prices for liquefied natural gas (LNG) cargoes in East Asia decreased by $0.47 to a weekly average of $16.10/MMBtu. Natural gas futures for delivery at the Title Transfer Facility (TTF) in the Netherlands, the most liquid natural gas market in Europe, decreased by $1.06 to a weekly average of $12.91/MMBtu. In the week last year corresponding to this report week (week from November 30 to December 7, 2022), the prices for international gas futures prices were $32.98/MMBtu in East Asia and $42.95/MMBtu at the TTF.

World Markets

Shares in Europe advanced for the fourth straight week on expectations that banks may cut interest rates in the coming year. The pan-European STOXX Europe 600 Index ascended by 1.30% as stocks received a lift from optimism among investors that inflation would be slowing and European economies have been cooling. Major stock indexes in the region have tracked the European index. France’s CAC 40 Index rose by 2.46%, Germany’s DAX climbed by 2.21%, and Italy’s FTSE MIB gained 1.59% for the week. The UK’s FTSE 100 Index added 0.33%. Meanwhile, European government bond yields ended generally lower as pronouncements by some European Central Bank (ECB) officials spurred hopes that interest rate reductions may be seen during the first half of the new year. The yield on the benchmark 10-year German bond descended towards its lowest levels during the year-to-date period, while the Italian government bond yields likewise slid. The 10-year UK government bond yield dropped to below 4% for the first time since the middle of May on speculation that the Bank of England may begin reducing borrowing costs by mid-2024. In the meantime, however, Germany’s economy struggled as its jobless rate rose, and the UK housing market continued to weaken.

In Japan, the stock market descended over the week, with the Nikkei 225 Index plummeting by 3.4% and the broader TOPIX Index sliding by 2.4%. Speculation went rife on the back of comments by officials of the Bank of Japan (BoJ) that the bank may abandon its policy of negative interest rates sooner than expected, weighing on riskier assets. Data showing that Japan’s economy contracted by more than initially estimated in the third quarter of 2023 brought greater pressure on equities. The yield on the 10-year Japanese government bond (JGB) rose to 0.77% from 0.71% at the end of the previous week amid the perceived BoJ hawkishness. Another factor that pushed yields higher was a notably weaker-than-expected 30-year JGB auction. Meanwhile, the yen strengthened to the new low-144 level against the U.S. dollar from 146.8 at the end of the week before, due to growing speculation about BoJ policy normalization. This is the currency’s highest level in nearly four months, which is also partially due to anticipation of reduced interest rate differentials with the U.S. The market consensus appears to be converging around the view that the Federal Reserve has completed its cycle of raising interest rates for now.

Chinese stock indexes fell as a result of a credit downgrade on China’s sovereign debt by Moody’s credit rating agency, further underscoring the country’s uncertain economic outlook. The Shanghai Composite Index lost by 2.05% on this week’s trading, while the blue-chip CSI 300 plunged by 2.4% after it fell midweek to its lowest level in almost five years. The Hong Kong benchmark Hang Seng Index plunged 2.95%. On Tuesday, Moody’s downgraded its outlook for China’s government bonds from “stable” to “negative,” citing the country’s debt-heavy local governments and state firms as posing significant economic downside risks. China has been grappling with a yearslong property market downturn and negative consumer and business confidence. The flurry of pro-growth stimulus measures adopted by Beijing earlier this year has been deemed by analysts to be insufficient to revive the economy.

The Week Ahead

For this week, the important economic data scheduled for release include the November CPI and PPI inflation data, the FOMC meeting, and import price index data for November.

Key Topics to Watch

• Consumer price index for November
• Core CPI for November
• CPI year over year
• Core CPI year over year
• Monthly U.S federal budget for November
• Producer price index for November
• Core PPI for November
• PPI year over year
• Core PPI year over year
• FOMC interior rate decision
• Fed Chairman Jerome Powell press conference
• Initial jobless claims for Dec. 9
• Import price index for November
• Import price index minus fuel for November
• U.S. retail sales for November
• Retail sales minus autos for November
• Business inventories for November
• Empire State manufacturing survey for December
• Industrial production for November
• Capacity utilization for November

Markets Index Wrap-Up

Stock Markets

All major indexes ended the week and month on a strong run. According to the Wall Street Journal Market Data, the Dow Jones Industrial Average surged by 2.42% even as the DJ Total Stock Market ended 1.16%. The broad-based S&P 500 Index gained 0.77% while the technology tracker Nasdaq Stock Market Composite advanced by 0.38%. The NYSE Composite likewise added 1.75% for the week. The investor risk indicator CBOE Volatility Index (VIX) rose by 1.36%. The weekly winning streak resulted in the first monthly gain by the S&P 500 for July.

The stellar performance for the last week of November was due to favorable news that addressed all the key concerns of the market. The inflation rate continued on its downtrend to the relief of worried investors, prompting the Federal Reserve to comment that it did not see the need to tighten policy from this point on. Corporate earnings came in better than expected, and the economy appeared to defy the gravity of high interest rates. The encouraging macroeconomic performance in November gave the impression that strengthening fundamentals may support further improvement, although this did not discount the possibility of an occasional hiccup now and then as we advance to 2024. It is safe to say, however, that 2023 is headed towards the market’s highs for the year, which promises to springboard towards a strong opening for the new year.

U.S. Economy

The Commerce Department reported on Thursday that the core personal consumption expenditures (PCE) price index, which excludes food and energy, rose 0.2% in October, marking a slowdown from September. The core PCE index is the Federal Reserve’s preferred inflation gauge since it does not include the more volatile components of consumer spending. This brings the indicator’s year-over-year increase down to 3.5% which is the lowest level since April 2021, although it is still well above the Fed’s 2% target. Core PCE was running even slower over the past six months, chalking up an annualized rate of 2.5%.

A noted Fed hawk, Boar Member Christopher Waller, surprised investors when he announced before the inflation data release that he was “increasingly confident that policy is currently well positioned to slow the economy and get inflation back to 2 percent.” Despite cautioning that further work remained in controlling inflation, he nevertheless acknowledged that “we have seen the most rapid decline in inflation on record,” and that the Fed may start to lower the policy rate if inflation continues to moderate over the coming three to five months.

There was more news to indicate that the economy was indeed headed towards a “soft landing.” In September, personal spending rose by 0.2%, its smallest increase in six months. Personal incomes rose at the same rate. Housing permits rose above expectations although actual starts were lower than expected. The weekly jobless claims inched downward, however, continuing claims climbed above expectations to 1.93 million, their highest level since 2021. The release of the Fed’s Beige Book on Thursday may have boosted hopes that the economy is in the “Goldilocks” scenario – neither too hot nor too cold. The economic activity of the 12 separate districts periodically surveyed by the Fed was split down the middle, with half reporting contraction and the other half reporting growth.

Metals and Mining

Gold did not do much through most of the year, but the past week has given some hope to investors as the precious metals market closed November with strong gains. The market showed its resilience as it bounced off critical support levels and this week set new all-time closing highs. February futures ended the week around $2,090 per ounce and the market realized a healthy gain of more than 4%. Gold prices shot up as investors priced in a potential rate cut as early as March. When the week began, consensus estimated a rate cut by the end of the first quarter of 2024 at 25%. After pronouncements by Fed officials that policy rates may be coming down sooner, those expectations jumped to 52.5%. The worst-case scenario appears to be that the Fed may keep interest rates higher for a little longer than expected, but the central bank’s next move may be likely a cut, making non-yielding assets like precious metals even more attractive.

The spot market for precious metals was mostly up for the week. Gold came from its close last week at $2,000.82 to settle this week at $2,072.22 per troy ounce, up by 3.57%. Silver, which closed a week ago at $24.33, ended this week at $25.49 per troy ounce for a gain of 4.77%.  Platinum gained 0.26% over its close last week at $934.75, ending this week with a closing price of $937.15 per troy ounce. Palladium bucked the trend and lost 6.23% from its previous weekly close at $1,073.00 when it ended this week at $1,006.13 per troy ounce. The three-month LME prices for base metals were mixed for this week. Copper came from last week’s close at $8,409.50 to end this week at $8,464.50 per metric ton for a weekly gain of 0.65%. Zinc lost 2.44% from its previous week’s close at $2,537.50 to end this week at $2,475.50 per metric ton. Aluminum descended by 1.42% from its close last week at $2,224.50 to settle this week at $2,193.00 per metric ton. Tin declined by 5.03% from last week’s closing price of $24,476.00 to end this week at $23,246.00 per metric ton.

Energy and Oil

OPEC+ members agreed to voluntary production cuts that total 2.2 million barrels per day (b/d) for the first quarter of 2024. Saudi Arabia, the group’s de facto leader, rolled over its current voluntary cut of 1 million b/d while Russia increased its pledge to 500,000 b/d. The oil market response to the new OPEC+ deal of 2.2 million b/d voluntary cuts was lukewarm, with Brent erasing all its earlier gains and falling back to $81 per barrel. The production target confusion was aggravated by the fact that markets expected deeper cuts, going over and above what Saudi Arabia or Russia have already curbed from their output. These developments led even the most seasoned industry watchers to begin losing track of which country will be cutting what amount against which reference level, adding further confusion to the direction the market will go.

Natural Gas

For the report week beginning Wednesday, November 22, and ending Wednesday, November 29, 2023, the Henry Hub spot price fell by $0.02 from $2.72 per million British thermal units (MMBtu) to $2.70/MMBtu. Regarding the Henry Hub futures price, the December 2023 NYMEX contract expired on November 28, Tuesday, at $2.706/MMBtu, down by $0.19 from the start of the report week. The January 2024 NYMEX contract price decreased to $2.804/MMBtu, down by $0.23 from the start to the end of the report week. The price of the 12-month strip averaging January 2024 through December 2024 futures contracts declined by $0.12 to $2,983/MMBtu.

International natural gas futures prices declined this report week. The weekly average front-month futures prices for liquefied natural gas (LNG) cargoes in East Asia decreased by $0.26 to a weekly average of $16.57/MMBtu. Natural gas futures for delivery at the Title Transfer Facility (TTF) in the Netherlands, the most liquid natural gas market in Europe, decreased by $0.45 to a weekly average of $13.97/MMBtu. In the week last year corresponding to this week (the week from November 23 to November 30, 2022), the prices were $31.01/MMBtu and $40.01/MMBtu in East Asia and at the TTF, respectively.

