Stock Markets

All major indexes moved sharply lower when it was determined that only two rate cuts would be taking place in 2025 instead of the expected four rate cuts. The 30-stock Dow Jones Industrial Average (DJIA) fell by 2.25% for the week while the Total Stock Market Index was not far behind, having lost 2.26%. The broad S&P 500 Index finished the week 1.99% lower and the technology-heavy Nasdaq Stock Market Composite ended 1.78% lower than its close last week. The NYSE Composite dropped by 3.09% for the week. The CBOE Volatility Index (VIX), a measure of investor risk perception, shot up by 32.95%.

U.S. stocks plummeted during the week but a rally on Friday helped major indexes recover some of their lost ground. While smaller-cap indexes generally fared worse, losses were broad-based. Traders observed that Thursday marked the 14^th consecutive trading session wherein decliners outnumbered gainers in the S&P 500 Index, the longest record since 1978. The dominant event during the week seems to be the Fed’s rate announcement after its highly-awaited policy meeting on Wednesday. The policymakers announced a quarter basis point cut to the Fed’s policy rate as expected, bringing the total rate reduction to 100 basis points (1.00 percentage point) since the start of the rate-cutting cycle in September. Investor sentiment turned sour when Fed Chair Jerome Powell noted that core inflation in 2025 rose to 2.5% from 2.2% in September, prompting greater caution before adopting future rate cuts.  

U.S. Economy

The U.S. economy grew at an annualized rate of 3.1% in the third quarter, the Commerce Department reported on Thursday. The reading outpaces a previous estimate of 2.8%, partly due to increases in consumer spending. Also possibly related is the increase in retail sales in November by 0.7%, up from 0.5% in October. Also ringing a positive tone is the jobs data for the week. Initial jobless claims of 220,000 were reported by the Labor Department, as well as continuing claims of 1.87 million. Both indicators were down from the week before. Finally, on Friday morning the personal consumption expenditure (PCE) inflation report was released. The core PCE index, which is the Fed’s preferred inflation metric, rose by 2.8% year-over-year in November. This is in line with October’s reading and slightly lower than consensus expectations. The better-than-expected report appeared to have helped push stocks higher on Friday to end the week above their lowest levels.   

Metals and Mining

The spot price of precious metals generally fell for this week. Gold closed at $2,622.91 per troy ounce, 0.96% lower than last week’s closing price of $2,648.23. Silver settled this week at $29.52 per troy ounce for a loss of 3.37% from its final price last week of $30.55. Platinum bucked the trend and closed this week at $927.80 per troy ounce, 0.10% higher than last week’s closing price of $926.91. Palladium ended this week at $919.54 per troy ounce for a loss of 3.86% from last week’s close of $956.42. The three-month LME prices of industrial metals also lost ground over the week. Copper settled this week at $8,883.00 per metric ton, 1.87% lower than last week’s closing price of $9,052.50. Aluminum ended this week at $2,507.00 per metric ton which is lower by 3.76% from last week’s close at $2,605.00. Zinc, which ended last week at $3,095.50 and this week at $2,967.00 per metric ton for a loss of 4.15%. Tin closed one week ago at $29,097.00 and this week at $28,399.00 per metric ton for a drop of 2.40%.

Energy and Oil

The 2025 rate policy outlook of the Federal Reserve produced two key takeaways. The foreseen policy will be slower and shallower, with a suggested prolonged break in rate-cutting next year. This adds insult to the injury suffered by the oil market. China remains bearish on its oil market for 2025, with the country’s state refining giant Sinoper expecting the country’s oil consumption to peak by 2027 at 16 million barrels per day. As both gasoline and diesel are expected to fall next year by 2.4% and 5.5% respectively, growth is seen to come only from the petrochemicals sector. Almost all 2025 outlooks are trying to outcompete one another in terms of bearishness. As a result, Brent prices dipped to $72 per barrel again.

Natural Gas

For the report week beginning Wednesday, December 11, and ending Wednesday, December 18, 2024, the Henry Hub spot price fell by $0.09 from $3.11 per million British thermal units (MMBtu) to $3.02/MMBtu. Regarding the Henry Hub futures, the price of the January 2025 NYMEX contract was generally unchanged from $3.378/MMBtu to $3.374/MMBtu for the report week. The price of the 12-month strip averaging January 2025 through December 2025 futures contracts declined by $0.05 to $3.232/MMBtu. At most locations this report week, natural gas spot prices fell. Price changes ranged from a decline of $6.99 at the Algonquin Citygate to an advance of $0.07 at the Waha Hub.

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 fell by $1.26/MMBtu to a weekly average of $13.78/MMBtu. Natural gas futures for delivery at the Title Transfer Facility (TTF) in the Netherlands declined by $1.38/MMBtu to a weekly average of $12.73/MMBtu. In the week last year corresponding to this report week (beginning December 13 and ending December 20, 2023), the prices were $13.30/MMBtu in East Asia and $10.89/MMBtu at the TTF.  

World Markets

European stocks lost ground this week on concerns regarding the uncertainty of interest rate reductions and potential U.S. trade tariffs to be imposed on the European Union. The pan-European STOXX Europe 600 Index ended 2.76% lower this week in local currency terms. The region’s major stock indexes also fell for the week. France’s CAC 40 Index lost by 1.82%, Germany’s DAX declined by 2.55%, and Italy’s FTSE MIB dropped by 3.22%. The UK’s FTSE 100 Index gave up 2.60%. The Bank of England (BoE) maintained its key interest rate at 4.75%, which was in line with expectations. Also as expected, headline annual inflation accelerated in November to 2.6% from 2.3% in October as gasoline and clothing costs went higher. Sweden’s central bank reduced its key interest rate by a quarter-point to 2.50% as expected, with the potential of one more cut in the first half of 2025 if conditions remain unchanged. Norway’s central bank left its policy rate unchanged at 4.50%, a 16-year-high, as it attempts to stabilize inflation around its target. Activity in the Eurozone’s private sector closed the year in contraction. A rebound in the services sector, however, kept the overall decline marginal, according to the S&P Global purchasing managers’ surveys. The slowdown in business activity in Germany and France, the bloc’s largest economies, eased only modestly.

Japan’s stock markets fell this week, with the Nikkei 225 Index losing by 2.0% and the broader TOPIX Index falling by 1.6%. Banks faced tougher challenges due to a slight increase in expectations that the pace of monetary policy normalization by the Bank of Japan (BoJ) could be slower than anticipated. Broadly unchanged during the week at 1.05% was the yield on the 10-year Japanese government bond. The profit outlook for Japan’s exporters, especially automakers, was supported by the sell-off in the yen, reducing the currency’s value and making Japanese exports more attractive to foreign markets. The yen softened to within the high-JPY 156 range against the US dollar, from about JPY 153.7 at the end of the previous week. The situation prompted fresh verbal intervention by Japanese authorities to prop up the yen. At its December 18-19 meeting, the BoJ maintained its policy rate steady at approximately 0.25%. BoJ Governor Kazuo Ueda’s post-meeting comments were read as dovish by investors. Market expectations are strengthening around the possibility of a rate hike in January. It is more likely that a rate hike may be delayed beyond January, according to analysts, as Ueda mentioned that wage trends will be clearer in March or April and that the economic policy of the new U.S. administrations will continue to pose a risk. In the meantime, consumer inflation rose to a three-month high, pressure remains on the BoJ to raise interest rates.  

Disappointing data raised concerns about the economy and sent Chinese stocks retreating. The Shanghai Composite Index declined by 0.7% while the blue-chip CSI 300 gave up 0.14%. The Hong Kong benchmark Hang Seng Index fell by 1.25%. Amid a looming trade war with the U.S., November activity data pointed to the uneven nature of China’s recovery. From a year ago, retail sales expanded a below-consensus 3%, down from 4.8% in October and highlighting the unwillingness of Chinese consumers to spend. In the January to November period, fixed asset investment grew by 3.3%, lagging forecasts and less than the 3.4% increase in the calendar year to October. In the same period, property investment fell by 10.4%. On the contrary, a bright spot was industrial production rising by a better-than-expected 5.4% year-on-year attributed to an increased demand for robots, passenger cars, and solar panels. For the third straight month, China’s youth unemployment rate eased after hitting its highest level this year in August. According to official data, the jobless rate for 16- to 24-year-olds (excluding students) was 16.1% in November, down from, 17.1% in October. As expected, urban unemployment remained steady at 5%. After Beijing unveiled a sweeping package in late September aimed at revising the crisis-hit sector, China’s property market has shown signs of stabilizing.

The Week Ahead

New home sales and consumer confidence reports are among the important economic releases scheduled for this coming week.

Key Topics to Watch

• Consumer confidence for Dec.
• Durable-goods orders for Nov.
• Durable-goods minus transportation for Nov.
• New home sales for Nov.      
• Initial jobless claims for Dec. 21
• Advanced U.S. trade balance in goods for Nov.
• Advanced retail inventories for Nov.
• Advanced wholesale inventories for Nov.

Markets Index Wrap-Up

Stock Markets

Last week, the Nasdaq reached a new milestone when it briefly surpassed the 20,000 level. Growth stocks underperformed against value stocks for the third consecutive week, partly due gains by Tesla (12.08%) and Google parent Alphabet (9.44%) shares. Between Tuesday and Wednesday, Alphabet recorded its largest two-day gain since 2015. Thus far, the stock market’s winning formula has been rising corporate profits, solid economic growth, and the start of easing by central banks. While the outlook remains positive, inflation is proving tenacious in the fourth quarter, raising uncertainty concerning the next moves central banks will take. 

Except for the Nasdaq, all major indexes were down for the week. The 30-stock Dow Jones Industrial Average lost 1.82% and the Total Stock Market fell by 0.90%. The broad S&P 500 Index slid by 0.64% and the NYSE Composite gave up 1.88%. The technology-heavy Nasdaq Stock Market Composite bucked the trend and rose by 0.34%. The CBOE Volatility Index (VIX), the accepted indicator of investor risk perception, climbed by 8.14% this week.

U.S. Economy

Wednesday provided the highlight of this week’s economic calendar with the Labor Department releasing the headline and core (excluding food and energy) consumer price inflation (CPI). Both indicators rose by 0.3% in November, in line with consensus expectations. Core prices increased 3.3% year-over-year in November and remained unchanged since the prior month, Overall inflation modestly grew to 2.7% up from October’s 2.6%. Almost 40% of the total price increase in November is attributable to higher shelter costs, while few of the index components decreased during the month. Producer price inflation likewise accelerated slightly in November, from 0.3% to 0.4%.

The following day, the Labor Department reported a surprise increase in weekly initial jobless claims to a two-month high of 242,000. Seasonal factors around the Thanksgiving holiday accounted for some of the increase. However, continuing claims also rose and persisted near three-year highs, indicating that some unemployed individuals are taking longer to find a job. The jobs data signaled a softening labor market following the preceding week’s report of an increase in November’s unemployment rate.

As a result of the week’s economic data, investors’ expectations for a rate cut at the upcoming Federal Reserve meeting appeared to have solidified. The CME FedWatch Tool showed that futures markets on Friday priced in a 97.1% chance of the Fed cutting rates at its upcoming meeting, higher than the 86.0% registered at the end of the preceding week. The Fed’s two-day meeting will begin on Tuesday, December 17. The new rate decision is expected to be made on the following day. 

Metals and Mining

News that the People’s Bank of China (PBOC) increased its official gold reserve by 6 tons triggered investor buying that raised gold to a five-week high. The purchase, though smaller than previous orders, demonstrates that the Chinese central bank maintains an active presence in the market. Demand from central banks has been a major factor in the recent surge of gold prices to record highs. Analysts forecast that central bank gold buying will drive the price of this metal to $3,000 per ounce in 2025. The official sector demand will be the most significant factor that will influence prices in the coming year, according to Wells Fargo’s 2025 outlook. Furthermore, geopolitical uncertainties remain high and the threat of global war continues to impact the markets, causing investors to flee to gold, which carries no third-party political risks. 