World Markets

This week European stocks rose on optimism about inflation coming under control. The pan-European STOXX Europe 600 Index closed 1.35% higher on news of a steep decline in inflation and falling bond yields, raising investor sentiment. Major stock indexes in the region similarly rose. France’s CAC 40 Index rose by 0.73%, Italy’s FTSE MIB gained by 1.69%, and Germany’s DAX outperformed both by climbing 2.30%. The UK’s FTSE 100 Index added 0.55%. Lower-than-expected inflation data raised expectations that the European Central Bank (ECB) may consider cutting interest rates next year, sending European government bond yields broadly lower this week. In Germany, the yield on the benchmark 10-year government bond descended to its lowest level in more than four months, while the yield on the benchmark 10-year Italian bond fell toward 4%. Bond yields in the UK bucked the broader trend and rose instead from midweek lows, in reaction to hawkish comments by ECB policymakers who commented that despite the drop in the inflation rate, it is not yet time for rate cuts. 

Japan’s stock market ran counter to the broad trend and fell over the week. The Nikkei 225 Index lost by 0.6% while the broader TOPIX Index slid by 0.4%. The sell-off was mostly due to profit-taking after equities rallied in November of expectations that the U.S. interest rates may have peaked. The surging market this month was also supported by a strong corporate earnings season and weakness in the yen that impacted stocks favorably. The yield on the 10-year Japanese government bond fell to 0.71%, from what was 0.77% the week before, tracking the weakness in the U.S. bond market spurred by dovish remarks from the Fed amid signs of slowing economic activity. The yen strengthened to the high-JPY 147 range versus the U.S. dollar from the mid-JPY 149 range in the week before. It was an environment of general weakness in the greenback, due largely to anticipation that policy rates may be cut by the Fed by the first quarter of next year. In the economic arena, the government committed to adopting necessary measures to cushion the negative effects of recent price hikes. It aims to boost growth and help households cope with the rising cost of living by adopting a new economic stimulus package worth more than USD 110 billion.

Chinese stocks likewise declined in response to official indicators that underscored worries about the country’s fragile recovery. The Shanghai Composite Index dropped by 0.31% and the blue-chip CSI 300 gave up 1.56% for the week. Hong Kong’s benchmark Hang Seng Index slumped by 4.15%. October’s economic data presented a mixed picture of China’s economy. The official manufacturing Purchasing Managers’ Index (PMI) surprised on the downside with a below-consensus 49.4 in November. It is lower than October’s 49.5, marking the second straight monthly contraction. The non-manufacturing PMI descended to a lower-than-expected 50.2 in November from 50.6 in October, but since the reading exceeded 50, growth remains expansionary albeit to a lesser degree. Another indicator, the private Caixin/S&P Global survey of manufacturing activity rose to a higher-than-forecasted 50.7 in November from 49.5 in October, as new order growth rose to the highest level since June. Furthermore, in Beijing’s latest effort to boost business confidence, Chinese authorities issued a 25-point plan to strengthen financial support for the private sector. The measures are geared towards unblocking financial channels such as loans, bonds, and equity financing.

The Week Ahead

This week, among the important economic data expected to be released, are the October JOLTS report, the November unemployment rate, and preliminary consumer sentiment for December.

Key Topics to Watch

• Factory orders for October
• S&P U.S. services PMI for November
• ISM services for November
• Job opening for October
• ADP employment for November
• U.S. productivity (revision) for Q3
• U.S. trade deficit for October
• Initial jobless claims (December 2)
• Wholesale inventories for October
• Consumer credit for October
• Consumer sentiment (prelim) for December
• U.S. unemployment report for November
• U.S. unemployment rate for November
• U.S. hourly wages for November
• Hourly wages year-over-year

Markets Index Wrap-Up

Stock Markets

The past week was a holiday-shortened trading week as the Thanksgiving celebration closed the markets on Thursday while Friday saw a truncated trading session that ended at 1 p.m. EST instead of the usual 4 p.m. The major stock indexes ended up on mostly quiet trading. The Dow Jones Industrial Average (DJIA) advanced by 1.27% while the DJ Total Stock Market Index performed almost as well by gaining 1.25%. The broad-based S&P 500 Index gained 1.13% and the technology-tracking Nasdaq Stock Market Composite inched up by 0.97%. The NYSE Composite Index ascended by 1.70%. Investor risk perception eased as the CBOE Volatility Index (VIX) descended by 12.99%. The shortened trading session on Friday was also followed by bond markets which also closed early in observance of the holiday weekend.

The markets have historically performed well after Thanksgiving such that for three decades, the average return in December has been recorded at 1%. Three-fourths of the time, the market registered post-holiday gains, so much of the uptick may be attributed to seasonality, with market gains expected to continue the following year. Leading to Thanksgiving, the market trekked an upswing that added to a strong year-to-date gain. Going back to the 1950s, there were 19 instances when the market came into the holiday season with a year-to-date gain of 20% or more; the average return was 17% in the year that followed.

This week, there was one third-quarter earnings report carefully monitored by investors. NVIDIA is an artificial intelligence chipmaker that was recently the world’s sixth-largest company by market capitalization. The company beat earnings and revenues estimates in its earnings report this week but issues forward-looking cautious guidance due to export restrictions to China. The weakness in NVIDIA’s stock prices impacted Nadaq’s Composite Index, although overall, growth stocks outperformed value stocks

U.S. Economy

A couple of notable economic releases punctuated an otherwise quiet holiday trading week. The Commerce Department on Wednesday reported that durable goods orders in October had fallen by 5.4%, chalking up the second-biggest decline since April 2020. The slide was largely attributable to a steep drop in highly volatile civilian aircraft orders. However, orders excluding aircraft and defense purchases (typically considered a proxy for business investment) also lost ground slightly for the second straight month.

The second market-moving economic news was released by S&P Global on Friday regarding its estimates of growth in business activity in November. The report reflected the fastest pickup in the services sector in the last four months, compensating for a bigger-than-expected slowdown in manufacturing. S&P also noted, however, that “relatively subdued demand conditions and dwindling backlogs led firms to cut their workforce numbers for the first time since June 2020,” tempering market sentiment that perked at the reported acceleration in services.

Metals and Mining

While gold appears stuck in range trading, its striking distance of close to $2,000 can be viewed optimistically. The fact that it has reached this important milestone while most Western investors have shunned the market hints at exciting possibilities for gold as an investment even as it treads water. Simultaneously, the precious metal is approaching its best seasonal period of the year. Analysts noted that in the last six years, gold prices had seen an average return of 4% in December while silver prices have seen an average return of 7.25%. While there is reason for healthy optimism, potential risks still exist. The cease-fire between Israel and Hamas tends to reduce safe-haven demand for gold. The Federal Reserve also continues to hold sway over the future of precious metals. The minutes of the November monetary policy meeting of the Fed released this past week signaled policymakers’ continued intention towards a restrictive monetary policy for the foreseeable future.

The spot prices of precious metals went up this week. Gold closed the week at $2,000.82 per troy ounce, 1.01% above last week’s closing price of $1,980.82. Silver ended at $24.33 per troy ounce, 2.57% higher than the week ago’s $23.72 close. Platinum settled at $934.75 per troy ounce, higher by 3.55% from last week’s close at $902.72. Palladium ended at $1,073.00 per troy ounce for the week, gaining 1.53% from the previous week’s close at $1,056.78. The three-month LME prices of industrial metals were mixed. Copper gained by 1.72% from the prior week’s closing price of $8,267.00 to end the week at $8,409.50 per metric ton. Zinc, which closed at $2,555.00 a week ago, ended this week at $2,537.50 per metric ton for a slight loss of 0.68%. Aluminum, which came from a closing price of $2,207.00 the week previous, closed this week at $2,224.50 per metric ton to lock in a gain of 0.79%. Tin slid by 1.51% from last week’s closing price of $24,852.00 to finish this week at $24,476.00 per metric ton.

Energy and Oil

The volatility in oil prices over the past weeks was settled down as market participants await the results of the next OPEC meeting. The event was postponed from its original schedule this week to November 30 and was revised from an in-person summit to an online conference due to quota spat. Speculations ran rife that the negotiation of production quotas with African oil producers Angola, Nigeria, and the Congo, has been met with significant resistance. OPEC+ said after its last meeting in June that the 2024 output quotas of the three were conditional on reviews by outside analysts. Other members of the group defy calls to chip in with cuts. The surprise delay of the meeting sent oil prices sliding, The ICE Brent front-month futures have settled within a narrow range of $81-83 per barrel for the entire week, with the main developments firmly focused on the Eurasian landscape in light of the Thanksgiving holidays in the U.S. Higher U.S. inventories offset a better outlook for China’s property sector, thus the trendsetter for the next weeks’ pricing direction remains with the OPEC+ impending meeting.

Natural Gas

Colombia’s national oil company Ecopetrol is planning to start importing natural gas from Venezuela. The move is prompted by the cheaper cost offered by Venezuela at $5 per MMCf which is significantly lower than Colombia’s current import options. In other developments, the U.S. Federal Energy Regulator Commission greenlighted Freeport LNG’s request to ramp up production to full capacity, bringing Phase II infrastructure back and taking the total liquefaction rate back to 2.1 billion cubic feet per day.

World Markets

The pan-European STOXX Europe 600 Index rose by 0.91% in local currency terms amid hopes that central banks may start cutting interest rates in the next year’s first semester. The major stock indexes in the region were listless in the absence of any strong trend. Germany’s DAX climbed by 0.69% and France’s CAC 40 Index did a bit better by rising 0.81%, but Italy’s FTSE MIB dipped by 0.22% and the UK’s FTSE 100 slid by 0.21%. European government bond yields moved higher. Germany’s 10-year government bond edged up from a more than two-month low of 2.516% earlier in the week. The yields climbed after Germany was reported to contemplate suspending debt limits for the fourth consecutive year. Additional support was due to statements suggesting that the European Central Bank (ECB) policymakers are determined to keep monetary policy tight for the time being. French and Swiss bond yields also rose. In the U.K., the Purchasing Managers’ Index (PMI) unexpectedly rose into positive territory in November, moving the yield on the 10-year benchmark bond higher. The ECB tried to dampen hopes of any impending rate cuts by reiterating that the fight to rein in inflation was not finished and may last for “the next couple of quarters.”

Japan’s equities markets recorded modest returns for the week as the Nikkei gained by 0.1% and the broader TOPIX remained flat. In early optimistic trading during the week, the Nikkei rose to its highest level since 1990 on the back of a strong domestic corporate earnings season. Manufacturers’ earnings benefited from weakness in the yen and easing supply chain constraints. Sentiment was also supported by expectations that the U.S. interest rates may have peaked, pushing growth stocks noticeably higher. Economic news also created some impact, with a hot October consumer inflation report stoked speculation that the Bank of Japan (BoJ) may push further monetary policy normalization. According to flash PMI data, private sector activity stalled in November, due mainly to further deterioration in business conditions in manufacturing. Based on these developments, the yield on the 10-year Japanese government bond (JBG) ascended to 0.77% from 0.72% at the end of the previous week. For the second consecutive week, the BoJ reduced its JGB purchase operations. In the currency market, the yen finished the week mostly unchanged despite initially strengthening to its highest level in more than two months and amid general weakness in the U.S. dollar. The yen remained at about JPY 149 against the greenback.