The spot prices of precious metals ended mixed for the week. Gold closed at $2,648.23 per troy ounce,       0.56% higher than last week’s closing price of $2,633.37. Silver settled at $30.55 per troy ounce, 1.36% lower than its close last week at $30.97. Platinum ended the week at $926.91 per troy ounce, 0.50% lower than last week’s closing price of $931.55. Palladium ended at $956.42 per troy ounce this week, 0.40% than last week’s close at $960.29. The three-month LME prices of industrial metals mostly fell. Copper came from $9,074.50 last week to close at $9,052.50 per metric ton this week for a loss of 0.24%. Aluminum, which ended at $2,639.00 last week, settled this week at $2,605.00 per metric ton for a decline of 1.29%. Zinc, which closed last week at $3,118.50, ended this week at $3,095.50 per metric ton, down by 0.74%. Tin, whose last weekly close was at $29,165.00, settled this week at $29,097.00 per metric ton for a decline of 0.23%.

Energy and Oil

OPEC has revised its global oil demand forecast for 2024 and 2025 for the fifth time. Next year’s growth outlook is seen at 1.45 million barrels per day with changes almost wholly driven by a downgrade of consumption growth across the Middle East. However, with the potential threat of sanctions front and center this week, it appears that gold has become immune from the pains of the OPEC+ meeting. Some geopolitical risks have been added by other concerns such as the new G7 sanctions on Russia’s shadow fleet, Chinese concerns about buying Iranian crude with Trump ascending into office, and looming nuclear sanctions in Tehran. The Brent has risen back to $74 per barrel, posting its first weekly gain since November.

Natural Gas

For the report week from Wednesday, December 4 to Wednesday, December 11, 2024, the Henry Hub spot price rofsse by $0.28 from $2.83 per million British thermal units (MMBtu) to $3.11/MMBtu. Regarding Henry Hub futures, the price of the January 2025 NYMEX contract rose by $0.34, from $3.043/MMBtu at the start of the report week to $3.378/MMBtu by the week’s end. The price of the 12-month strip averaging January 2025 through December 2025 futures contracts rose by $0.12 to $3.282/MMBtu. Natural gas spot prices rose at most major pricing locations along with the Henry Hub this report week. Price changes ranged from a decrease of $0.38 at Northwest Sumas to an increase of $1.86 at Algonquin Citygate.

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 $0.02 to a weekly average of $15.04/MMBtu.  Natural gas futures for delivery at the Title Trade Facility (TTF) in the Netherlands decreased by $0.71 to a weekly average of $14.11/MMBtu. In the week last year corresponding to this report week (from December 6 to December 13, 2023), the prices were $15.77/MMBtu in East Asia and $11.73/MMBtu at the TTF.

World Markets

European stock lost ground this week. The pan-European STOXX Europe 600 ended 0.77% lower in local currency terms as investors were uncertain whether the European Central Bank (ECB) has been easing monetary policy fast enough to support the struggling economy. The major stock indexes were mixed. France’s CAC 40 Index dipped by 0.23%, Germany’s DAX squeezed out a modest gain of 0.10%, and Italy’s FTSE MIB climbed by 0.40%. The UK’s FTSE 100 Index declined by 0.10%. The European Central Bank (ECB) lowered its key deposit rate by a quarter of a percental point to 3.0%. This is the ECB’s fourth rate reduction this year. The central bank also revised its outlooks for growth and inflation. ECB officials announced that it will keep the door open to further ease monetary policy and will maintain a meeting-by-meeting approach to policy decisions. Meanwhile, the UK economy has significantly slowed after its strong start in the year. Real gross domestic product (GDP) shrank unexpectedly by 0.1% sequentially in October due to the weakening of production output. The economy underwent a contraction of the same magnitude in September. Output in the services sector was flat in both months. The Bank of England (BoE) is widely expected to hold interest rates steady at its upcoming policy meeting, and cautiously proceed next year due to stubbornly high services inflation.

Japan’s equities registered modest gains this week. The Nikkei 225 Index rose by 0.97% and the broader TOPIX Index gained by 0.71%. China’s announcement of more proactive rascal measures and moderately looser monetary policy boosted regional market sentiment. Speculation grew on the domestic monetary front that the Bank of Japan (BoJ) may suspend an interest rate hike at its meeting scheduled for December 18-19. This led the yen to soften to about the middle of the JPY 153 range against the US dollar, from the prior week’s JPY 150 level. The yield on the 10-year Japanese government bond fell to about 1.04%, from 1.06% at the end of the previous week. On the economic front, the final GDP data showed that Japan’s economy grew by 0.3% quarter-on-quarter in the three months to September. This exceeds the 0.2% consensus expectation as indicated by preliminary data. The BoJ’s tankan survey (a gauge of sentiment among big manufacturers) showed support for the country’s economic outlook as it edged higher in the fourth quarter.  Indications are that there were more companies that said they were optimistic about business conditions than companies that said they were pessimistic.

Chinese stocks lost ground last week as investors were underwhelmed by recent policy announcements. The Shanghai Composite Index dipped by 0.36% and the blue-chip CSI 300 fell by 1.01%. The Hong Kong benchmark Hang Seng Index gained 0.53%. At the annual Central Economic Work Conference, a high-level meeting wherein top officials plan the economic agenda for the next year, China pledged to implement a more proactive fiscal policy and increase the budget deficit in 2025. Officials said that the central government will continue issuing ultra-long special Treasury bonds to fund major projects. However, the report after the two-day conference provided no details which further dampened investor sentiment. China’s economy remained stuck in deflation, according to inflation data released earlier in the week. The consumer price index rose by a lower-than-consensus 0.2% in November from a year earlier. Core inflation (excluding volatile food and energy costs) inched up to 0.3%, from 0.2% in October. The producer price index dipped by 2.5% year-on-year, easing from the previous month’s 2.9% slide and marking the 26^th straight monthly decline despite the government’s efforts to boost domestic demand in recent months.

The Week Ahead

In the coming week, the important economic reports scheduled for release include the PCE inflation data, GDP second revision for the third quarter, and the results of the FOMC meeting.

Key Topics to Watch

• Empire State manufacturing survey for Dec.
• S&P flash U.S. services PMI for Dec.          
• S&P flash U.S. manufacturing PMI for Dec.
• U.S. retail sales for Nov.       
• Retail sales minus autos for Nov.      
• Industrial production for Nov.           
• Capacity utilization for Nov. 
• Home builder confidence index for Dec.      
• Housing starts for Nov.          
• Building permits for Nov.     
• FOMC interest-rate decision             
• Fed Chair Powell press conference               
• Initial jobless claims for Dec. 14       
• GDP (second revision) for Q3           
• Philadelphia Fed manufacturing survey for Dec.      
• Existing home sales for Nov.
• U.S. leading economic indicators for Nov.   
• Personal income (nominal) for Nov. 
• Personal spending (nominal) for Nov.          
• PCE index for Nov.   
• PCE (year-over-year)            
• Core PCE index for Nov.      
• Core PCE (year-over-year)               
• Consumer sentiment (final) for Dec. 

Markets Index Wrap-Up

Stock Markets

Major stock indexes closed mixed this week. The 30-stock Dow Jones Industrial Average (DJIA) dipped by 0.60%, while the Total Stock Market Index rose by 0.91%. The broad S&P 500 Index climbed by 0.96%, and the technology-heavy Nasdaq Stock Market Composite gained by 3.34%. The NYSE Composite descended by 0.81%. The indicator for investor risk perception, the CBOE Volatility Index (VIX), fell by 5.48%. Sector performance was widely dispersed. Consumer discretionary, communication services, and information technology shares all gained 3% over the week. Energy, utilities, and materials stocks which form the more value-oriented segments of the market all fell over 3%. The geopolitical headlines for the week were dominated by French and South Korean politics, but their impact on U.S. markets was limited.

Other headlines during the week focused on comments from the officials from the Federal Reserve that provided investors with possible clues regarding the pace of interest rate cuts. Federal Reserve Governor Christopher Waller stated that some recent data indicate that progress on inflation may be stalling. Nevertheless, he is inclined to support a cut to the policy rate at the Fed’s upcoming meeting in December if no surprising incoming economic data develops. Fed Chair Powell was more neutral in his comments that “The U.S. economy is in very good shape, and there’s no reason for that not to continue.” Waller’s comments and positive economic news boosted expectations for a 25-basis-point rate cut in December, priced into futures markets.

U.S. Economy

Data released in the past week continued to support a resilient economy and labor market. Both in expansion territory for November were the new orders components of the Institute for Supply Management (ISM) manufacturing and services Purchasing Managers’ Index (PMI). Regarded as the leading indicators of economic growth, both manufacturing and services PMI indicate the likelihood of upward expansion.

Earlier in the week, the release of the November data from the U.S. labor market indicated that it is poised for a rebound. The number of job openings in October climbed to 7.74 million, up from September’s revised 7.37 million reading. While layoffs during the month hardly changed, the number of Americans quitting jobs voluntarily (regarded by some as a better measure of labor market conditions) increased to 3.3 million. New jobs added, expected to be 220,000, overshot consensus and registered 227,000, and the weaker data reported for last month was revised higher. The unemployment rate broadly ticked higher to 4.2%. However, this remains well below the long-term averages of around a 5.7% unemployment rate in the U.S.   

Metals and Mining

Gold and silver remain confined in a consolidation pattern as investors anticipate a new catalyst for a breakout. Investors traverse a balancing act between rising inflation risks, geopolitical uncertainties, and a shallower easing cycle that tends to strengthen the U.S. dollar and higher bond yields. Although the current price fluctuations of these precious metals tend to disappoint ahead of the coming new year, analysts nevertheless remain bullish. While it may take time for the markets to adjust to the new administration that formally takes over on January 20, 2025, financial institutions such as Goldman Sachs, Bank of America, the CIBC, and other Canadian banks see gold prices likely to push to $3,000 per ounce next year. Towards the second half of 2025, gold prices may rally as the threat of a global trade war drives inflation higher and dampens economic growth.  

The spot prices of precious metals ended mixed for the week. Gold ended at $2,633.37 per troy ounce, lower by 0.37% from last week’s close at $2,643.15. Silver came from $30.63 last week to close this week at $30.97 per ounce for a 1.11% gain. Platinum fell by 1.93% from its close last week at $949.90 to settle this week at $931.55 per troy ounce. Palladium closed this week at $960.29 per troy ounce, 2.32% lower than its close last week at $983.09. The three-month LME prices of industrial metals were mostly up for the week. Copper closed this week higher by 0.71% from its previous weekly close at $9,010.50 to end the week at $9,074.50 per metric ton. Aluminum climbed by 1.73% from its previous close at $2,594.00 to end the week at $2,639.00 per metric ton. Zinc ascended by 0.50% from its previous weekly close at $3,103.00 to close this week at $3,118.50 per metric ton. Tin gained 0.87% from last week’s close at $28,913.00 to end this week at $29,165.00 per metric ton.  

Energy and Oil

OPEC+ postponed its scheduled supply increases by another quarter, as widely anticipated. It is now promising to start unwinding output cuts beginning April 2025 and beyond. This reset simultaneously extends the full unwinding of output cuts by a year until the end of 2026 as the oil group addresses rising non-OPEC production.  This pronouncement failed to convince the oil markets that the bulls would take over in the foreseeable future. Even the postponement of the UAE’s baseline quota increase could not stop ICE Brent from slipping back below $72 per barrel.