Chinese stocks retreated despite news that Beijing may introduce fresh stimulus measures for the property sector as investors viewed the announcement as inadequate to alleviate the country’s broader economic concerns. The Shanghai Composite Index dipped by 0.44% while the blue-chip CSI 300 gave up 0.84%. Hong Kong’s benchmark Hang Seng Index inched up by 0.6%. A funding plan was formulated by Chinese regulators for property developers in the hope of staving off an ongoing property crisis. Reportedly including 50 private and state-owned developers, the list will act as a guide for financial institutions to deliver a range of financial measures to strengthen balance sheets. In a separate move, the National People’s Congress, China’s parliament, encouraged banks to accelerate support measures for real estate developers to reduce the risk of further defaults and ensure the completion of outstanding housing projects. The reports dovetail with recent property data underscoring a current downturn in a crucial sector of China’s economy. Property investment, sales, and new home prices plummeted in October. Economists expect that Chinese government advisers may propose an economic growth target of 5% in 2024 at the annual Central Economic Work Conference scheduled in December. The measure will aim to promote job growth and to ensure that long-term development goals remain attainable.

The Week Ahead

Among the important economic data scheduled for release in the coming week are the November ISM manufacturing report, the Personal Consumption Expenditures (PCE) inflation data, and the first revision for the third quarter Gross Domestic Product (GDP).

Key Topics to Watch

• New home sales for October
• S&P Case-Shiller home price index (20 cities) for September
• Consumer confidence for November
• Fed Gov Christoper Waller speaks
• Chicago Fed President Austan Goolsbee speaks (Nov. 28)
• Fed Governor Michelle Bowman speaks
• Fed Governor Michale Barr speaks (1:05 p.m., Nov. 28)
• Fed Governor Michale Barr speaks (3:30 p.m., Nov.28)
• GDP (first revision) for Q3
• Advanced U.S. trade balance in goods for October
• Cleveland Fed President Moretta Mester speaks
• Fed Beige Book
• Initial jobless claims (Nov. 25)
• Personal income (nominal) for October
• Personal spending (nominal) for October
• PCE index for October
• Core PCE index for October
• PCE (year-over-year)
• Core PCE (year-over-year)
• New York Fed President John Williams speaks
• Chicago Business Barometer (PMI) for November
• Pending home sales for October
• Fed Governor Michael Barr speaks (Dec. 1)
• ISM manufacturing for November
• Construction spending for October
• Chicago Fed President Austan Goolsbee speaks (Dec. 1)
• Fed Chair Jerome Powell speaks (Dec. 1)
• Fed Chair Jerome Powell and Fed Governor Lisa Cook talk to local leaders in Atlanta
• Auto sales for November

Markets Index Wrap-Up

Stock Markets

All stock indexes were up this week in apparent reaction to inflation resuming its downward trajectory in October from its brief acceleration in late summer. The Dow Jones Industrial Average (DJIA) ended the week 1.94% higher than the week before, with the broader DJ Total Stock Market Index ending 2.55% up. The global S&P 500 Index closed 2.24% up for the week while the technology-heavy Nasdaq Stock Market Composite similarly surged by 2.37%. The NYSE Composite gained by 2.76%. The indicator for investors’ risk perception, the CBOE Volatility (VIX) Index ended lower by 2.61%.

This week’s performance saw the S&P 500 Index moving above the 4,500 barrier for the first time since September, thus building on its strong gains over the previous two weeks. The advance registered across the board as the equally weighted S&P 500 Index outperformed its market-weighted version by a full percentage point. The Russell 1000 Value Index likewise did better than its growth counterpart as it moved back into positive territory for the year to date. Similarly, outperforming were the small cap indexes. Strong performance results from retailers Target and Walmart seem to contribute to the rally, but since the third-quarter reporting season was winding down, the surge could be largely attributed to macroeconomic factors.

U.S. Economy

The Labor Department reported on Tuesday that its headline consumer price index remained unchanged in October, due in part to a sharp decrease in energy costs. Core CPI (excluding food and energy prices) rose 0.2%, which resulted in an increase in the year-over-year figure to 4.0%. This is the indicator’s slowest rate in two years. The producer price inflation rate, released the following day, was also surprisingly lower than expected. Another hopeful sign that inflation might have peaked was the American Farm Bureau’s annual Thanksgiving survey which it released on Wednesday. The report showed that a typical dinner was expected dinner to cost 4.5% less in 2023 compared to the year before, due to falling prices for seven out of 11 food items (including turkey). While the may be a bit of good news, the meal still costs significantly more than it had in 2021, totaling $61.17 compared to $53.31 two years ago.

Other news that lifted investor sentiments was contained in Wednesday’s retail sales report from the Commerce Department. Unadjusted for inflation, retail sales fell by 0.1% in October, which was lower than expected and partly due to a reduction in gasoline and auto sales. Home-related spending on furniture and building materials continued to decline, although consumer spending continued to increase at bars and restaurants and online. The signs of cooling inflation contributed to a further drop in long-term Treasury yields. The benchmark 10-year note briefly touched an intraday low of about 4.40% on Friday, its lowest level since mid-September. The falling yields confirm a change in Fed policy. Overall, economic data are reflecting the right balance, not too hot nor too cold, leaving the October correction as a thing of the past.

Metals and Mining

Solid bullish momentum was reflected in the gold market this week as prices bounced off a three-week low, but confirmation is still elusive as the precious metal has not yet sustained a convincing breakout above the $2,000 resistance level. In the right economic environment, gold’s price action hints at much potential. However, the consensus of analysts is that the conditions are not yet in place to sustain a rally to all-time highs. This week, gold’s 2% rally was helped by the U.S. CPI showing annual inflation rising 3.2% in October. Simultaneously, core inflation rose by 4.0%, the smallest 12-month increase since September 2021. Producer inflation also dropped by 0.5% in October, the biggest one-month decline since April 2020. The weak inflation figures drew investor attention once more to a potential change in the Fed’s monetary policy and the possibility of a rate cut by May. But until the Fed reverses its tightening bias, investors in gold should patiently look for tactical buying opportunities while waiting for the bullish market with the strong return of institutional investors.

The spot prices of precious metals are up this week. Gold gained 2.09% from last week’s closing price of $1,940.20 to this week’s closing price of $1,980.82 per troy ounce. Silver advanced by 6.51% from last week’s close at $22.27 to this week’s close at $23.72 per troy ounce. Platinum surged by 6.73% from its week-ago price of $845.83 to its latest close at $902.72 per troy ounce. Palladium soared by 9.88% from its prior weekly close at $961.77 to its close this week at $1,056.78 per troy ounce. The three-month LME prices of industrial metals were mixed this week. Copper went from its closing price last week of $8,035.50 to its closing price this week of $8,267.00 per metric ton for an appreciation of 2.88%. Zinc declined by 0.27% from last week’s close at $2,562.00 to this week’s close at $2,555.00 per metric ton. Aluminum slid by 0.36 from its price last week of $2,215.00 to its price this week of $2,207.00 per metric ton. Tin climbed by 1.01% from its closing price last week of $24,603.00 to its closing price this week of $24,852.00 per metric ton.

Energy and Oil

Oil prices saw their lowest prices this week since July. WTI fell to $73 per barrel on its fourth straight weekly loss. The decline resulted from a combination of weak U.S. economic data and CTA trading patterns that aggravated the decline. Labor market data out this week in the U.S. points to signs of cooling off, with initial jobless claims rising to their highest since August, and continuing jobless claims also on the rise, hitting their highest in two years. However, both remain below their historical averages over the past 50 years. The softening labor demand signals that companies will slow hiring to protect their profitability. In any case, the WTI has shed its previous levels of steep backwardation (a situation where future prices are lower than spot prices) and is now in contango (situation where future prices are higher than spot prices) in the prompt months (the calendar months when the arrival period ends). Oil prices did, however, begin to bounce back on Friday despite the negative sentiment, with Brent rising to $78.50 and WTI trading at $73.86.

Natural Gas

For the report week beginning Wednesday, November 8, and ending Wednesday, November 15, 2023, the Henry Hub spot price advanced by $0.66 from $2.21 per million British thermal units (MMBtu) when the week began to $2.87/MMBtu by the week’s end. In Henry Hub futures, the price of the December 2023 NYMEX contract increased by $0.003, from $3.106/MMBtu at the start of the report week to $3.109/MMBtu by the week’s end. The price of the 12-month strip averaging December 2023 through November 2024 futures contracts declined by $0.022 to $3.284/MMBtu.

International natural gas futures price changes were mixed this report week. The weekly average front-month futures prices for liquefied natural gas (LNG) cargoes in East Asia declined by $0.29 to a weekly average of $17.17/MMBtu. Natural gas futures for delivery at the Title Transfer Facility (TTF) in the Netherlands, the most liquid natural gas market in Europe, increased by $0.33 to a weekly average of $14.97/MMBtu. In the week last year corresponding to this report week (November 9 to November 16, 2022) the prices were $27.06/MMBtu in East Asia and $34.10/MMBtu at the TTF. 

World Markets

European stocks ended higher for the week on hopes in financial markets that central banks would soon be cutting interest rates. The pan-European STOXX Europe 600 Index climbed for the week and ended 2.82% above last week’s close in local currency terms. Major stock indexes rose sharply in the region. France’s CAC 40 Index gained by 2.68%, Italy’s FTSE MIB added 3.49%, and Germany’s DAX surged by 4.49%. The UK’s FTSE 100 Index ascended by 1.95%. Bond yields throughout Europe declined as a result of data indicating that inflationary pressures have eased. The yield on the 10-year German government bond inched lower on the perception that central banks may embark on rate cuts next year. Similarly, Swiss, French, and Italian sovereign bond yields moved lower. The yield on the 10-year UK government bond slipped toward 4.1%. European Central Bank (ECB) President Christine Lagarde announced that policymakers expected that inflation may accelerate at the start of next year, but even if it did, another interest rate increase may not be needed.

In Japan, the stock market rose as risk appetite was boosted by the recent U.S. inflation data. The Nikkei 225 Index gained by 3.1% while the broader TOPIX Index advanced by 2.3%. Earnings announcements that surprised on the upside provided some of the momentum for stock price gains, while weak third-quarter gross domestic product (GDP) data had no impact on investor sentiment. The U.S. inflation report which came below expectations signaled the imminence of an economic soft landing, furthering hopes that interest rates have peaked. The yield on the 10-year Japanese government bond (JGB) plunged to 0.72% from 0.85% at the end of the previous week, following the growing weakness of U.S. bond yields. As a result, the Bank of Japan was prompted to reduce the offer amounts for its regular purchase of JGBs in an attempt to limit volatility in yield movements. Expectations of an end to U.S. monetary policy tightening provided support to the yen, which ended the week higher, at about JPY 149 to the U.S. dollar.

Chinese equities ended mixed after official indicators underscored the country’s economic fragility. The Shanghai Composite Index climbed by 0.51% while the blue-chip CSI 300 Index fell by 0.51%. Hong Kong’s benchmark Hang Seng Index gained by 1.46%. A mixed picture of China’s economy was reflected in the official data for October. Surprising on the plus side, industrial production and retail sales grew year-on-year by more than forecasted. On the other hand, fixed asset investment growth was poorer than expected due to weaker infrastructure growth and real estate investment. Unemployment remained unchanged from September. New bank loans rose by RMB 738.4 billion in October which was higher than consensus estimates, but which was lower than September’s reading of RMB 2.31 trillion due to seasonal downturn in corporate lending. Official data also showed that the slump in the housing market deepened in October. Investment in property development fell by 9.3% in the first 10 months of the year which exceeded consensus, compared to a 9,1 decline in the January to September period, as determined by the National Bureau of Statistics. Between January and October 2023, property sales slumped by 7.8% compared to the same period in 2022. New home prices in 70 of China’s largest cities fell by 0.38% last month from September, marking the largest month-on-month drop since February 2015.

The Week Ahead

This week, important economic data expected for release include the November S&P Global Purchasing Managers Index (PMI) data for service and manufacturing, and the U.S. leading economic indicators for October.

Key Topics to Watch

• U.S. leading economic indicators for October
• Richmond Fed President Tom Barkin TV appearance
• Existing home sales for October
• Minutes of Fed’s Oct. 31 – Nov. 1 FOMC meeting
• Initial jobless claims for Nov. 18
• Durable goods orders for October
• Durable goods minus transportation for October
• Consumer sentiment (final) for November
• S&P flash U.S services PMI for November
• S&P flash U.S. manufacturing PMI for November

Markets Index Wrap-Up

Stock Markets

After the stock market’s strong run-up over the past weeks when the S&P 500 Index came close to reprising its longest winning streak in nearly two decades, equities lost steam and ended mixed for the week. According to the Wall Street Journal Markets tracker, the Dow Jones Industrial Average (DJIA) eked out a 0.65% gain for the week, and its Total Stock Market Index a 0.91% return as well. The S&P 500 Index ascended by 1.31% while the technology-heavy Nasdaq Stock Market Composite climbed by 2.37%. However, the NYSE Composite declined by 0.56%. The risk perception metric CBOE Volatility Index (Vix) receded by 4.96%.

On Wednesday, the S&P 500 achieved its eighth consecutive gain and the Nasdaq Composite registered its ninth straight gain. The gains were extremely narrow, however. The equally weighted version of the S&P 500 trailed its market-weighted version by 190 basis points, or 1.90%. It was not surprising that the market ran out of momentum as this was one of the final weeks of major third-quarter corporate earnings releases. Some support to the growth counters was provided by upside surprises among some of the technology-oriented firms. Cloud monitoring and security firm Datadog surged 20% on Tuesday after it reported stronger-than-expected earnings and guidance, thus providing a general boost to high-valuation software stocks. However, the initial catalyst that ended the winning streak of major indexes appeared to be the $24 billion auction of 30-year U.S. Treasury bonds last Thursday, which was met with the weakest demand in two years.

U.S. Economy

Investors have been keeping close watch lately as to whether demand will be able to keep up with the government’s elevated borrowing needs, especially after the temporary lifting of the federal debt ceiling. Very few economic data were released this week, most of which were close to expectations. The lone exception was the release on Friday of the University of Michigan’s preliminary measure of consumer sentiment which, contrary to expectations, fell to its lowest level in six months. The survey’s chief researcher attributed this to the wars in Gaza and Ukraine exacerbating worries about the likelihood of higher interest rates. Also reaching higher than previous records was the expectation that long-run inflation rates would4.9 hit 3.2%, the highest level in the survey since 2011.

The economy has remained surprisingly resilient over the first three quarters of this year. The third-quarter GDP annualized growth rate of 4.9% was, in fact, the strongest since 2021 and significantly above what is considered the trend growth in the U.S. of 1.5% to 2.0%. The strong economic growth has so far been driven by personal consumption which so far this year has surprised on the upside. Historically, the U.S. economy has been driven by consumers, as attested to by consumer spending comprising approximately 70% of U.S. GDP.  The question remains as to whether this trend may be slowing in the weeks to come. Since the end of the pandemic period when households were flushed with stimulus cash, the household savings rate has declined to near post-pandemic lows as recent spending has eased pent-up demand. Consumers are spending less than usual due to rising costs and stimulus-era savings depletion. Credit card debt has risen fsto more than $1 trillion in the third quarter of 2023, its highest on record. Bank lending standards have remained tight and consumers continue to face higher interest rates.  As a result, businesses and consumers will face greater difficulty in securing loans.

Metals and Mining

During Thursday’s meeting conducted by Federal Reserve chair Jerome Powell, he warned markets that while inflation has come down from last y ear’s 40-year highs, the central bank is not confident that it has inflation well under control sufficiently to shift from its present tightening stance. He added that the Federal Reserve would not hesitate to raise interest rates further if inflation pressures continue to intensify. This sent negative signals to investors who hitherto were hoping that the Fed was ready to adopt a more dovish bias enough to reverse interest rates and bring them down. Gold investors did not like the message and dropped gold prices below their $1,950 per ounce support.

Over the past week, the spot prices of precious metals were significantly down. Gold, which held at $1,992.65 last week, well above the $1,950 support, ended this week below it at $1,940.20 per troy ounce for a drop of 2.63%.  Silver lost 4.05% of its value, dropping from $23.21 the week before to $22.27 per troy ounce this week. Platinum came from $934.75 on its previous week’s close to $845.83 per troy ounce this week, falling by 9.51%. Palladium took a 14.26% hit as it fell from the previous week’s closing price of $1,121.78 to this week’s closing price of $961.77 per troy ounce. The three-month LME prices of industrial metals ended mixed for the week. Copper ended the week at $8,035.50 per metric ton, lower by 1.32% from its price last week of $8,143.00. Zinc ended higher at $2,562.00 per metric ton, 3.39% up from its ending price the week before of $2,478.00. Aluminum closed this week at $2,215.00 per metric ton, slightly lower by 0.56% from last week’s close at $2,227.50. Tin ended the week at $24,603.00 per metric ton, 2.68% higher than the previous week’s closing price of $23,962.00.              

Energy and Oil

Oil prices struggled this week to maintain their levels as they were battered by inventory build-ups, the weaker=than-expected Chinese economic data, and weakening physical demand due to rising freight costs. ICE Brent was headed towards a week-on-week drop of $5 per barrel and is poised to settle at the $80 per barrel mark. Market sentiment is shifting towards a bearish outlook as investors pay close attention to OPEC+ and the actions it will take when it meets again on November 26 in Vienna after a prolonged break. In the meantime, Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman blames falling oil prices on speculators. He attributes the decline in oil prices to a “ploy” hiding the true strength of the oil markets. Speculators are allegedly abusing export figures, failing to distinguish them from production numbers.    

Natural Gas

For the report week covering Wednesday, November 1, to Wednesday, November 8, 2023, the Henry Hub spot price fell by $0.98 from $3.19 per million British thermal units (MMBtu) to $2.21/MMBtu. In the futures market, the price of the December 2023 NYMEX contract decreased by $0.388, from $3.494/MMBtu at the start of the report week to $3.106 by the week’s end. The price of the 12-month strip averaging December 2023 through November 2024 futures contracts declined by $0.199 to $3.306/MMBtu.

International natural gas futures prices declined over this report week. The weekly average front-month futures prices for liquefied natural gas (LNG) cargoes in East Asia fell by $0.36 to a weekly average of $17.46/MMBtu. Natural gas futures for delivery at the Title Transfer Facility (TTF) in the Netherlands, the most liquid natural gas market in Europe, decreased by $0.73 to a weekly average of $14.63/MMBtu. In the week last year corresponding to this report week (the week covering November 2 to November 9, 2022), the prices were $27.91/MMBtu in East Asia and $33.95/MMBtu at the TTF.  

World Markets

European stocks ended lower largely on concerns that rising inflation will continue to push interest rates upward. The pan-European STOXX Europe 600 Index sank by 0.21% this week as optimism dimmed that interest rates have peaked. The major stock indexes in the region were mixed. Germany’s DAX added 0.30%, Italy’s FTSE MIB lost 0.59%, and France’s CAC 40 Index was virtually unchanged. The UK’s FTSE 100 Index slid by 0.77%. As markets struggled with concerns that the interest rates will remain “higher for longer” as policymakers hawkishly contended, European government bond yield broadly climbed. Christine Lagarde, the European Central Bank (ECB) president, pronounced that it will take longer than “the next couple of quarters” before the ECB begins to reverse rates downward. The yield on Germany’s 10-year government bond climbed higher than 2.7%. Likewise, Italian bond yields surged higher. After data showed that the UK’s economy stagnated in the third quarter, UK bond yields became volatile. The country’s gross domestic product (GDP) in the third quarter was in line with the BoE’s forecast for zero growth, after expanding by 0.2% in the previous three months. Governor Andrew Bailey of the Bank of England (BoE) affirmed that it was “really too early” to talk about cutting interest rates.

  In Japan, stocks climbed over the week. The Nikkei 225 Index ended 1.9% higher than last week, and the broader TOPIX Index gained by 0.6% over the same period. The optimistic performance was buoyed by strong corporate earnings, continued currency tailwinds, and the government’s commitment to additional economic stimulus. The yen softened further past the JPY 151 level to the U.S. dollar from JPY 149 the week before. This is the yen’s lowest level in 33 years. Toward the end of the week, investors’ risk appetite was dampened by the hawkish comments from Federal Reserve Chair Jerome Powell that the Fed will not hesitate to further tighten monetary policy to contain inflation and fueling expectations that interest rates will remain higher for longer. Bank of Japan (BoJ) Governor Kazuo Ueda, on the other hand, warned of possibly serious consequences if the BoJ normalized short-term interest rates. The yield on the 10-year Japanese government bond (JGB) fell to 0.85% from 0,91% at the end of the previous week.