Natural Gas

For the report week beginning Wednesday, November 27, to Wednesday, December 4, 2025, the Henry Hub spot price fell by $0.52 from $3.35 per million British thermal units (MMBtu) to $2.83/MMBtu. Regarding Henry Hub futures prices, the December 2024 contract expired on Tuesday, November 26, at $3.431/MMBtu. The price of the January 2025 NYMEX contract decreased by $0.16, from $3.204/MMBtu at the start of the report week to $3.043/MMBtu by the week’s end. The price of the 12-month strip averaging January 2025 through December 2025 futures contracts declined by $0,08 to $3.161/MMBtu. At most locations this report week, natural gas spot prices fell. Price changes ranged from a decrease of $0.52 at the Henry Hub to an increase of $0.68 at Northwest Sumas.

International natural gas futures prices increased during the report week. The weekly average front-line futures prices for liquefied natural gas (LNG) cargoes in East Asia increased by $0.09 to a weekly average of $15.06/MMBtu. Natural gas futures for delivery at the Title Transfer Facility (TTF) in the Netherlands increased by $0.24 to a weekly average of $14.82/MMBtu. In the week last year corresponding to this report week (beginning November 29 and ending December 6, 2023), the prices were $16.10/MMBtu in East Asia and $12.91/MMBtu at the TTF.

World Markets

As jitters about political instability in France abated, the pan-European STOXX Europe 600 Index closed 2.00% higher in local currency terms. Faster policy easing by the European Central Bank (ECB) appeared to be anticipated by the markets. The major European stock indexes likewise climbed. France’s CAC 40 Index added 2.65%, Germany’s DAX rose by 3.86%, and Italy’s FTSE MIB ascended by 4.00%. The UK’s FTSE 100 Index gained by 0.26%. The political concerns in France arose when Prime Minister Michel Barnier’s minority government collapsed after a no-confidence motion was backed by Parliament. The motion was tabled by the National Rally (NR) and left-wing New Popular Front to block the proposed deficit-reducing budget for 2025.

The Week Ahead

In the coming week, watch out for important economic releases such as the CPI and PPI inflation data, wholesale inventories for October, and revised U.S. productivity data for the third quarter. The effect was for the yield spread between German 10-year bunds and French 10-year OATS – a metric for political and financial risk in the Eurozone – to widen at one point to 90 basis points, the most since 2012. Subsequently, the gap narrowed to below 80 basis points after President Emmanuel Macron said he would appoint a new prime minister in “coming days.” He also promised to meet with political leaders from both sides of the aisle to form a new “government of general interest.” On the economic front, the key macroeconomic data in Europe continued to signal a slowing economy in the fourth quarter of 2024. Mainly due to drops in sales of non-food products and auto fuel, Eurozone retail trade volumes decline in October by 0.5% sequentially, after increasing by 0.5% in September. Manufacturing continued to struggle in Germany. Industrial output fell by 1.0% month-over-month, which falls short of expectations for a 1.2% rebound. A decline in the demand for machinery and equipment led to a slump in factory orders by 1.5% for the month.

Japan’s equities rose during the week. The Nikkei 225 Index gained 2.3% while the broader TOPIX Index added 1.7%. The rosy profit outlooks for Japan’s export-heavy industries are supported by the weakness of the nation’s currency. The yen depreciated to approximately the middle of the JPY 150 range against the greenback, from the high JPY 149 range at the end of the previous week. Regarding fixed income, due to the persistent uncertainty about the Bank of Japan’s (BoJ’s) rate hike plans, the yield on the 10-year Japanese government bond closed the week broadly flat at 1.06% after trading in a narrow range. According to Toyoaki Nakamura, a member of the BoJ’s board, a judgment on the merits of incoming data will determine any forthcoming interest rate hike, particularly regarding wage and economic growth. The timing of the next 25-basis-point rate hike is deemed by investors to be split between December and January. The likelihood of a January rate hike is suggested by a recent commentary by BoJ Governor Kazuo Ueda on the need to observe 2025 wage trends and whether wage hikes are being reflected in service prices. Uncertainty around U.S. economic policy remains to be clarified, particularly on the future imposition of tariffs. Average nominal wages grew by 2.6% year-on-year in October, up from a revised 2.5% in September and matching consensus expectations. Real wage growth (adjusted for inflation) remained unchanged following a 0.4% contraction. Household spending fell by 1.3% year-on-year, a reduction for the third consecutive month.

China stocks saw gains in the past week as investors anticipate fresh stimulus measures. Resilient manufacturing data released during the week also supported equities performance. The Shanghai Composite Index climbed by 2.33%. Likewise, the blue-chip CSI 300 was up by 1.44%. The Hong Kong benchmark Hang Seng Index added 2.28%. During the Central Economic Work Conference, an annual meeting where top officials map out the economic agenda for the next year, analysts expect China’s leadership to announce further action to support the economy. Among the topics investors look forward to are economic growth targets and plans for more stimulus. The meeting will last for two days, beginning December 11. There are high expectations that Beijing will roll out additional measures to address growth risks that may be posed by the trade policies of the incoming Trump administration. Economic news released showed that China’s factory activity expanded for the second consecutive month. According to the statistics bureau, the official manufacturing Purchasing Managers’ Index (PMI) increased to a higher-than-expected 50.3 in November from 50.1 in October. The measure of construction and services activity, the nonmanufacturing PMI, fell to a below-consensus 50 in November from 50.2 in October. The 50-mark delineates expansion and contraction.

Key Topics to Watch

• Wholesale inventories for Oct.
• NFIB optimism index for Nov.
• U.S. productivity (revision) for Q3
• Consumer price index for Nov.
• CPI year over year
• Core CPI for Nov.
• Core CPI year over year
• Monthly U.S. federal budget
• Initial jobless claims for Dec. 7
• Producer price index for Nov.
• Core PPI for Nov.
• PPI year over year
• Core PPI year over year
• Import price index for Nov.
• Import price index minus fuel for Nov.

Markets Index Wrap-Up

Stock Markets

All major indexes are up for the week. The 30-stock Dow Jones Industrial Average (DJIA) inched up by 0.42% while the Total Stock Market gained by 0.52%. The broad S&P 500 Index gained 0.56% and the technology-heavy Nasdaq Stock Market Composite climbed by 0.83%. The NYSE Composite added 0.31% while all the Russell indexes posted gains. The CBOE Volatility Index (VIX), the indicator for investor risk perception, fell by 4.18%.

Stocks recorded another week of solid gains that resulted in record intraday highs for the DJIA, S&P 500 Index, and the S&P 400 MidCap Index. The small-cap Russell 2000 Index hit an intraday high of 2,466.49 on Monday, exceeding the record high it established s little over three years ago. Trading was relatively robust in the runup to the Thanksgiving holiday when the markets were closed in its observance. Markets were also closed on the Friday after the holiday.

During the week, domestic policy and geopolitical factors seem to be the major drivers of sentiment. Monday saw investors welcoming the nomination of Scott Bessent, a veteran hedge fund manager, as President-elect Donald Trump’s Treasury secretary. Bessent is expected to bring a Wall Street mindset to his position, prioritizing economic stability and inflation control with a measured approach to tariffs, easing fears of an out-of-consensus selection.

U.S. Economy

Wednesday saw the release of a host of closely watched economic reports. Most of the data came in line with expectations, but there were some exceptions. In October, personal income rose by 0.6% which is about double consensus estimates. Personal spending climbed by 0.4% which is slightly above expectations. Pending home sales also went against expectations for a decline, and instead rose by 2.0%. In the meantime, September’s increase was revised up to its strongest gain in nearly two years at 7.5%. On the other hand, the manufacturing sector appeared to remain in a slump. Durable goods orders in October missed the expected consensus expectation of 0.5% and rose by only 0.2%. Orders, with the exclusion of defense and transportation goods (a generally accepted proxy for capital investment), fell by 0.2%.

Metals and Mining

The past weeks proved volatile for the gold market, a trend that does not appear to be diminished anytime soon. The yellow metal has been relatively resilient as it holds fast to its critical support level at $2,600 per ounce, but the past week revealed that it is balancing at a major decision point as traders and investors await news that will favor one direction or the other. Presently, the U.S. economy is not running too hot nor too cold – a “Goldilocks” scenario. The current scenario does not decisively attract investors to gold as a hedge against inflation and safe-have asset. Inflation pressures remain stubbornly elevated as seen from the core Personal Consumption Expenditure (PCE) Index reading of 2.8% over the last 12 months. This is much higher than the Federal Reserve’s target of 2%. The PCE is the Fed’s preferred gauge for inflation.

Spot prices for precious metals generally ended lower for the week. Gold, formerly at $2,716.19, closed this week at $2,643.15 per troy ounce, down by 2.69%. Silver, which last week closed at $31.35, settled this week at $30.63 per troy ounce for a loss of 2.30%.  Platinum ended last week at $966.30 and this week at $949.90 per troy ounce for a decline of 1.70%. Palladium, which a week ago was priced at $1,011.87, closed this week at $983.09 per troy ounce for a drop of 2.84%.  The three-month LME prices for industrial metals were mixed. Copper closed this week at $9,010.50 per metric ton, slightly up by 0.02% from its week-ago close of $9,008.50. Aluminum ended this week at $2,594.00 per metric ton, down by 1.43% from last week’s closing price of $2,631.50. Zinc settled at $3,103.00 this week for a gain of 3.78% over last week’s close of $2,990.00. Tin closed this week at $28,913.00 per metric ton, modestly higher than last week’s close of $28,750.00 by 0.57%.

Energy and Oil

The Thanksgiving holidays disrupted the highly eventual week in the global markets that prompted OPEC+ to postpone its December 1 meeting as it ramped up its shuttle diplomacy. The decision to delay its policy meeting to December 5 was due to members reportedly discussing postponing the anticipated output hike due to start in January 2025, to simultaneously coordinate the future of compensation buts with Iraq and Kazakhstan. ICE Brent traversed a very narrow bandwidth of less than $1 per barrel all week, between $72 and $73 per barrel despite the postponement. Meanwhile, in what proved to be the war’s second-largest attack of the past month, Russia attacked Ukraine’s energy assets with 91 missiles and 97 drones this week. Over 1 million people lost power in the immediate aftermath of the strikes and damages were reported in 9 regions.  Geopolitics could make a surprise comeback in December as the Russian-Ukraine war intensifies and Iran comes to the forefront of Trump’s policy move. These developments would complement OPEC+’s decisions and push oil prices higher. 

Natural Gas

For this report week from Wednesday, November 13, to Wednesday, November 20, 2024, the Henry Hub spot price rose by $0.24 from $2.10 per million British thermal units (MMBtu) to $2.34/MMBtu. Regarding Henry Hub futures, the price of the December NYMEX contract increased by $0.21 from $2.983/MMBtu at the start of the report week to $3.193/MMBtu at the end of the week. The price of the 12-month strip averaging December 2024 through November 2025 futures contracts rose by $0.13 to $3.227/MMBtu.  Natural gas spot prices rose at all major regional pricing locations this report week. Price changes ranged from an increase of $0.03 at the Houston Ship Channel to an increase of $2.45 at the Waha Hub.

International natural gas futures prices rose this report week. The weekly average front-month futures prices for liquefied natural gas (LNG) cargoes in East Asia increased by $0.63 to a weekly average of $14.17/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 $0.90 to a weekly average of $14.38/MMBtu. In the week last year corresponding to this report week (beginning November 15 and ending November 22, 2023), the prices were $16.83/MMBtu in East Asia and $14.41/MMBtu at the TTF.

World Markets

European stocks rose despite the looming uncertainty about U.S. trade tariffs and the future direction of interest rates. The pan-European STOXX Europe 600 Index rose by 0.32% in local currency terms. The major stock indexes were mixed, with Germany’s DAX climbing by 1.57%, Italy’s FTSE MIB falling by 0.70%, and France’s CAC 40 losing by 0.29%. The UK’s FTSE 100 added 0.24%. For a second month in November, the annual inflation in the eurozone accelerated to 2.3% from 2.0% in October, based on a preliminary estimate. The increase in inflation was expected because last year’s declines in energy prices are no longer incorporated in the annual rates. The underlying inflation, however, unexpectedly eased. Core inflation (excluding volatile components such as food, energy, alcohol, and tobacco prices) remained at 2.7% while services’ prices inched down from 4.0% to 3.9%. The European Central Bank is still expected by the financial markets to lower borrowing costs next month, but just by how much remains uncertain. Meanwhile, the German economy continued to struggle in the last quarter of this year based on mixed economic data. Seasonally adjusted retail sales in October decreased by 1.5% sequentially, worse than the forecasted 0.5% drop, and still, the seasonally adjusted number of unemployed rose by 7,000, much less than the forecasted 20,000.

Japan’s stock markets sustained modest losses for this week. The Nikkei 225 Index fell by 0.2% while the broader TOPIX Index lost by 0.6%. The slump in the market was due to global investor risk appetite reacting to geopolitical risk pressures driving demand for assets perceived to be safer. The subsequent strength in the national currency lent support to Japan’s export-heavy industries. The yen strengthened to about JPY 150 against the USD, from the prior week’s JPY 154 range since it is perceived to have the characteristics of a safe-haven asset. Further interest in the yen is bolstered by speculation about the potential timing of the Bank of Japan’s (BoJ’s) next interest rate hike, forecasted to be either in December or January. The core consumer price index (CPI) in the Tokyo area, widely regarded as a leading indicator of nationwide trends, ascended by 2.2% year-on-year in November. This is up from 1.8% year-on-year in October and higher than consensus expectations. BoJ Governor Kazuo Ueda has stressed that interest rates will be increased if the economy and prices perform in line with the central bank’s forecasts. Japan’s Prime Minister Shigeru Ishiba outlined his latest policy vision which he intends to pursue with a new stimulus package aimed at boosting the economy, particularly in rural areas. The package is intended to counter the negative effects of inflation on businesses and households by curbing rising energy costs, providing cash handouts to low-income households, and increasing the tax-free salary threshold to boost disposable incomes.  

Chinese stocks rose as the market’s hopes for greater government support offset worries about the potential tariff hike in the U.S. The Shanghai Composite added 1.81% while the blue-chip CSI 300 climbed by 1.32%. The Hong Kong benchmark Hang Seng Index ascended by 1.01%. The People’s Bank of China injected RMB 900 billion into the banking system while leaving the lending rate unchanged at 2%, according to expectations. With RMB 1.45 trillion set to expire in December, the operation resulted in a net withdrawal of RMB 550 billion from the banking system for November. A sharp increase in local government bond issuance will increase liquidity pressures in the banking system toward the end of the year as Beijing increases efforts to stimulate the economy. With tighter liquidity conditions and threats of additional U.S. tariffs, analysts expect that the government will implement further economic consolidation policies by 2025.  Regarding China’s economy, profits at industrial firms dipped by 10% in October from last year, narrowing from a 27.1% decline in September. This is the third straight monthly decline, according to the National Bureau of Statistics. The slower drop is partly attributable to the government’s support measures and profit growth in the equipment and high-technology manufacturing industries.

The Week Ahead

Nonfarm payrolls data, the Fed Beige Book, and the ISM PMIs are among the important economic releases scheduled for the coming week.

Key Topics to Watch

• S&P final U.S. manufacturing PMI for Nov.
• ISM manufacturing for Nov.
• Construction spending for Oct.
• Job openings for Oct.
• Auto sales for Nov.
• ADP employment for Nov.
• Louis Fed President Musalem speaks (Dec, 4)
• S&P final U.S. services PMI for Nov.
• ISM services for Nov.
• Factory orders for Oct.
• Fed Beige Book
• Initial jobless claims for Nov. 30
• U.S. trade deficit for Oct.
• U.S. employment report for Nov.
• U.S. unemployment rate for Nov.
• U.S. hourly wages for Nov.
• Hourly wages year over year
• Consumer sentiment (prelim) for Dec.
• Chicago Fed President Goolsbee speaks (Dec. 6)
• Consumer credit for Oct.

Markets Index Wrap-Up

Stock Markets

All major stock indexes advanced during the week. The 30-stock Dow Jones Industrial Average (DJIA) gained 1.96% while the Total Stock Market Index climbed by 2.17%. The broad S&P 500 Index went up by 1.68% and the technology-tracking Nasdaq Stock Market Composite added 1.73%. The NYSE Composite Index climbed by 2.43%. The CBOE Volatility Index (VIX), the gauge for investor risk perception, fell by 5.58%.  

Stocks are on track to finish the year on a strong note. Solid fundamentals will continue to support equities all the way to the start of 2025. However, even with the current optimism, prudence is enjoined to anticipate potential curveballs and for investors to plan the positions to best take advantage of the growing potential. Tariffs and how the incoming administration may choose to use them are a source of uncertainty. The technology sector also appears to be proceeding through a period of consolidation to digest its disproportionate gains over the last two years.

In order to strengthen portfolios against potential risks, investors may seek to attain an appropriate allocation to value-style investments and balance small- and mid-cap companies that tend to generate a greater share of their revenue in the U.S. They will tend to relatively benefit from stronger domestic growth and lower tax rates which the incoming administration promised to implement.

U.S. Economy

The Department of Labor reported on Wednesday that initial jobless claims unexpectedly dropped for the week ended November 16, 2024. This appeared to have driven positive market sentiment toward the end of the week. Applications for unemployment benefits fell to 213,000. This is the lowest reading since April 2024 and constituted a decline of 6,000 from the prior week. The number of continuing claims reached a three-year high of 1.91 trillion, however, some of this increase was due to secondary effects of the aircraft machinist strike at Boeing, a matter which has since been resolved.

Investors also appear to have been encouraged by the National Association of Realtors’ report of existing home sales in October. For the first time since July 2021, existing home sales rose year-over-year for the first time. Factors leading to the growth in housing demand are continued economic growth, additional job gains, and stabilizing mortgage rates, as cited by the upbeat report.

As investors look for clues around the pace of interest rate cuts, much of the macroeconomic focus remained on the Federal Reserve’s final meeting of the year in December. Federal Reserve Governor Lisa Cook stated in a speech on Wednesday that “the disinflationary process is continuing” and that she perceives the path of short-term interest rates would appropriately be downward although the magnitude and timing of rate cuts should be driven by inflation and labor market data.

Metals and Mining

Over the past year, the gold market has been on a rally with shallow dips that caused many cautious investors to await a correction to the support at $2,100 per ounce. However, the U.S. election and its decisive results created the opportunity for many on the sidelines to jump back in. Markets experienced fresh momentum in the U.S. dollar and rising bond yields. A significant headwind for gold was created by investors who zeroed in on Trump’s America-first policies. Gold prices fell by more than 9% from its peak at $2,800 per ounce three weeks ago. With its nearly 6% surge this week, it appears that the correction is over, as gold once again demonstrated that it is much bigger than the U.S. market. Its role as a necessary global financial asset continues to grow. Gold’s attractiveness to a significant safe-haven bid as the war in Ukraine escalates. In the Middle East and Asia, meanwhile, geopolitical tensions remain high with China striving to assert its dominance.

Spot prices of precious metals surged for the week. Gold shot up 5.97% from its previous weekly close at $2,563.25 to end this week at $2,716.19 per troy ounce. Silver closed at $31.35 per troy ounce, which is 3.57% higher than its last weekly close at $30.27. Platinum, which closed last week at $941.80 and ended this week at $966.30 per troy ounce for a 2.60% gain. Palladium, priced last week at $953.58, rose by 6.11% to close this week at $1,011.87 per troy ounce. The three-month LME prices of industrial metals ended mixed for the week. Copper closed this week at $9,008.50 per metric ton appreciated by 0.07% from its close last week at $9,002.50. Aluminum came from its last weekly close at $2,649.50 to settle at $2,631.50 per metric ton for a modest decline of -0.68%. Zinc ended this week at $2,990.00 per metric ton, 1.44% higher than last week’s close of $2,947.50. Tin, which settled last week at $28,742.00, ended this week at $28,750.00 per metric ton for a modest gain of 0.03%.

Energy and Oil

Brent futures have been trading within a narrow range of $73-74 per barrel. However, the return of geopolitical risk has caused oil prices to climb and in effect recover most of November’s losses to date. Russia’s launch of hypersonic missiles into Ukraine keeps the markets distracted for now. Meanwhile, the possible outcome of an OPEC+ meeting taking place next week looms large for oil. In the coming week, expect plenty of OPEC+ policy speculation. Responding to geopolitical worries, the International Atomic Energy Agency passed a resolution urging Iran to enhance cooperation with the global nuclear community. The IAEA further requests for a comprehensive assessment of Iran’s arsenal. Tehran defies compliance, however, and instead suggests capping its stock of uranium.

Natural Gas

For the report week from Wednesday, November 13 to Wednesday, November 20, 2024, the Henry Hub spot price rose by $0.24 from $2.10 per million British thermal units (MMBtu) to $2.34/MMBtu. Regarding Henry Hub futures, the price of the December 2024 NYMEX contract increased by $0.21, from $2.983/MMBtu at the start of the report week to $3.193/MMBtu at the week’s end. The price of the 12-month strip averaging December 2024 to November 2025 futures contracts rose by $0.13 to $3.227/MMBtu. Natural spot prices rose at all major pricing locations for the report week. Price changes ranged from an increase of $0.03 at a Houston Ship Channer to an increase of $2.45 at the Waha Hub.

International natural gas futures prices increased this report week. The weekly average front-month futures prices for liquefied natural gas (LNG) cargoes in East Asia increased $0.63 to a weekly average of $14.17/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 $0.90 to a weekly average of $14.38/MMBtu. In the week last year corresponding to this report week (beginning November 15 to November 22, 2023), the prices were $16.83/MMBtu in East Asia and $14.41/MMBtu at the TTF.

World Markets

the pan-European STOXX Europe 600 Index closed the week 1.06% higher in local currency terms. Investors were hopeful that the European Central Bank (ECB) could lower borrowing costs in December after a deterioration in the economic outlook was signaled by the purchasing managers’ surveys. Notwithstanding the pan-European index performance, most major stock indexes fell, but they were overall mixed. Italy’s FTSE MIB dipped by 2.04%, France’s CAC 40 Index declined slightly by 0.20%, and Germany’s DAX rose by 0.58%. The UK’s FTSE 100 Index surged by 2.46%. In the euro area, business activity unexpectedly contracted in November, which, according to purchasing managers’ surveys, underscore the uncertain economic outlook. The HCOB Flash Eurozone Composite PMI Output Index fell unexpectedly to a 10-month low. The manufacturing sector plunged deeper into recession and the services sector began to struggle after two months of marginal growth. The PMIs for France and Germany, the bloc’s largest economies, also shrank, while the UK’s business activity ended a 12-month period of sustained expansion and moved into contractionary territory. Expectations that the ECB could further ease monetary policy in December appeared to be bolstered by the Weak PMI data. This may be offset, however, by a pickup in negotiated wage growth which may reinforce the case for continued policy caution. Negotiated wage growth is a measure monitored by the ECB for signals of underlying inflationary pressures.