Chinese equities climbed as investors remained generally unaffected by data showing that consumer prices slid back into contraction, thus reviving the prospect of deflation that continues to overshadow the economy. The Shanghai Composite Index rose 0.27%, and the blue-chip CSI 300 gained by 0.07% over the week. The Hong Kong benchmark Hang Seng Index dropped by 2.61%. China’s consumer price index pulled back by 0.2% in October year-on-year after remaining unchanged in September, the result of lower pork prices weighing down food prices. In the meantime, the producer price index descended by 2.6% from a year ago. This marks the 13^th consecutive month of decline. A mixed snapshot of China’s economy was shown by the country’s trade data. In October, overseas exports declined by 6.4% year-on-year, surpassing the 6.2% decline in September due to softening global demand. Imports rose by 3%, however, which reversed the 6.2% contraction in September and marked the first year-on-year growth since September 2022. The overall trade surplus declined to $56.5 billion which is below consensus and down from $77.71 billion in September. These developments suggest that China’s economy remains fragile and its growth has not yet bottomed.

The Week Ahead

Among the important economic data due for release in the coming week are the consumer price index (CPI), the producer price index (PPI), and retail sales.

Key Topics to Watch

• Fed Governor Lisa Cook speaks (Mon., Nov. 13)
• Monthly U.S. federal budget
• New York Fed President John Williams speaks (Tues., Nov. 14)
• Fed Vice Chair Philip Jefferson speaks
• NFIB optimism index for October
• Consumer price index for October
• Core CPI for October
• CPI year over year
• Core CPI year over year
• Fed Vice Chair for Supervision Michael Barr testifies to Senate panel
• Chicago Fed President Austan Goolsbee speaks (Tues., Nov. 14)
• Producer price index for October
• Core PPI for October
• PPI year over year
• Core PPI year over year
• U.S. retail sales for October
• Retail sales minus autos for October
• Empire State manufacturing survey for November
• New York Fed President John Williams speaks (Wed., Nov. 15)
• Business inventories for September
• Fed Vice Chair for Supervision Michael Barr testifies to House panel
• Richmond Fed President Tom Barkin speaks
• Fed Vice Chair for Supervision Michael Barr speaks (Thurs., Nov. 16, 7:10 am)
• Initial jobless claims for November 11
• Import price index for October
• Import price index minus fuel for October
• Philadelphia Fed manufacturing survey for November
• Cleveland Fed President Loretta Mester speaks
• Industrial production for October
• Capacity utilization for October
• New York Fed President John Williams speaks (Thurs., Nov. 16)
• Home builder confidence index for November
• Fed Governor Christopher Waller speaks
• Fed Chair for Supervision Michael Barr speaks (Thurs., Nov. 16, 10:35 am)
• Fed Governor Lisa Cook speaks (Thurs., Nov. 16)
• Housing starts for October
• Building permits for October
• Boston Fed President Susan Collins speaks
• Fed Vice Chair for Supervision Michael Barr speaks (Fri., Nov. 17)
• Chicago Fed President Goolsbee speaks (Fri., Nov. 17)
• San Francisco Fed President Daly speaks
• Boston Fed President Susan Collins TV appearance

Markets Index Wrap-Up

Stock Markets

A sharp rally in stocks last week was precipitated by economic data and Federal Reserve announcements that triggered a decline in interest rates. The Dow Jones Industrial Average (DJIA) rose by 5.07% and its Total Stock Market Index by 6.05%. The S&P 500 Index surged by 5.85%, its strongest weekly gain in almost a year. The Nasdaq Stock Market Composite jumped by 6.61% as growth and technology stocks outperformed the market somewhat, although the gains were broad-based. Gains were led by the small-cap Russell 2000 Index, which registered its best weekly gain since October 2022. The NYSE Composite climbed by 5.45%. Investors’ risk perception dipped as indicated by the CBOE Volatility Index (VIX) which pulled back by 29.9%.

Signs of a slowing economy and a statement by the Fed after its policy meeting on Wednesday that was perceived as dovish sent long-term bond yields into a sharp dive. After seven weeks of consecutive hikes in mortgage rates, the 30-year fixed-rate mortgage fell to an average of 7.76% in the week that ended on November 2, down from 7.79^% in the previous week. One year ago, this rate was 6.95%. This development came one day after the Fed said that it would leave its benchmark lending rate at status quo, its highest level in 22 years, as expected. While the Fed rates remained the same, it struck a more balanced tone regarding its upcoming rate decisions outlook that lends credence to the speculation that the policy-making body has completed its rate-hiking cycle.

U.S. Economy

The switch to a dovish outlook by the Fed suggested that the recent rise in long-term Treasury yields had achieved at least some of their intended tightening in financial conditions. The recent upside surprises in economic data also appeared to have satisfied the Fed which tweaked its description of the pace of economic growth from “solid” to “strong.” The closely watched payrolls report released on Friday appears to confirm that the labor market was cooling, which the market hopes to be soon followed by wage pressures. Some 150,000 jobs were added by employers in October, a number which was below expectations and the lowest level since June. September’s strong gain was also revised lower, and the unemployment rate rose to its highest level since January 2022 at 3.9%. \

Average hourly earnings ascended by 0.2%, which was short of expectations, but September’s gain in this regard was adjusted upwards to 0.3%. The 12-month gain fell to its lowest level in over two years at 4.1%, but it remained above the approximately 3% level that policymakers considered compatible with their overall inflation target of 2%. On Monday, the Labor Department released its quarterly employment cost Index which surprised modestly on the upside, reporting an annual increase of 4.3% in wages and benefits. In positive news for both investors and workers, the preliminary estimates of productivity growth in the third quarter were better than expected, indicating a decline in unit labor costs. Productivity gained by 4.7%, its best showing since businesses began to reopen in the third quarter of 2020 during the early stages of the pandemic.

Metals and Mining

While hostilities in the Middle East appear to be generally confined to the Gaza Strip as Israel wages its offensive against Hamas, the static geopolitical environment seems to take its toll on gold the prices of which are stuck at $2,000 per ounce. October’s monthly close was a record high for gold prices, although some investors appear to be somewhat frustrated that this precious metal does not have the momentum to remain at this level. The market remains at around 4% short of its 2020 all-time highs. $2,000 continues to remain a major long-term resistance level for gold, therefore, it is expected that prices may have to consolidate a bit longer at this level, or possibly fall back slightly to gain strength to push upwards to challenge the $2,100 per ounce level.

The spot prices of precious metals continue to move sideways for the week. Gold came from $2,006.37 last week to close this week at $1,992.65 per troy ounce, for a correction of 0.68%. Silver, which ended the week before at $23.12, concluded this week at $23.21 per troy ounce for an increment of 0.39%. Platinum closed the week before at $907.55 and this week at $934.75 per troy ounce for a gain of 3.00%. Palladium came from last week’s close at $1,124.56 to end this week at $1,121.78 per troy ounce for a modest slide of 0.25%. The three-month LME prices of base metals were likewise mixed. Copper ended this week at $8,143.00 per metric ton, higher by 0.54% from last week’s price of $8,099.00. Zinc closed this week at $2,478.00 per metric ton, slightly up by 0.26% from last week’s close at $2,471.50. Aluminum ended this week at $2,478.00 per metric ton, higher by 0.26% from last week’s closing price of $2,220.00. Tin ended the week at $23,962.00 per metric ton, lower by 3.77% from last week’s closing price of $24,902.00.              

Energy and Oil

This week, oil prices climbed, taking their cue from interest rates remaining unchanged after the Fed meeting on Wednesday this week. Oil prices fell for three straight days, after which it received some much-needed boost from federal banks due to their inaction regarding interest rates. Both the Federal Reserve and the Bank of England did not hike interest rates this week, causing Brent to jump back to $87 per barrel as investors were encouraged by the possibility that monetary tightening has reached its peak. In the meantime, U.S. oil production also hit an all-time high as crude and condensate production in the country climbed to a record 13.1 million barrels per day (b/d) in August. This volume surpassed the previous 13.0 million b/d record dating way back in November 2019, with EIA reporting a year-on-year surge in production by 955,000 b/d from the lower 48 states.

Natural Gas

For the report week beginning Wednesday, October 26, and ending Wednesday, November 1, 2023, the Henry Hub spot price rose by $0.33 from $2.86 per million British thermal units (MMBtu) to $3.19/MMBtu. Regarding Henry Hub futures prices, the November 2023 NYMEX contract expired Friday at $3.164/MMBtu, higher by $0.15 from the start of the report week. The December 2023 NYMEX contract price increased to $3.494/MMBtu, up by $0.12 from the beginning to the end of the report week. The price of the 12-month strip averaging December 2023 to November 2024 futures contracts climbed by $0.12 to $3.505/MMBtu.\

The international natural gas futures prices decreased this report week. The weekly average front-month futures prices for liquefied natural gas (LNG) cargoes in East Asia decreased by $0.39 to a weekly average of $17.82/MMBtu. Natural gas futures for delivery at the Title Transfer Facility (TTF) in the Netherlands, the most liquid natural gas market in Europe, decreased by $0.29 to a weekly average of $15.36/MMBtu. In the week last year corresponding to this report week (the week from October 26 to November 2, 2022), the prices were $28.97/MMBtu and $33.96/MMBtu in East Asia and at the TTF, respectively.

World Markets

European stocks were up this week on expectations that interest rates may have reached their peak and would start to descend. The pan-European STOXX Europe 600 Index rebounded from the losses of the previous week and closed 3.14% higher for this week. Major stock indexes in the region also rallied. Germany’s DAX rose by 3.42%, France’s CAC 40 Index surged by 3.71%, and Italy’s FTSE MIB jumped by 5.08%. The UK’s FTSE 100 Index climbed by 1.73%. As expectations rose that major central banks have completed their monetary policy tightening cycles, European bond yields broadly declined. The yield on the 10-year German sovereign bond slumped to its lowest levels in more than two months. The yield on the UK 10-year government bond also declined, as did the Swiss and French bond yields. The Bank of England (BoE) maintained interest rates at 5.25%, a 15-year high, for the second consecutive meeting. Despite the absence of an increase, the bank warned that rates would have to stay at a restrictive level for
“an extended period of time.”

Japan’s equities market registered gains for the week. The Nikkei 225 Index as well as the broader TOPIX Index both returned 3%. The Bank of Japan (BoJ) tweaked its yield curve control framework to allow yields to rise more freely which has raised inflation forecasts. Nevertheless, monetary policy remained highly accommodative consistent with the BoJ’s stance so far. The dovish stance weighed on the yen, though, which weakened briefly past the JPY 151 to the U.S. dollar level. The Japanese currency continues to remain under pressure due to the interest rate differential between the U.S. and Japan resulting from their divergent policies. In the Outlook for Economic Activity and Prices, BoJ policymakers have increased their consumer price index (CPI) forecast substantially for the next two years, both to 2.8% year-on-year and higher than BoJ’s 2% target. The outlook for price growth depends on assumptions regarding crude oil prices and the government’s economic measures. The bank asserts that underlying CPI inflation is likely to increase gradually toward achieving the price stability target.  

Chinese stocks rose on speculation that U.S. interest rates may have reached their peak, thus offsetting the broader concerns about China’s slowing growth. The Shanghai Composite Index inched higher by 0.43% while the blue-chip CSI 300 climbed higher by 0.61%. The Hong Kong benchmark Hang Seng Index advanced by 1.53%. China’s factory activity contracted once more in October. The official manufacturing Purchasing Manager’s Index (PMI) plunged to 49.5 in October which is below 50 which is the border between contraction and expansion. The same indicator registered 50.2 in September, resulting in a descent that signaled a slowing in production growth. The nonmanufacturing PMI descended to a slower-than-expected 50.6 from 51.7 in September, although it remained in expansion territory. The private Caixin/S&P Global survey of manufacturing activity declined to a lower-than-forecasted 49.5 in October from 50.6 in September. The private survey of services activity moved up slightly but lagged the consensus estimate. Further evidence of China’s property dilemma dogged investor concerns regarding this key economic growth driver. New home sales by the country’s top 100 developers fell from September to August, and real estate loans declined in September from the previous year.

The Week Ahead

Among the important economic data scheduled for release in the coming week are consumer credit data for September, wholesale inventories for September, and the Michigan Consumer Sentiment index.

Key Topics to Watch

• Fed Gov. Cook speaks
• Federal Reserve senior loan survey for October
• U.S. trade deficit for September
• Fed Vice Chair for Supervision Barr speaks (Nov. 7)
• Fed Gov. Waller speaks
• Consumer credit for September
• Fed Gov. Cook speaks
• Fed Chair Jerome Powell delivers opening remarks
• Wholesale inventories for September
• Fed Vice Chair for Supervision Barr speaks (Nov. 8)
• Fed Vice Chair Jefferson speaks
• Initial jobless claims (Nov. 4)
• Fed Chair Jerome Powell on panel at IMF

Markets Index Wrap-Up

Stock Markets

Stocks continued their slide this week to enter into correction territory, 10% down from their highest in late July. The Dow Jones Industrial Average (DJIA) lost 2.14% for the week while its Total Stock Market Index was not far behind with a loss of 2.60%. The broad-based S&P 500 Index is likewise down by 2.53% and the technology-heavy Nasdaq Stock Market plunged by 2.62%. The NYSE Composite fell by 2.38% while the Russell indexes all plummeted by approximately 2.60% for the week. The sell-down appears attributed to the renewed rise in long-term government bond yields as well as mixed earnings reports by large-cap technology counters.

Despite the pullback, the CBOE Volatility (VIX) risk perception indicator came down by 2.03%, signifying how investors retain confidence that the market is not once more turning bearish. The underlying optimism is driven by sentiment that inflationary headwinds are weakening and it is unlikely that the Federal Reserve will declare any further rate hikes. In the meantime, while the tech giants (Amazon, Apple, Alphabet, Meta, Microsoft, NVIDIA, Tesla) had been the major drivers since last year’s bear market low, their disappointing earnings reports have been the cause of market softness since mid-October. At present, however, the current slump appears to be merely a correction since the U-shaped recovery scenario remains in play. If the price action remains intact, the rounded bottom promises a more stable recovery than if a V-shaped reversal had taken place. Seasonal factors may improve the outlook for the coming two months.

U.S. Economy

Economic news released this week was spearheaded by a better-expected gross domestic product (GDP) report. The U.S. economy expanded in the third quarter by an annualized rate of 4.9% on the back of strong consumer spending. This was the fastest growth recorded since the end of 2021 and exceeded the level seen in the second quarter by more than twice. Home sales reached their highest level in 19 months and S&P Global’s flash U.S. Composite Purchasing Managers’ Index (PMI) inched upward from September, presenting an overall benign economic picture. The Fed’s preferred inflation gauge, the core personal consumption expenditure (PCE), showed a mixed indication as to whether inflation is moderating. Core PCE (excluding the volatile components, food and energy costs) increased to 0.3% in September on a monthly basis, from 0.1% in August. The year-over-year growth of core PCE, however, inched down to 3.7% in September from 3.8% in August. The latest data still showed that inflation remains well north of the Federal Reserve’s long-term target of 2%, but the central bank is nevertheless still expected to hold interest rates steady at its policy meeting scheduled for October 31-November 1.

In the meanwhile, the heightened geopolitical uncertainty briefly elevated WTI oil above $90 per barrel due to worries about possible disruption in the oil supply. However, prices have subsided slightly below that of last year, suggesting that energy will exert a neutral to slightly negative influence on the inflation reading for October.

Metals and Mining

Gold prices were once more propelled up to $2,000 per ounce as investors chased safe-haven assets in reaction to the chaos in the Middle East. The Israel-Hamas conflict that broke at the start of October seems headed for escalation, thus providing gold solid momentum. There is more, however, behind the flight to precious metals than just risk aversion to geopolitical uncertainties. While economic growth reported this week was better than expected, there remains a great deal of economic uncertainty, in the face of the core PCE index rising by 3.7% in the last 12 months. While inflation has indeed fallen to its lowest level since August 2021, it is still almost twice the Fed’s 2% target. Another yellow flag is the updated University of Michigan consumer survey released last Friday which showed a sharp rise in inflation expectations. Survey respondents see consumer prices rising by 4.2% 12 months hence, up from an initial estimate of 3.8%. In this environment, gold prices should be treading about $1,900, and yet it saw its highest weekly close on record at higher than $2,000 per ounce, demonstrating a nascent demand for the precious metal.

The spot prices of precious metals were generally up this week. Gold, coming from $1,981.40 last week, ended at $2,006.37 per troy ounce this week for an increase of 1.26%. Silver, previously at $23.37, ended this week at $23.12 per troy ounce, a loss of 1.07%. Platinum ended this week at $907.55 per troy ounce, an increase of 0.88% from the previous week’s close at $899.61. Palladium closed this week at $1,124.56, with a 2.11% gain over the previous week’s close at $1,101.28. The three-month LME prices of industrial metals also mostly went up. Copper, which closed a week ago at $7,948.50, ended this week at $8,099.00 per metric ton for a gain of $1.89%. Zinc, coming from $2,438.00 the previous week, closed this week at $2,471.50 per metric ton, rising by 1.37%. Aluminum ended this week at $2,220.00 per metric ton, gaining by 1.76% from the prior week’s close at $2,181.50. Tin closed this week at $24,902.00 per metric ton, for a slight loss of 0.33% from the previous week’s closing price of $24,985.00.      

Energy and Oil

Oil prices this week moved within a narrow range. ICE Brent was bound between $88 and $90 per barrel, moving in a seesaw pattern in day-to-day trading due to the ebb and flow of geopolitical concerns. The military airstrikes conducted by the U.S. on Syrian territory close to the week’s end pushed Brent above $90 per barrel on Friday’s trading before slightly receding. As Israel begins raids into Northern Gaza, market participants are anticipating a possible Iranian retaliation and possible escalation across the broader region. Despite the volatile situation, however, oil prices as expected to record their first week-on-week decline since early October.

Natural Gas

For the report week beginning Wednesday, October 18, to Wednesday, October 25, 2023, the Henry Hub spot price fell by $0.04 from $2.90 per million British thermal units (MMBtu) to $2.86/MMBtu. Regarding the Henry Hub futures, the price of the November 2023 NYMEX contract decreased by $0.046, from $3.056/MMBtu at the start of the report week to $3.010/MMBtu by the week’s end. The price of the 12-month strip averaging November 2023 through October 2024 futures contracts declined by $0.06 to $3.315/MMBtu. Across the United States, the natural gas spot prices declined modestly this report week, except for the West Coast where prices changed substantially.

The international natural gas futures price changes were mixed this report week. The weekly average front-month futures prices for liquefied natural gas (LNG) cargoes in East Asia increased by $1.71 to a weekly average of $18.21/MMBtu. Natural gas futures for delivery at the Title Transfer Facility (TTF) in the Netherlands, the most liquid natural gas market in Europe, decreased by $0.12 to a weekly average of $15.65/MMBtu. By comparison, during the week last year corresponding to this week (the week from October 19 to October 26, 2022), the prices were $31.52/MMBtu in East Asia and $31.61/MMBtu at the TTF.    

World Markets

Amid uncertainty about the economy, inflation, rising interest rates, and the possible escalation of conflicts in the Middle East, the pan-European STOXX Europe 600 Index ended the week lower by 0.96%. Major stock indexes also descended – the U.K.’s FTSE 100 Index by 1.50%. Italy’s FTSE MIB slipped by 0.25%, France’s CAC 40 Index dipped by 0.31%, and Germany’s DAX eased by 0.75%. After the European Central Bank (ECB) kept short-term interest rates on hold, Eurozone government bond yields also moderated slightly, giving rise to speculations that rates in the eurozone have at last reached their peak. The 10-year Italian government bond fell to around 4.81% while the 10-year German bund slipped to around 2.84%. The ECB finally left its key deposit rate unchanged at 4.0% after increasing interest rates 10 consecutive times. The ECB reiterated that by maintaining this level for a long enough period, inflation would be brought down to its medium-term target of 2%. Previous tightening of monetary policy is already spreading into financial conditions and dampening demand, according to the Governing Council. The Eurozone is perceived to remain weak for the remainder of this year.

Japan’s stock markets calmed during the past week as the Nikkei 225 Index eased by 0.86% while the broader TOPIX Index moved sideways. Market sentiment was weighed down at the beginning of the week by rising bond yields and growing political tensions. However, it lifted slightly as a result of investor bottom-fishing at the lows, technology stocks rebounding, and a fresh injection of Chinese economic stimulus, allowing the local bourses to recoup their losses. A pickup in inflation and moves in the foreign exchange and bond markets somewhat drove speculation of potential intervention by the government and a likely adjustment to the yield curve control policy by the Bank of Japan (BoJ) in its upcoming meeting. The 10-year Japanese government bond’s yield rate climbed to a 10-year high of 0.87%, approaching the BoJ’s upper bound of 1.0% at the start of the week. The yen weakened past the closely monitored JPY 150 to the U.S. dollar but Finance Minister Shunichi Suzuki declined to comment as to whether the BoJ intervened.

In China, equities ascended in response to the improvement in industrial profits which suggests that the economy may be stabilizing. The blue-chip CSI 300 gained 1.48% while the Shanghai Composite Index climbed by 1.16%. The Hong Kong benchmark Hang Seng Index advanced by 1.32% during the holiday-shortened week as Hong Kong stock markets were closed on Monday for the Chung Yeung Festival. In September, profits at industrial firms in China increased by 11.9% year-on-year, marking the second consecutive monthly increase. However, it slowed from the 17.2% rise in August. Profits fell by 9% from a year ago for the first nine months of 2023, following a contraction of 11.7% recorded in the first eight months of this year. Demand improved during September, leading credence to the possibility that segments of China’s economy may have bottomed.