Japan’s equities markets pulled back during the week, albeit modestly, with the Nikkei 225 Index dropping by 0.93% and the broader TOPIX Index sliding by 0.56%. Impacting investors were heightened geopolitical tensions that dented risk appetite and drove demand for assets perceived to be safer. These safer assets include the Japanese yen which traded mostly within the JPY 154 range against the U.S. dollar. Consumer inflation remained above the Bank of Japan’s (BoJ’s) 2% target in October. The headline consumer price index fell to 2.3% year-on-year, this however remained aligned with expectations given the return of electricity and gas subsidies. BoJ Governor Kazuo Ueda said that if the economy and prices move as expected, the bank will keep raising rates. On the economic front, service providers recorded a slight expansion in activity within Japan’s private sector, according to the November Flash Purchasing Managers’ Index (PMI) data. On the other hand, manufacturers saw a sustained reduction in output. Across the private sector, price pressures remained elevated and firms increasingly sought to pass on higher cost burdens to consumers. On Friday, Japan’s government approved an economic package to ease the pain of inflation on households and businesses. The package is also designed to revitalize the struggling regional economies. It is estimated to add JPY 39 trillion (US$250 billion) to the economy, combined with expected spending from the private sector. Measures adopted include subsidies to curb rising energy costs and cash handouts to low-income households. Another measure in the package involves an increase in the tax-free salary threshold to boost disposal incomes.    

A light economic calendar and concerns about the incoming Trump administration curbed risk appetites and caused equities to decline. The Shanghai Composite Index dropped by 1.91% and the blue-chip CSI 300 declined by 2.6%. The Hong Kong benchmark Hang Seng Index gave up 1.01%. The country’s banks left their one- and five-year loan prime rates unchanged at 3.1% and 3.6% respectively, a move largely anticipated after banks slashed the benchmark lending rates by 25 basis points in October, which was greater than expected. This makes it cheaper for consumers to take out mortgages and other loans. A slew of stimulus measures was unveiled by the government in late September to revive consumer demand and boost the ailing housing sector. Officials have signaled further easing measures in the near term. Potentially cutting the reserve requirement ratio for domestic banks is among these measures. Some analysts point out, however, that policymakers will wait until the new U.S. administration takes over in January and U.S. policies are clarified. In other developments, China’s youth unemployment rate eased for the second straight month since August when it hit its highest level this year. Excluding students, the jobless rate for 16- to 24-year-olds came in at 17.1% in October, down from 17.6% in September.

The Week Ahead

The PCE inflation data, consumer confidence, and the minutes of the Fed’s November FOMC meeting are among the important economic releases scheduled for this week.

Key Topics to Watch

• S&P Case-Shiller home price index (20 cities) for Sept.
• Consumer confidence for Nov.
• New home sales for Oct.
• Minutes of Fed’s November FOMC meeting
• Initial jobless claims for Nov. 23
• Durable-goods orders for Oct.
• Durable-goods minus transportation for Oct.
• Advanced U.S. trade balance in goods for Oct.
• Advanced retail inventories for Oct.
• Advanced wholesale inventories for Oct.
• GDP (first revision) for Q3
• Chicago Business Barometer (PMI) for Nov.
• Personal income (nominal) for Oct.
• Personal spending (nominal) for Oct.
• PCE index for Oct.
• PCE (year-over-year)
• Core PCE index for Oct.
• Core PCE (year-over-year)
• Pending home sales for Oct.

Markets Index Wrap-Up

Stock Markets

After the exuberant post-election rally, the stock market takes a breather as winning investors take profits. Major stock indexes across the board ended lower this week. The 30-stock Dow Jones Industrial Average dropped by 1.24% while the Total Stock Market fell by 2.15%. The broad S&P 500 Index lost by 2.08% and the technology-heavy Nasdaq Stock Market Composite dipped further, giving up 3.15%.  The NYSE Composite lost by 1.46%. The CBOE Volatility Index (VIX), the generally accepted indicator of investor risk perception, climbed by 8.03%.

The wide dispersion of sector returns reflects the potential policy implications of the incoming administration for corporate earnings. Financials and energy shares continue to benefit from hopes for deregulation and merger approvals. Similarly, the price of Bitcoin had surged by nearly a third (32.46%) at its peak on Wednesday since the eve of the election, on investors’ anticipation of looser regulation for digital currencies. On the other hand, some healthcare shares sharply fell on Friday following the announcement on Thursday evening that Robert F. Kennedy, Jr., would be President-elect Donald Trump’s nominee as Secretary of Health and Human Services (HHS). Kennedy is a vocal critic of the pharmaceutical industry and existing public health programs, particularly vaccine initiatives. As HHS head, he would oversee Medicare, Medicaid, and other programs accounting for roughly one-quarter of government spending.

Also, notable movers during the week were electric vehicle (EV) makers, particularly Tesla. A surge in the stock price appears to have been driven by promises made by President-elect Trump that Tesla CEO Elon Musk would play a key role in his administration. At its intraday high on Monday, the stock gained 42.63% since the day before the election. Tesla and other EV makers fell back late in the week, however, when Reuters confirmed that the incoming administration plans to eliminate the $7,500 consumer tax credit for EV purchases.

U.S. Economy

The economic calendar this week was underscored by inflation data released on Wednesday. The results were largely in line with expectations. Headline prices rose by 0.2% in October and core prices (excluding food and energy) rose by 0.3%. However, year-on-year headline inflation rose for the first time since March, from 2.4% to 2.6%, due largely to stubbornly high housing costs. On Thursday, the monthly headline and core producer price inflation were released. Producer prices rose in line with expectations and their consumer counterparts.

As if to address the market expectations that rates are likely to be lowered soon. Federal Reserve Chair Jerome Powell delivered a speech on Thursday and remarked that “the economy is not sending any signals that we need to be in a hurry to lower rates,” thereby somewhat dampening sentiment. Expectations priced into futures markets for a quarter-point cut in December fell moderately over the week, from 64.6% to 58.4%. Expectations for a full percentage point of cuts by the end of the year fell further, from 41.3% to 32.6%, although it is not certain whether this was in reaction to Powell’s comments or new policy signals from the incoming administration.

Metals and Mining

Spot prices of precious metals fell for this week. Gold gave up 4.53% from its close one week ago at $2,684.77 to close this week at $2,563.25 per troy ounce. Silver ended this week at 3.32% down from its closing price last week of $31.31 to end this week at $30.27 per troy ounce. Platinum fell by 3.16% from last week’s close at $972.49 to finish this week at $941.80 per troy ounce. Palladium dropped by 3.91% from its last weekly close of $992.35 to settle this week at $953.58 per troy ounce. The three-month LME prices of industrial materials were mixed. Copper, which ended last week at $9,443.50, closed this week at $9,002.50 per metric ton, a drop of 4.67%. Aluminum, last priced at $2,620.50 one week ago, ended this week at $2,649.50 per metric ton for a gain of 1.11%. Zinc closed the previous week at $2,979.50 and this week at $2,947.50 per metric ton for a loss of 1.07%. Tin, priced last week at $31,648.00, last traded this week at $28,742.00 per metric ton for a loss of 9.18%.

Energy and Oil

The overwhelmingly bearish sentiment in the oil market was partly offset by the steep gasoline and diesel inventory draws in the United States. However, the offset was not large enough to stop the decline in oil prices. Meanwhile, China’s refinery throughput fell by 4.6% year-over-year to 14.02 million barrels per day (b/d), bearing disproportionately more heavily on independent teapot refiners in Shandong province as their utilization rate plunged to 58%, almost 20 percentage points lower than this time last year. Brent below $72 per barrel appears justified, given that China posted its seventh successive month of refinery run declines, and Jerome Powell cooled down expectations on U.S. interest rate cuts.

In other news, OPEC once more cut global oil demand growth forecasts for 2024 and 2025 for the fourth consecutive month. The projections were revised mostly by lowering China’s consumption upside to 450,000 b/d from last month’s monthly oil report, expecting 2024 demand growth to come in at 1.82 million b/d. Meanwhile, the International Energy Agency (IEA) believes that the 2025 global oil supply will exceed demand by an astounding 1 million b/d. This is equal to nearly 1% of total production worldwide, driven by the U.S., Guyana, and Canada. The IEA is keeping its demand forecast for next year unchanged at 990,000 b/d.

Natural Gas

For this report week beginning Wednesday, November 6 and ending Wednesday, November 13, 2024, the Henry Hub spot price rose by $0.30 from $1.80 per million British thermal units (MMBtu) to $2.10/MMBtu.  Regarding Henry Hub futures, the price of the December 2024 NYMEX contract increased by $0.24, from $2.747/MMBtu to $2.983/MMBtu through the report week. The price of the 12-month strip averaging December 2024 through November 2025 futures contracts rose by $0.14 to $3.100/MMBtu. Natural gas spot prices rose at most locations along with the Henry Hub price this report week. Price changes ranged from a decrease of $0.72 at Northwest Sumas to an increase of $1.63 at the Waha Hub.

International natural gas futures prices increased this report week. The weekly average front-month futures prices for liquefied natural gas (LNG) cargoes in East Asia increased by $0.02 to a weekly average of $13.54/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 $0.69 to a weekly average of $13.48/MMBtu. In the week last year corresponding to this report week (beginning November 8 to November 15, 2023), the prices were $17.17/MMBtu in East Asia and $14.97/MMBtu at the TTF.

World Markets

The pan-European STOXX Europe 600 Index ended lower by 0.69%, its fourth consecutive weekly descent. Investor sentiment is weighed on the concerns about the incoming Trump administration’s trade policies and the political upheaval in Germany. Also dampening buying incentives were cautious comments by Federal Reserve Chair Jerome Powell regarding U.S. interest rates. The major stock indexes were mixed. France’s CAC 40 Index dipped by 0.94%, Italy’s FTSE MIB climbed by 1.11%, and Germany’s DAX was mostly unchanged. The UK’s FTSE 100 Index was modestly down. Data on the Eurozone’s economy remained supportive of a soft landing. Eurostat’s second GDP estimate confirmed the surprisingly resilient 0.4% third-quarter expansion. Additionally, although Germany’s economy is expected to contract by 0.1%, the European Commission projected growth of 0.8% in 2024. Other data indicate that the labor market remained stable. In the third quarter, employment rose by 0.2%, compared to 0.1% in the preceding three months. Regarding monetary policy, the European Central Bank (ECB) policymakers unanimously approved of the quarter-point interest rate cut in October because, according to the minutes of the meeting, “the disinflationary trend was getting stronger” and there was a need to avoid “harming the real economy by more than was necessary.” The ECB also cited “prudent risk management” and provided insurance against downside risks that could lead to an undershooting of the inflation target.

Japan’s stocks lost ground over the week. The Nikkei 225 Index fell by 2.2% while the broader TOPIX Index slid by 1.1%. Providing some degree of support was the weakness of the yen since many of the listed counters generate revenues from export sales, but the uncertainties related to President-elect Donald Trump’s incoming administration raising tariffs weighed on the outlook for these same companies that heavily export to the U.S. The yen weakened to the JPY 155 range against the U.S. dollar from about JPY 152.6 at the end of the preceding week. The greenback strengthened at the back of Trump’s victory in the recent presidential election. The yen came under pressure when some fears arose that the incoming administration’s policies could prove inflationary and halt the plans of the Federal Reserve to lower borrowing costs. Another factor is the uncertainty regarding the timing of future interest rate hikes by the Bank of Japan (BoJ). Japan’s gross domestic product grew by 0.2% quarter-on-quarter during the third quarter of this year, slowing from the 0.5% increase recorded for the second quarter. The economy grew by 0.9% on an annualized basis, down from 2.2%. Increased private consumption (which accounts for more than half of the economy) drove the second consecutive quarter of GDP growth. A one-off income tax cut and higher summer bonuses also supported the GDP reading for that quarter.

Evidence of persistent deflation and worries about potential U.S. tariffs under income U.S. President Trump impacted investor confidence and brought Chinese equities lower for the week. The Shanghai Composite Index dropped by 3.52% while the blue-chip CSI 300 lost 3.29%. The Hong Kong benchmark Hang Seng Index slumped by 6.28%. Largely due to lower food and energy prices, China’s consumer price index rose by a below-consensus 0.3% in October year-on-year, down from 0.4% in September. Core inflation (which excludes volatile food and energy costs) increased by 0.2%, more than the 2.5% decrease analysts predicted and accelerating from the 2.8% drop in September, further extending the deflation in factor gate prices that commenced in late 2022. Retail sales expanded by 4.8% from a year ago which exceeded both analysts’ expectations and September’s 3.2% rise, marking the strongest growth since February. Industrial production rose by 5.3% year-on-year, lower than forecasted, and the 5.4% increase in September amid weaker auto sales. According to data from the National Bureau of Statistics, new home prices in 70 cities dropped in October by 0.5% from September, compared to home prices dropping by 0.7% from August. The October decline marked the second month of slowing home price declines and the slowest pace since March. The improvement was the result of Beijing unleashing a series of stimulus measures in recent months, which are aimed at boosting the housing sector. The measures include reducing mortgage rates, cutting taxes on home purchases, and relaxing homebuying curbs in big cities.

The Week Ahead

In the coming week, important economic releases will include the Conference Board’s leading indicators, PMI data, and the results of the Philadelphia Fed manufacturing survey.

Key Topics to Watch

• Home builder confidence index for Nov.
• Chicago Fed President Austan Goolsbee welcoming remarks (Nov. 18)     
• Housing starts for Oct.
• Building permits for Oct.
• Chicago Fed President Austan Goolsbee speaks (Nov. 19)  
• Fed Gov. Lisa Cooks speaks (Nov. 20)
• Fed Gov. Michelle Bowman speaks (Nov. 20)
• Initial jobless claims for Nov. 16
• Philadelphia Fed manufacturing survey        
• Cleveland Fed President Beth Hammack welcoming remarks (Nov. 21)
• Existing home sales for Oct.
• Leading economic index for Oct.
• Kansas City Fed President Jeff Schmid speaks (Nov. 21)    
• Fed Vice Chair for Supervision Michael Barr speaks (Nov. 21)      
• S&P flash U.S. services PMI for Nov.
• S&P flash U.S. manufacturing PMI for Nov.
• Consumer sentiment (final) for Nov.
• Fed Gov. Michelle Bowman speaks (Nov. 22)

Markets Index Wrap-Up

Stock Markets

U.S. stock indexes rallied sharply this week in reaction to the decisive U.S. presidential election outcome that cleared the cloud of uncertainty hovering over the markets. The 30-stock Dow Jones Industrial Average (DJIA) jumped by 4.61% while the Total Stock Market climbed by 5.06%. The broad S&P 500 gained by 4.66% while the technology-heavy Nasdaq Stock Market Composite surged by 5.74%.  The NYSE Composite added 3.55%. Investor risk perception as gauged by the CBOE Volatility Index (VIX) dropped by 31.72%.

Stocks posted their best-ever post-election rally in the nation’s history, with the Republicans garnering a strong political mandate, having won the White House, the Senate, and most likely the House. There are potential market implications from the shift in the balance of power, despite campaign trail pledges not always translating into policy. The new administration’s promise of tax cuts and deregulation could enhance more rapid economic growth. On the other hand, tariffs and debt worries may cause further rate hikes and pressure bonds.

During this cycle, the Federal Reserve cut interest rates for the second time and continued to maintain a somewhat restrictive policy. Nevertheless, the Fed may be convinced to move more slowly in anticipation of the strong growth and possibly more dovish fiscal policy next year as markets start to price in a shallower rate-cutting cycle. Fundamental conditions remain favorable, which may create opportunities to broaden equity allocations and lock in high bond yields. In any case, it is advisable to refocus on long-term fundamentals rather than focusing solely on recent political shifts.

U.S. Economy

The Federal Reserve announced a 25-basis-point (0.25 percentage point) cut in the federal funds rate following its scheduled policy meeting concluded on Thursday. This is the Fed’s first easing move since it cut rates by 50 basis points in mid-September. However, the week’s biggest surprise was the release of the Institute for Supply Management’s gauge of October services sector activity on Tuesday. The services sector activity came in at 56.0 which is well above expectation (readings above 50.0 indicate expansion) and the best performance since August. Fortunately, even as activity picked up, price pressures somewhat eased, reversing a string of three monthly gains. Surveyed companies reported they were only minimally impacted by recent severe weather as compared to the larger impact on manufacturing firms.

As yields largely ended lower than where they ended the previous week, U.S. Treasuries generated positive returns heading into Friday. Some short-term yields increased slightly while intermediate- and long-term yields ended slightly lower. (Recall that yields and bond prices move in opposite directions.) On Wednesday, the previous day’s election results sent yields upward, although the expected rate cut from the Federal Reserve helped bring them lower by Thursday evening.

Metals and Mining

The spot price of precious metals corrected on the back of improving the risk perception of investors in the financial markets, reducing the demand for risk haven assets for the moment. Gold closed at $2,684.77 per troy ounce this week, down by 1.89% from last week’s closing price of $2,736.53. Silver closed at $31.31 per troy ounce, lower by 3.63% from the previous weekly close of $32.49. Platinum settled at $972.49 per troy ounce, down by 2.37% from last week’s closing price of $996.08. Palladium closed this week at $992.35 per troy ounce, down by 10.16% from last week’s close at $1,104.60. The three-month LME prices of industrial metals were mixed. Copper ended the week at $9,443.50 per metric ton, lower by 1.33% from the previous week’s closing price of $9,570.50. Aluminum ended at $2,620.50 per metric ton, 0.79% higher than its last traded price of $2,600.00 one week ago. Zinc settled at $2,979.50 per metric ton, 2.93% down from last week’s closing price of $3,069.50. Tin closed at $31,648.00 per metric ton, 0.24% lower than the previous week’s close of $31,724.00.               

Energy and Oil

Global newsfeeds this week were dominated by the U.S. presidential election, resulting in widespread speculation regarding how the new administration would actualize its election promises in the coming weeks and months. In the meantime, the approaching Hurricane Rafael, which may be the last in this Atlantic season, has temporarily shut down about 400,000 barrels per day (b/d) of production. Ahead of Hurricane Rafael through the U.S. Gulf of Mexico, offshore operators evacuated 17 producing platforms. Even though it is gradually weakening, the seventeenth named storm of this hurricane season threatens some 4 million b/d of production capacity. In recent sessions, ICE Brent traded around the $75 per barrel level, suggesting that oil prices will remain rangebound. For the longer term, President Trump’s return to power has renewed the prospects of revising the stalled 830,000 b/d Keystone XL pipeline which is intended to carry Canadian oil from Alberta. Operator TC Energy is expected to drop its $15 billion claim against the U.S. government. 

Natural Gas

For the report week from Wednesday, October 30, to Wednesday, November 6, 2024, the Henry Hub spot price fell by $0.14 from $1.94 per million British thermal units (MMBtu) to $1.80/MMBtu.  Regarding Henry Hub futures, the price of the December 2024 NYMEX contract decreased by $0.10, from $2.845/MMBtu at the start of the week to $2.747/MMBtu at the week’s end. The price of the 12-month strip averaging December 2024 through November 2025 futures contracts declined by $0.07 to $2.965/MMBtu. Natural gas spot prices fell at most major pricing locations for this report week. Price changes ranged from a decrease of $2.57 at the Waha Hub to an increase of $0.25 at SoCal Citygate.

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 $0.17 to a weekly average of $13.52/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 $0.66 to a weekly average of $12.79/MMBtu. In the week last year corresponding to this report week (beginning November 1 and ending November 8, 2023), the prices were $17.46/MMBtu in East Asia and $14.63/MMBtu at the TTF. 

World Markets

Worries about the impact of U.S. President-elect Donald Trump’s trade policies on European economic growth and central bank policy weighed on market sentiment this week. The pan-European STOXX Europe 600 Index ended 0.84% lower in local currency terms. Major stock indexes ended weaker: Italy’s FTSE MIB lost 2.48%, France’s CAC 40 Index declined by 0.95%, and Germany’s DAX softened by 0.21%. The UK’s FTSE 100 Index dipped by 1.28%. The Bank of England’s (BoE’s) policy committee voted 8 to 1 to reduce the key Bank Rate for a second time this year by a quarter-point to 4.75%, in light of inflation continuing to decelerate. Sweden likewise lowered its key rate although Norway left its policy rate unchanged. On the economic front, the HCOB eurozone composite purchasing managers’ index (PMI) was revised higher to 50 in October from an earlier estimate of 49.7. At this level, the indicator sits at the borderline of expansion (greater than 50) and contraction (less than 50). Manufacturing contracted at a slower pace than first estimated, while the services sector output expanded at a slightly faster rate. Business confidence fell to its lowest level for the year so far.

Japan’s stock markets climbed over the week. The Nikkei 225 Index gained 3,8% and the broader TOPIX Index climbed 3.7%. The outcome of the U.S. presidential election and the Federal Reserve rate cut positively impacted investor risk appetite. These events overshadowed the discouraging domestic corporate earnings season where there were some downgrades to company guidance, and the adverse effect of yen strength on Japan’s export-heavy industries. The yen appreciated to about JPY 152 against the USD, from around JPY 153 at the end of the previous week. Authorities committed to closely monitoring the impact of Donald Trump’s election victory on the country’s economy and finances, given the close economic ties between the two countries. On the economic front, Japan’s real (inflation-adjusted) wages fell by 0.1% in September, following a revised decline of 0.8% in August. In line with expectations, nominal wages grew by 2.8% in September, lagging consumer inflation at 2.9%. Household spending fell 1.1% year-on-year in September which was lower than the consensus estimate of 2.1% decline.

China’s stocks rallied as concerns about potential U.S. tariff hikes were offset by Beijing’s unveiling of fresh stimulus measures. The Shanghai Composite Index advanced by 5.51% while the blue-chip CSI 300 gained by 5.5%. The Hong Kong benchmark Hang Seng Index ended higher by 1.08%. The standing committee of the National People’s Congress, China’s top legislative body, announced on Friday a RMB 10 trillion program to refinance local government debt, a key national economic and financial risk flagged by Beijing. Policymakers also raised the local government debt ceiling from RMB 29.52 trillion to RMB 35.52 trillion. This is the first time that the government raised the ceiling midyear since 2015. On trade, exports rose by 12.7% in October which exceeds the forecast and is up sharply from 2.4% in September. This is the fastest export growth rate since July 2022 and was attributed to better weather and steep discounts. Imports fell by 2.3%, down from the previous month’s growth rate of 0.3%. The overall trade surplus rose to $95.72 billion from $81.71 billion in September. The growth in October’s exports indicated strong demand for Chinese goods, which has been an optimistic spot for the economy. Analysts cautioned, however, that the country’s export outlook has become increasingly uncertain in light of a possible trade war when Trump assumes office in 2025.

The Week Ahead

Included among the important economic reports scheduled for release this week are the CPI and PPI inflation, retails sales, and industrial production data.

Key Topics to Watch

• NFIB optimism index for Oct.
• Consumer price index for Oct.
• CPI year over year
• Core CPI for Oct.
• Core CPI year over year
• Monthly U.S. federal budget for Oct.
• Initial jobless claims for Nov. 9
• Producer price index for Oct.
• PPI year over year
• Core PPI for Oct.
• Core PPI year over year
• Import price index for Oct.
• Import price index minus fuel for Oct.
• Empire State manufacturing survey for Nov.
• U.S. retail sales for Oct.
• Retail sales minus autos for Oct.
• Industrial production for Oct.
• Capacity utilization for Oct.
• Business inventories for Sept.