The Week Ahead

For the coming week, important economic data scheduled for release includes the FOMC meeting, labor market data, and the home price index.

Key Topics to Watch

• Employment cost index for Q3
• S&P Case-Shiller home price index (20 cities) of August
• Chicago Business Barometer for October
• Consumer confidence for October
• ADP employment for October
• S&P U.S. manufacturing PMI for October
• Job Openings for September
• ISM manufacturing for October
• Construction spending for September
• Federal Reserve decision on interest rates
• Fed Chairman Powell press conference
• Initial jobless claims for October 28, 2023
• U.S. productivity for Q3
• U.S. unit-labor costs for Q3
• Factory orders for September
• U.S. nonfarm payrolls for October
• U.S. unemployment rate for October
• U.S. hourly wages for October
• Hourly wages year-over-year
• S&P U.S. services PMI for October
• ISM services for October

Markets Index Wrap-Up

Stock Markets

Equities lost some ground this week due to the continued rise of Treasury bond yields. The 10-year Treasury yield in particular is attracting investors’ attention as it approaches 5%, a rate last seen in 2007. All major indexes are down for the week. The Dow Jones Industrial Average (DJIA) corrected by 1.61% and the D.J. Total Stock Market Index fell by 2.41%. The broad-based S&P 500 Index similarly plunged by 2.39% while the technology tracker Nasdaq Stock Market Composite fell even deeper by 3.16%. The NYSE Composite Index dropped by 1.90%. The risk perception indicator CBOE Volatility (VIX) Index shot up by 12.37%, according to data from the Wall Street Journal Markets tracker.

Simultaneous with the rise in long-term bond yields, a host of macro and geopolitical concerns have pushed stock markets down and the Nasdaq almost into bear market territory, ending the week 19.91% below its intraday highs in early 2022. Investor sentiment weighed down on the S&P 500 Index which saw its biggest weekly decline in a month. The stock market began its week on a strong note, however, as it recorded the S&P 500 Index’s 15^th straight Monday gain. The opening rally was helped by limited negative news coming from the Middle East turmoil over the weekend. The early gains were supplanted by deepening tensions as the week progressed. Share prices sharply fell on Thursday afternoon after news reports that a U.S. Navy destroyer shot down a cruise missile heading towards Israel and that a drone attack took place on a U.S. base in Iraq.

U.S. Economy

Officials of the Federal Reserve this week were markedly less dovish in their pronouncements about the direction inflation is expected to take. Richmond Fed Reserve President Thomas Barkin commented before real estate conference attendees in Washington that he still needs to see further confirmation of slowing demand and cooling inflation. While Fed Chair Jerome Powell admitted before the Economic Club of New York on Thursday that there appeared to be encouraging signs of a clear tightening in financial conditions, the Wall Street Journal nevertheless reported a sharp pullback in the markets after Powell admitted that there were no signs that the current stance of the Fed would result in a possible push into an economic recession.

Some economic data suggest that interest rates will remain higher for longer. The Commerce Department reported on Tuesday that retail sales rose 0.7% in October, amounting to almost double the consensus expectations. Online retailers, restaurants and bars accounted for most of the increase, suggesting that discretionary spending continued to remain strong. Sales rose 3.8% over the preceding 12 months which is roughly in line with consumer inflation. In any case, weekly jobless claims fell below 200,000 for the first time since January, thus surprising on the downside. Commerce data also indicated that the industrial side of the economy remained significantly weaker. Although overall industrial production remained roughly flat over the preceding year (up 0.8%), it rose by 0.3% in September. The impact of rising rates was further evident in the tight labor supply and the housing sector. September housing starts rose more than expected while building permits, a more forward-looking indicator, fell by 4.4%, its sharpest decline in 10 months.   

Metals and Mining

Gold’s move in the last two weeks is pleasantly surprising to those who decided to accumulate during the low phase. The yellow metal fell to a seven-month low on October 6, testing the $1.820 per ounce support briefly, and has bounced back with a fury without once looking back since. It rallied more than 9% in the last two weeks as prices pushed above $2,000 per ounce before the weekend. Silver is likewise remarkable, briefly dropping below $21 per ounce two weeks ago and now ending the week slightly short of $23.50, resulting in a 13% rally. Throughout the summer, bearish sentiment dogged the gold market as investors continued to react to the aggressive monetary policy stance of the Fed which will continue to restrict interest rates through the first semester of 2024. What ignited the new rally, however, appears to be the news of Hamas’s surprise attack that killed more than 1,000 Israelis. Gold is thus performing its role as a safe-haven asset during chaotic times

Precious metal spot prices were generally higher this week. Gold rose by 2.51% from its week-ago close of $1,932.82 to its closing price this week of $1,981.40 per troy ounce. Silver, which came from $22.72 the previous week, ended at $23.37 per troy ounce this week for a gain of 2.86%. Platinum closed this week at $899.61 per troy ounce for an increase of $1.75% over its previous week’s close of $884.13. Palladium ended lower by 4.28% this week to close at $1,150.56 per troy ounce from its previous week’s price of $1,101.28. The three-month LME prices of industrial metals generally closed lower for the week. Copper lost 0.01% from its previous week’s close at $7,949.00 to this week’s close at $7,948.50 per metric ton. Zinc closed lower by 0.33% from its previous week’s closing price of $2,446.00 to this week’s closing price of $2,438.00 per metric ton. Aluminum ended the week lower by 0.82% from last week’s close at $2,199.50 to this week’s close at $2,181.50 per metric ton. Tin lost 0.41% from last week’s close at $25,087.00 to this week’s close at $24,985.00 per metric ton.

Energy and Oil

The U.S. government was one of the key players who influenced oil prices this week. It announced the easing of Venezuelan sanctions as well as a possible replenishment of the U.S. Special Petroleum Reserve (SPR). The announcement of the easing of sanctions against Venezuela first sent oil prices downward, but the potential replenishment of the US SPR drove prices sharply upward. The U.S. Department of Energy announced that it would seek to purchase 6 million barrels of crude oil for delivery to the SPR in December to January and that it seeks to sign purchase contracts at $79 per barrel or less. Coupled with these announcements is the escalation of the Israel-Gaza crisis that further stoked fears that it may spread into a wider regional war. The geopolitical risk premium added further upside to prices. On Friday morning, WTI traded above the $90 per barrel level while ICE Brent neared the $94 per barrel mark.

Natural Gas

For the report week beginning Wednesday, October 11, and ending Wednesday, October 18, 2023, the Henry Hub spot price fell by $0.28 from $3.18 per million British thermal units (MMBtu) to $2.90/MMBtu. Making the Henry Hub price among the highest of all major U.S. hubs outside of California. The price of the November 2023 NYMEX contract decreased by $0.321, from $3.337/MMBtu at the start of the report week to $3.056 at the week’s end. The price of the 12-month strip averaging November 2023 through October 2024 futures contracts retreated by $0.154 to $3.375/MMBtu.

International natural gas futures prices advanced this report week. The weekly average front-month futures prices for liquefied natural gas (LNG) cargoes in East Asia increased by $2.32 to a weekly average of $16.50/MMBtu. Natural gas futures for delivery at the Title Transfer Facility (TTF) in the Netherlands, the most liquid natural gas market in Europe, increased by $2.49 to a weekly average of $15.78/MMBtu. In the week last year corresponding to this week (from October 12 to October 19, 2022), the prices were $32.11/MMBtu in East Asia and $37.30/MMBtu at the TTF.

World Markets

The European stock markets retracted amid uncertainty concerning the interest rate outlook and fears of a possible escalation of the Middle East conflict. The pan-European STOXX Europe 600 Index ended 3.44% lower for the week. A series of disappointing earnings reports exacerbated the worsening investor mood as all major Continental stock indexes also closed significantly downward. Germany’s DAX fell by 2.56%, France’s CAC 40 Index plunged by 2.67%, and Italy’s FTSE MIB plummeted by 3.12%. The UK’s FTSE 100 Index dropped by 2.60%. As investors weighed the prospects that interest rates would remain higher due to sticky inflation, European bond yields broadly climbed. The yield on the benchmark government bonds in the U.K. rose after inflation data was reported as unchanged instead of slowing further. Germany’s benchmark 10-year government bond yield rose and closed the week just short of 2.9%. Italian bond yields advanced, with the yield differential between German and Italian 10-year debt increasing to more than 200 basis points.

Japanese bourses fell over the week as the Nikkei 225 Index dropped by 3.3% and the broader TOPIX Index declined by 2.3%. The disappointing market performance occurred despite a slight easing of inflationary pressure in Japan, however, wage growth drew attention amid signs of a move higher in pay demands for next year. The news that the interest rates in the U.S. may remain higher for longer prompted a surge in bond yields. The yield on the 10-year Japanese government bond rose to its highest level in around 10 years at 0.83%, from 0.76% at the end of the previous week. The Bank of Japan (BoJ) announced an unscheduled bond-purchase operation during the week in an attempt to intervene to slow the pace of increases, The yen traded within the upper end of the JPY 149 against the U.S. dollar range, approaching the JPY 150 threshold that many speculate could prompt the Japanese authorities to intervene to arrest the currency’s slide. If the government fails to take action, such an excessive swing may cause harm to the real economy, causing regular people and businesses to suffer.

China’s stock prices also fell sharply mainly due to deepening property sector concerns that offset optimism of a better-than-expected gross domestic product report. The Shanghai Composite Index lost 3.4% of its value while the blue-chip CSI 300 plunged by 4.17%, obliterating the gains made from the reopening rally earlier this year. The Hong Kong benchmark Hang Seng Index declined by 3.6%. Despite receiving a 30-day grace period in August, China’s largest property developer, Country Garden, announced this week that it was unable to meet all of its offshore debt payments. The company’s missed dollar bond interest payment signifies that it will almost certainly default on a dollar bond for the first time, underscoring the troubles faced by China’s real estate market. Home price data, in the meantime, indicates no improvement in the ongoing property market slump. In 70 of China’s largest cities, new home prices fell by 0.3% in September from August. This is the third consecutive month of home price declines. Also announced during the week is a surprisingly strong GDP performance, with China’s economy expanding by an above-forecast 4.9% in the third quarter year-over-year, slowing from a 6.3% rise recorded in the second quarter.    

The Week Ahead

Important economic data scheduled to be released this week include PCE inflation data and third-quarter GDP.