Markets Index Wrap-Up

Stock Markets

All the major indexes are down for this week. The 30-stock Dow Jones Industrial Average (DJIA) slipped down by 0.15% while the Total Stock Market fell by 1.16%. The broad S&P 500 Index dropped by 1.37% with losses among small-cap, mid-cap, and super-composite counters. The Nasdaq Stock Market Composite edged down by 1.50%, and the NYSE Composite gave up 1.04%. The CBOE Volatility Indicator (VIX), which tracks investor risk perception, rose by 7.62%.

On Wednesday, the technology-oriented Nasdaq Composite and the S&P MidCap 400 Index reached record intraday highs before sharply falling back on Thursday. Due partly to cautious earnings reports from Facebook parent Meta Platforms and software giant Microsoft, growth stocks generally lagged value shares. Small caps also outperformed large caps. Roughly 42% of the companies in the S&P 500 Index were expected to report third-quarter earnings over the week. Analysts expected that overall earnings for the S&P 500 would have increased by 5.1% compared to the same quarter one year ago. This would indicate a faster pace of growth than expectations before the start of the reporting season when analysts anticipated earnings to grow by 4.3%.

U.S. Economy

This week, data on two critical key factors were released ahead of the U.S. elections – corporate earnings growth and the U.S. labor market. According to the data, the economy is moderating but remains solidly positive. Earnings growth for the third quarter remains on track for 5%, which is slightly above expectations of approximately 4% growth at the start of the quarter. Earnings growth for the full year is expected to be 9%, well above last year’s 1% growth rate. The jobs report for October came in well below expectations. Some events, however, that may have distorted this reading were last month’s hurricanes and ongoing labor strikes. The labor market may be moderating, but it is not collapsing.

On Tuesday, the Labor Department reported that the number of job openings in September had fallen to its lowest level since January 2021 at.44 million. The number of Americans leaving jobs was relatively unchanged, as well as the number of those quitting voluntarily which is considered a better measure of labor market conditions. On Friday, however, the Labor Department reported that nonfarm payrolls were overall “essentially unchanged” over the month, with employers adding only 12,000 jobs. This is the lowest jobs numbers since December 2020. The impact reflected a decline of 44,000 jobs in transport equipment manufacturing activity due to the Boeing strike. There was little or no growth in employment in other major industries which should have compensated for the weakness.  

Also, on Friday, the Institute for Supply Management’s gauge of manufacturing activity had unexpectedly dropped to 46.5. This is the seventh straight monthly decline and the lowest level in 15 months.  According to the Institute, “Demand remained subdued as companies continue to show an unwillingness to invest in capital and inventory due to concerns about federal monetary policy direction in light of the fiscal policies proposed by both major parties.”

The softening of the macroeconomic data nevertheless signifies that the Federal Reserve is still on track to lower interest rates in both November and December this year. The economy that remains resilient combined with lower rates has historically favored financial markets broadly.

Metals and Mining

There is no doubt that precious metals saw significant momentum over the past month due to the volatile environment leading to the election. In the weeks leading up to November, the risk uncertainty continued to rise regarding anticipation about which political party would gain control over the White House and the two chambers of Congress. However, while the gold market is overdue for a correction, the fear of missing out, or FOMO, is growing in the marketplace as analysts note that dips are being aggressively bought up and surprising any remaining bears in the market. Gold has managed to hold support at every major breakout level in this step-by-step rally since July. In August it held support at $2,400, in September at $2,500, and in October at  $2,600. As the U.S. economy and labor market slow, Gold continues to be well supported.

The spot prices of precious metals lost ground over the week. Gold, previously at $2,747.56, closed this week at $2,736.53 per troy ounce for a drop of 0.40%. Silver closed at $33.72 one week ago, and ended this week at $32.49 per troy ounce for a loss of 3.65%.  Platinum, which closed at $1,025.29 one week ago, closed this week at $996.08 per troy ounce, for a loss of 2.85%. Palladium, with a closing price last week of 1,196.50, settled at $1,104.60 per troy ounce this week, losing 7.68% from last week. The three-month LME prices of industrial metals also generally fell with few exceptions. Copper began at $9,602.50 last week and fell by 0.33% to end at $9,570.50 per metric ton. Aluminum lost 2.89% from its close last week at $2,677.50 to end this week at $2,600.00 per metric ton. Zinc dropped by 1.05% from its ending price last week at $3,102.00 to close this week at $3,069.50 per metric ton. Tin, on the other hand, rose by 1.27% from its close last week at $31,325.00 to finish the week at $31,724.00 per metric ton.

Energy and Oil

Iran reemerged as the main talking point of the markets no sooner had OPEC+ depressed market sentiment by admitting a potential rollover of its cuts in 2025. Due to concerns about soft oil demand at the heels of China’s slowdown and rising non-OPEC supply, OPEC+ could postpone its planned increase in oil production. This move could bring back the 2.2 million barrels per day (b/d) output under eight countries’ voluntary cuts. Regarding geopolitical developments, the oil markets are now anticipating an Iranian attack on Israel, after the Israeli retaliatory strike had been downplayed. Iran is expected to respond with numerous drones from Iraqi territory. As a result, ICE Brent futures were lifted back to $74-$75 per barrel by a semblance of geopolitical risk premium, ahead of a highly uncertain week when the U.S. president is elected.

Natural Gas

For the report week from Wednesday, October 23, to Wednesday, October 30, 2024, the Henry Hub spot price rose by $0.03 from $1.91 per million British thermal units (MMBtu) at the start of the week to $1.94/MMBtu at the week’s end. Regarding Henry Hub futures, the November NYMEX contract expired on Tuesday at $2.346/MMBtu, up modestly from the previous Wednesday. The December 2024 NYMEX contract price decreased to $2.845/MMBtu, down by $0.06 over the report week. The price of the 12-month strip averaging December 2024 through November 2025 futures contracts declined by $0.03 to $3.038/MMBtu. Regional natural gas spot price changes were mixed this report week. Price changes ranged from a decrease of $0.12 at Eastern Gas South to an increase of $1.63 at PG&E Citygate.

International natural gas futures prices rose this report week. Weekly average front-month futures prices for liquefied natural gas (LNG) cargoes in East Asia increased by $0.25 to a weekly average of $13.70/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 $0.70 to a weekly average of $13.45/MMBtu. In the week last year that corresponds to this report week (beginning October 25 and ending November 1, 2023), the prices were $17.82/MMBtu in East Asia and $15.36/MMBtu at the TTF.     

World Markets

European stocks lost ground in trading this week. The pan-European STOXX Europe 600 closed 1.52% lower in local currency terms, due to concerns regarding the potential for escalating conflict in the Middle East, poor corporate results for some companies, and moderating expectations for the European Central Bank (ECB) to further cut interest rates. The major stock indexes in the region also suffered from sell-offs. Italy’s FTSE MIB plummeted by 1.42%, France’s CAC 40 Index sank by 1.18%, and Germany’s DAX lost by 1.07%. The UK’s FTSE 100 Index slid by 0.29%. In the third quarter, the eurozone economy expanded by 0.4% sequentially. Encouragingly, this exceeds the consensus estimate of 0.2% and is double the second-quarter growth rate. France and Spain reported stronger-than-expected economic growth. So did Germany which unexpectedly avoided a recession and grew by 0.2%. However, Italy’s economy stalled. Meanwhile, as the decline in energy prices last year dropped out of the annual comparison, the annual headline inflation accelerated slightly faster than forecast to 2% in October from 1.7% in September. The core rate (excluding energy, food, alcohol, and tobacco prices) remained unchanged at 2.7%. Services inflation also remained constant at 3.9%.

Japan’s stock market climbed over the week. The Nikkei 225 Index gained by 0.4% and the broader TOPIX index advanced by 1.0% as the Bank of Japan (BoJ) kept interest rates steady amid political uncertainty. In the country’s lower house election on Sunday, October 27, Japan’s ruling Liberal Democratic Party (LDP)-Komeito coalition failed to secure a majority, as the opposition capitalized on public discontent with the higher cost of living and the LDP corruption scandal. In an effort to maintain control of the lower house, Prime Minister Shigeru Isheba faces the prospect of a minority government as it sought the support of smaller parties. Initially, the yen weakened against the U.S. dollar on the outcome of the election on expectations that a period of political uncertainty would follow and potentially impact the BoJ’s monetary policy and future fiscal policy. The BoJ held its policy rate steady at 0.25% at its October meeting, aligning with expectations. By the end of the week, the yen traded within the JPY 152 range against the greenback, virtually unchanged. In the central bank’s view, the economic risks in the U.S. had broadly diminished which the market has taken to suggest that conditions could be aligning for another rate hike. Market participants are divided on whether this would come as early as December of this year or January of next year.

Chinese equities pulled back this week despite data showing that economic activity had begun to pick up. The Shanghai Composite Index lost 0.84%, while the blue-chip CSI 300 declined by 1.68%. The Hong Kong benchmark Hang Seng Index gave up 0.41%.  The country’s factory activity grew for the first time since April due to growing demand. According to the statistics office, the official manufacturing purchasing managers’ index (PMI) rose from 49.8 in September to an above-consensus 50.1 In October, moving from contraction to expansion. The nonmanufacturing PMI, which is the gauge for construction and services activity, rose to a lower-than-expected 50.2 in October from 50 in September. Increased spending during the country’s Golden Week holiday partly accounts for the rise in services activity. On the other hand, the private Caixin/S&P Global survey of manufacturing activity advanced from 49.3 in September to 50.3 in October amid new order growth. Regarding the property sector, the value of new home sales by the country’s top 100 developers rose by 7.1% in October year-on-year compared to September’s decline of 37.3%. According to the China Real Estate Information Corporation, this marks the first year-on-year growth in 2024. Overall, the first batch of major economic indicators after the rollout of Beijing’s stimulus package point to early signs of recovery in the Chinese economy.

The Week Ahead

In the coming week, look forward to important events including the U.S. presidential election, the FOMC meeting, and the release of the preliminary report on U.S. productivity for the third quarter.

Key Topics to Watch

• Factory orders for Sept.
• U.S. trade deficit for Sept.
• ISM services for Oct.
• S&P final U.S. services PMI for Oct.
• Initial jobless claims for Nov. 2
• U.S. productivity (prelim) for Q3
• Wholesale inventories for Sept.
• FOMC interest-rate decision
• Fed Chair Powell press conference (Nov. 7)
• Consumer credit for Sept.
• Consumer sentiment (prelim) for Nov.

Markets Index Wrap-Up

Stock Markets

The bull market continues as major indices rose through this week. The 30-stock Dow Jones Industrial Average (DJIA) added 1.21% while the Total Stock Market Index gained 1.17%. The broad S&P 500 likewise climbed by 1.11% and the technology-heavy Nasdaq Stock Market Composite rose by 1.13%. The NYSE Composite inched up by 0.88% and the Russell 1000, 2000, and 3,000 all ended higher for the week. The CBOE Volatility Index, the indicator of investor risk perception, rose by 6.51%.

This past week marks the two-year anniversary of the present bull market during which time stocks gained around 60%.  Historically, returns tend to moderate as bull markets make it to the end of the third year. This may likewise happen with this bull market since fundamental conditions remain strong but are tending to slow down. The Federal Reserve is expected to continue with its easing campaign even though September inflation came in slightly hotter than expected. It is more likely that quarter-point rate cuts will be decided on at each meeting until the Fed policy approaches 3% 5o 3.5%. However, earnings will have to push any future market gains since valuation have limited room to increase further. Signs of earnings broadening are expected to become evident as the third quarter season kicks off.