Key Topics to Watch

• S&P Case-Shiller home price index (20 cities) for August
• S&P flash U.S. services PMI for October
• S&P flash U.S. manufacturing PMI for October
• New home sales for September
• Gross Domestic Product for Q3
• Initial jobless claims for Oct. 21
• Durable goods orders for September
• Durable goods minus transportation for September
• Advanced U.S. trade balance in goods for September
• Advanced retail inventories in September
• Advanced wholesale inventories in September
• Pending home sales
• Personal income (nominal) for September
• Personal spending (nominal) in September
• PCE index for September
• Core PCE index for September
• PCE (year-over-year)
• Core PCE (year-over-year)
• Consumer sentiment (final)

Markets Index Wrap-Up

Stock Markets

The major stock markets closed this week with mixed results, with investors tentatively assessing inflation data and dovish signals from Federal Reserve officials. According to the Wall Street Journal Markets report, markets ending with gains for the week were the Dow Jones Industrial Average (+0.79%), the DJ Total Stock Market Index (+0.24%), the S&P 500 Index (+0.45%) and the NYSE Composite Index (+0.72%). Ending lower for the week is the technology-heavy Nasdaq Stock Market Composite Index (-0.18%). The CBOE Volatility Index (VIX), which indicates investors’ risk perception, went up by 10.72% for the week. Large-cap value stocks performed well due to positive earnings news from Citigroup, Wells Fargo, and JP Morgan Chase. The banking giants realized healthy profits due to higher interest rates and their releases this week kicked off the start of the third-quarter earnings report season.

Energy shares and defense stocks received a boost from news about the likelihood of a broader Middle East war due to Hamas’ attack on Israel. Prospects of its escalation, however, weighed down airlines and cruise operators. News of Nordisk’s new dialysis drug, widely used to treat obesity, also demonstrated success in treating kidney disease caused Dialysis provider Da Vita to fall sharply. In a broader sense, however, the market seemed to gain optimism from an apparent shift in the official thinking of the Feds regarding inflation and the likelihood of a recession. The minutes of the Fed’s September meeting released midweek suggested that while rates will remain restrictive for some time, the communication has evolved from “how high to raise rates” to “how long to hold rates.” During the week’s end, federal fund futures were pricing in only a 5.7% probability of a rate hike when the Fed meets next in November, as against 27.1% likelihood during the week before.

U.S. Economy

The recent reading on the inflation rate has come below the Fed’s policy rate and will likely continue to moderate, providing further hope that the rates have peaked. Even the slightly higher-than-expected inflation reading did not cause investors to panic, given the volatility of the global geopolitical developments this week. The Labor Department reported on Wednesday that core (excluding food and energy) producer prices increased by 0.3% in September which is a tick above expectations. However, the 2.7% increase in year-over-year core producer prices surprised analysts as it was the highest level since May. This resulted from a significant upward revision in the previous month. The core consumer price index (CPI) inflation data that was released on Thursday, which rose by 4.1% for the year ended September 30, was in line with expectations and its slowest pace in two years.

Metals and Mining

This week, gold prices registered their strongest performance since early spring as it was driven by short covering and a strong safe-haven bid at the start and the end of the week. during a survey conducted this week, market analysts and retail investors have expressed an almost identical bullish consensus about gold’s prospects for the coming week, ending October 20. The massive price surge in the morning of Friday is evidence of when the market opens with full participation, possibly taking a long position in the yellow metal. In the coming week, there may be some slight pullback as some players take profits, but this precious metal will likely move back and forth as it consolidates before another possible breakout.

The spot prices for precious metals rose mostly for this week. Gold surged by 5.45% from its previous week’s close at $1,833.01 to this week’s close at $1,932.82 per troy ounce. Silver also climbed by 5.19% from its close last week at $21.60 to its close this week at $22.72 per troy ounce. Platinum gained by 0.29% from its closing price last week at $881.56 to this week’s closing price of $884.13 per troy ounce. Palladium bucked the trend, losing by 1.05% from its price last week of $1,162.78 to its price this week of $1,150.56 per troy ounce. The three-month LME prices of base metals were mostly down this week. Copper ended 1.21% lower from last week’s close at $8,046.00 to this week’s close at $7,949.00 per metric ton. Zinc lost 2.51% of its previous week’s price of $2,509.00 to this week’s closing price of $2,446.00 per metric ton. Aluminum gave up 1.79% of last week’s price of $2,239.50 to end this week with the price of $2,199.50 per metric ton. Tin defied the odds and gained 1.80% from last week’s closing price of $24,644.00 to end this week at the price of $25,087.00 per metric ton.

Energy and Oil

Sanctions imposed by the Biden administration this week had the unintentional effect of supporting oil prices. The U.S. government has slapped sanctions on two tanker owners (one based in Turkey and the other in the UAE) that allegedly transported Russian oil above the G7 price cap of $800 per barrel. ICE As the U.S. seeks to close loopholes in its sanctions mechanisms, Brent was set to finish the week at the unlikely price of $88 per barrel given the large U.S. inventory builds reported in the middle of the week. On the other hand, a promised increase in Russia’s oil price cap enforcement kicked off with two sanctioned tankers, and the rising market expectation that more sanctions will emerge on Iran in light of the Israel-Palestinian conflict have raised geopolitical risks and increased the possibility that the $90-per-barrel is once more within reach.

Natural Gas

For the report week beginning Wednesday, October 4, and ending Wednesday, October 11, 2023, the Henry Hub spot price rose by $0.27 from $2.91 per million British thermal units (MMBtu) to $3.18/MMBtu. The Henry Hub spot price rose above $3.00/MMBtu for the first time since January of this year. Regarding the Henry Hub futures price, the price of the November 2023 New York Mercantile Exchange (NYMEX) contract increased by $0.415, from $2.962/MMBtu at the start of the report week to $3.377/MMBtu at the end of the week. The price of the 12-month strip averaging November 2023 through October 2024 futures contracts climbed by $0,269 to $3.529/MMBtu. The NYMEX futures price at the Henry Hub has been steadily increasing since September 21 when the front-month contract settled at $2.61/MMBtu.

The international natural gas futures price changes were mixed for this report week. The weekly average front-month futures prices for liquefied natural gas (LNG) cargoes in East Asia decreased by $0.26 to a weekly average of $14.18/MMBtu. Natural gas futures for delivery at the Title Transfer Facility (TTF) in the Netherlands, the most liquid natural gas market in Europe, increased by $1.17 to a weekly average of $13.28/MMBtu. In the week last year corresponding to this report week (from October 5 to October 12, 2022), the prices were $34.81/MMBtu and $45.83/MMBtu in East Asia and at the TTF, respectively.

World Markets

Optimism from dovish comments from the Federal Reserve policymakers and reports that China was considering more economic stimulus measures drove European stocks up this week to end three consecutive weeks of losses. The pan-European STOXX Europe 600 Index closed 0.95% for the week in local currency terms. However, major stock indexes were mixed in the region. Italy’s FTSE MIB rallied by 1.53% higher. Germany’s DAX slid by 0.28%, while France’s CAC 40 Index fell by 0.80%. The UK’s FTSE 100 Index tacked on an additional 1.41%. European bond yields declined as investors flocked to safe-haven assets after the eruption of Hamas violence in the Middle East. Strong U.S. inflation data slowed the drop in yields. The benchmark 10-year German government bond yield closed near 2.75%. Furthermore, the minutes of the European Central Bank’s (ECB’s) September meeting showed that a solid majority of policymakers cast their votes in favor of raising the key deposit rate to 4.0%, a record high. The increase was intended to show the ECB’s determination to rein in inflation since headline and core inflation remained above 5%.

Japan’s stock markets rose over the week as they continued their strong year-to-date gains. The Nikkei 225 Index climbed by 4.3% while the broader TOPIX Index gained by 2.0%.  Historic weakness in the yen lent ongoing support, particularly for stocks whose companies are raking in higher dollar-denominated earnings. The yen weakened from about JPY 149.2 the week before to approximately JPY 149.6 against the U.S. dollar this week. The currency continued on its downward spiral despite attracting some support from investor demand for safe-haven currencies in light of the increased geopolitical uncertainties in the Middle East. Japanese authorities continued to emphasize that they would not hesitate to intervene if excess currency volatility develops, without ruling out any options. However, there has been no evidence of the government’s intervention in the markets to stem the yen’s drop. In other developments, the International Monetary Fund (IMF) revised its forecast for Japan’s economic growth in 2023 to 2.0% from 1.4% previously, as published this week in its October World Economic Outlook. A range of factors including pent-up demand, rebounding inbound tourism, accommodative monetary policy, and easing supply chain constraints boosting auto-expansion, are seen to support the country’s economic expansion.

In China’s first full week of trading after the Golden Week holiday, stocks declined as softer inflation and trade data renewed concerns that the economy may once more approach deflation. The Hong Kong benchmark Hang Seng climbed by 1.87%. Following August’s 0.1% rise, China’s year-on-year CPI remained unchanged in September mainly due to weaker food prices. Producer prices fell year-on-year by 2.5%, more than consensus estimates, although it eased from the 3.0% drop the previous month. Although trade and lending data remained weak, they nevertheless came in above expectations. Overseas exports fell by 6.2% in September from their year-ago figures, which was slower than the 8.8% August drop. Imports fell by 6.2% which was still better than the August contraction of 7.3%, marking the seventh consecutive monthly decline. The data shows that while some segments of China’s economy are stabilizing, it remains insufficient to dispel concerns about China’s weakening growth prospects.

The Week Ahead

This week, among the important economic data to be released are the retail sales, housing starts, industrial production, and capacity utilization reports.

Key Topics to Watch

• Empire State manufacturing survey for October
• Philadelphia Fed President Patrick Harker speaks (a.m.)
• Philadelphia Fed President Patrick Harker speaks (p.m.)
• U.S. retail sales for September
• Retail sales minus autos for September
• Industrial production for September
• Capacity utilization for September
• Fed Gov. Michelle Bowman speaks
• Business inventories for August
• Home builder confidence index for October
• Richmond Fed President Tom Barkin speaks
• Minneapolis Fed President Noel Kashkari speaks
• Housing starts for September
• Building permits for September
• Fed Gov. Chris Weller speaks
• New York Fed President John Williams speaks
• Fed Beige Book
• Fed Gov. Lisa Cook speaks
• Initial jobless claims for Oct. 14
• Philadelphia Fed manufacturing survey for October
• Existing home sales for September
• U.S. leading economic indicators
• Fed Chairman Jerome Powell speaks
• Chicago Fed President Austan Goolsbee speaks
• Fed Vice-Chair for Banking Michael Barr speaks
• Atlanta Fed President Raphael Bostic speaks
• Dallas Fed President Lorie Logan speaks
• Cleveland Fed President Loretta Mester speaks

Markets Index Wrap-Up