U.S. Economy

There has been several disappointing economic news over the weekend. The Labor Department reported on Thursday some modest some upside movements in headline and core (excluding food and energy) inflation which rose in September by 0.2% and 0.3% respectively, both slightly above expectations. Core prices rose by 3.3% year-over-year in September compared to 3.2% in August, the first increase since March 2023. Medical care (up 0.7%) and transportation (up 1.4%) services registered sharp increases in their seasonally-adjusted prices, which offset a 1.9% drop in energy prices.

The Labor Department also reported on Thursday a surprise jump in weekly jobless claims to its highest level in 14 months at 258,000. Partly to blame were disruptions by Hurricane Helene, however, Michigan also recorded substantial job losses. Continuing claims also rose to 1.86 million, their highest level since late July. This may have influenced the University of Michigan’s preliminary gauge of consumer sentiment in October which declined unexpectedly as respondents to the survey expressed greater caution about their personal finances.

The surprise increase in consumer inflation led to a significant change in expectations about the Fed’s next policy meeting in November. The futures market ended the week pricing in a respectable 14.1% likelihood that the Fed will hold rates steady. Minutes from the Fed’s October meeting, which were released on Wednesday, likewise revealed that some members favored on a 25-basis-point rate cut, compared to a 50-basis-point cut.

Metals and Mining

Gold’s price action continues to remain bullish despite being mostly ignored by generalist investors. Shallow corrections are consistently bought resulting in the yellow metal continuing to defy the odds. According to analysts, gold investors are justified in taking profits as expectations around the monetary policy actions of the Federal Reserve continue to vacillate. Last Friday, the market’s expectation of a 50-basis-point cut next month was dramatically doused by a stellar jobs report. This week, it was reported that consumer inflation rose more than expected as the core Consumer Price Index increased by 3.2% year-on-year, causing monetary policy doves to take another hit. Despite the hawkish news, analysts have noted that the gold market is delinking from single monetary policy decisions and growing much bigger. While a 50-basis-point but remains out of the question, it is evident the Fed will continue to ease interest rates even if the inflation rate remains high.

The spot prices of precious metals ended mixed week-on-week. Gold rose by 0.11% from last week’s close at $2,653.60 to this week’s close at $2,656.59 per troy ounce.  Silver ended 2.05% lower from its last traded price of $32.20 one week ago to its last traded price this week at $31.54 per troy ounce. Platinum lost 0.48% from its close last week at $992.55 to its close this week at $987.76 per troy ounce. Palladium surged by 5.73% from its ending price last week at $1,013.11 to its ending price this week at $1,071.21. The three-month LME prices of base metals have mostly come down. Copper, which closed last week at $9,866.00, ended this week at $9,723.00 per metric ton for a loss of 1.45%.  Aluminum, which ended at $2,629.00 the prior week, ended this week at $2,586.00 per metric ton for a decline of 1.64%.  Zinc settled this week at $3,086.50 per metric ton, 1.20% lower than last week’s closing price of $3,124.00. Tin closed this week at $32,817.00 per metric ton, 2.65% below last week’s close at $33,709.00.     

Energy and Oil

Brent futures were nudged lower by some of the disappointment that an Israeli retaliatory strike on Iran, which the market anticipated all week, failed to materialize. Brent futures settled this week just below the $79-per-barrel mark. The oil-related impacts of Hurricane Milton were relatively minor despite the devastation the storm wreaked on Florida. Macroeconomics played a more robust role in influencing prices this week, particularly on the back of U.S. inflation dipping to an annual rate of 2.4%.  In other parts of the world, A UK oil major signaled a $500 million decline in refining margins and a weak performance from oil trading into its third-quarter earnings. Its rival company Shell quantified the decline in refining margins at 30% quarter-on-quarter, down to $5.5 per barrel compared to $7.7 per barrel in the second quarter.

Natural Gas

For the report week from Wednesday, October 2, to Wednesday, October 9, 2024, the Henry Hub spot price fell by $0.34, from $2.76 per million British thermal units (MMBtu) to $2.42/MMBtu. Regarding Henry Hub futures, the price of the November 2024 NYMEX contract decreased by $0.23, from $2.886/MMBtu at the start of the report week to $2.660/MMBtu by the week’s end. The price of the 12-month strip averaging November 2024 through October 2025 futures contracts declined by $0.12 to $3.130/MMBtu.

Concerning regional markets, natural gas spot price changes were mixed this report week. Prices rose in the Northeast but fell in most other major pricing locations. Price changes ranged from a decrease of $2.64 at the Wahu Hub to an increase of $0.48 at Algonquin Citygate.

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 decreased by $0.06 to a weekly average of $13.10/MMBtu. Natural gas futures for delivery at the Title Transfer Facility (TTF) in the Netherlands increased by $0.20 to a weekly average of $12.78/MMBtu. In the week last year that corresponds to this report week (from October 4 to October 11, 2023) the prices were $14.18/MMBtu in East Asia and $13.28/MMBtu at the TTF. 

World Markets

European equities were up, albeit modestly, for the week as the pan-European STOXX Europe 600 Index closed 0/66%. The market continued to hope that the European Central Bank (ECB) would proceed more quickly to cut interest rates and that China is set to enhance its economic stimulus, The major continental stock indexes were elevated as Italy’s FTSE MIB added 2.13%, Germany’s DAX rose by 1.32%, and France’s CAC 40 Index gained by 0.48%. However, the UK’s FTSE 100 Index lost by 0.33%. More ECB officials foresee that inflation may slow closer to the 2% target by the end of 2024, as indicated in the minutes from the September meeting. If incoming inflation data points align with the ECB’s projections, the central bank noted that a gradual reduction of borrowing costs would be appropriate. Nevertheless, policymakers refuse to commit to a particular rate path, although based on recent comments from ECB officials, they appeared to align with the market’s view that the pace of policy easing could quicken if inflation slows and the economy weakens. 

Japanese stock indexes climbed over the week. The Nikkei 225 rose by 2.45% while the broader TOPIX Index gained by 0.45%, largely due to the weakness in the yen that provided a favorable profit outlook for Japanese exporters. The exchange rate floated close to its lowest level since August at about the high JPY 148 level against the US dollar. Earlier this month, the new prime minister, Shigeru Ishiba, brought the yen came under pressure when he cautioned that the environment is not ready for another interest rate hike. The 10-year Japanese government bond (JGB) yields rose in tandem with U.S. Treasury yields. Investors’ expectations around the likelihood of another aggressive (50-basis-point) rate cut by the Federal Reserve in November moderated. From 0.87% at the end of the prior week, the yield on the 10-year JGB rose to 0.94%.  Regarding its economy, Japan’s real wages (wages adjusted for inflation) fell by 0.6% year-on-year in August. The first decline in three months was brought about partly due to the diminishing impact of higher bonuses paid in the preceding two months. However, since the positive cycle wherein rising wages boost consumer spending has not yet come about, the sluggishness in the pay trend could lend some support to the view that the Bank of Japan (BoJ) may avoid raising interest rates again anytime soon. While the August household spending declined by 1.9% year-on-year, the drop was less than the consensus forecast of 2.6%.

During the holiday-shortened week, Chinese equities fell as optimism about the most recent stimulus measure faded. The Shanghai Composite Index lost by 3.56% and the blue-chip CSI 300 shed 3.25%. The Hong Kong benchmark Hang Seng Index gave up 6.53%. The markets in the mainland were closed on Monday for the National Day holiday that started on Tuesday, October 1.  At a press conference on Tuesday, the country’s economic planning agency, the National Development and Reform Commission, announced that China would speed up countercyclical measures to support growth. The announcement reiterated for the most part plans to boost investment and increase direct support to low-income groups and fresh graduates. Towards this end, the central government will continue ultra-long special bonds in 2025 for the purpose of funding major projects. Officials stated that Beijing will invest RMB 100 billion in strategic areas. In the meantime, over the long holiday that ended on Monday, spending by Chinese consumers failed to rise to pre-pandemic levels. Spending increased by 6.3% year-on-year while passenger traffic rose by 5.9%. Box office sales amounted to RMB 2.1 billion, lower than the RMB 2.7 billion reported last year. However, the average spending per trip was roughly RMB 131, which was higher than the RMB 113 recorded during the five-day Labor Day in May.

The Week Ahead

The CPI inflation data, import price index data, and an analysis of consumer sentiment are among the important economic releases this coming week.

Key Topics to Watch

• Columbus Day holiday. Bond market closed. (October 14)
• Federal Reserve Governor Christopher Waller speaks (October 14)
• Empire State manufacturing survey for Oct.
• Fed Governor Adriana Kugler speaks (October 15) 
• Import price index for Sept.
• Import price index minus fuel for Sept.
• Initial jobless claims for Oct. 12
• S. retail sales for Sept.
• Retail sales minus autos for Sept.
• Industrial production for Sept.
• Capacity utilization for Sept.
• Business inventories for Aug.
• Home builder confidence index for Oct.
• Housing starts for Sept.
• Building permits for Sept.
• Federal Reserve Governor Christopher Waller speaks (October 18)

Markets Index Wrap-Up

Stock Markets

Stocks hit new record highs this week on the back of optimism about the Federal Reserve’s recent rate cut, ongoing enthusiasm about AI, and new stimulus measures adopted by China that may spur hopes for a rebound in that country’s demand. All major stock market indexes were up week-on-week. The 30-stock Dow Jones Industrial Average (DJIA) inched up by 0.59%, mimicking the Total Stock Market Index’s 0.59% rise. The broad-based S&P 500 Index gained 0.62% while the technology-heavy Nasdaq Stock Market Composite Index climbed by 0.95%. The NYSE Composite Index added 0.66% this week. The investor risk perception indicator, the CBOE Volatility Index (VIX) rose by 5.02%.

Technology stocks outperformed on the back of reports of a possible takeover of Intel and news that the CEO of NVIDIA had halted sales of his own shares in the company. Additionally, chip maker Micron Technology surged following its positive outlook for artificial intelligence demand, thereby providing a general tailwind for the sector. Sentiment was also driven in part by economic news. On Tuesday, there was a slight sell-off as news that the Conference Board’s index of U. S. consumer confidence fell sharply in August and put it back close to the bottom of its range over the past two years.  

U.S. Economy

This week, it was reported that the index of consumers’ perception of labor market conditions slid to 81.7, only slightly above the threshold of 80 that historically had predicted a recession. There was also some mixed news regarding the housing sector. There have been some recent signals that the sector may be stabilizing as mortgage rates start to descend. On Wednesday, the Commerce Department reported that new home sales declined, although not as much as expected, by 4.7% in August, and building permits data were revised lower. New buyers remained on the sidelines, but the falling mortgage rates appeared to spark a surge in refinancing. Shortly after the Fed started to raise short-term rates, the Mortgage Bankers Association Mortgage Refinance Index jumped to its highest level since April 2022.

On Friday, some benign inflation data helped trigger an early rally in the markets. The Commerce Department reported that the core personal consumer expenditures (PCE) price index (less food and energy), which is the Fed’s preferred inflation gauge, rose by only 0.1% in August, slightly below expectations. The index climbed only 2.2% year-on-year, close to the Fed’s 2.0% long-term inflation target and the lowest since February 2021. Personal incomes and spending in August were both lower than expected, which further signals a moderation in inflationary pressures.

Metals and Mining

Although September has traditionally been a trying time for metals, This week’s trading appears to have broken the trend. The spot prices for precious metals generally went up this week. Gold closed at $2,658.24 per troy ounce, 1.39% higher than the previous weekly close of $2,621.88. Silver settled at $31.57 per troy ounce for the week, higher by 1.25% from the last weekly close at $31.18. Platinum closed this week at $1,003.82 per troy ounce for a gain of 2.49% over last week’s close at $979.43. Palladium ended at $1,016.12 per troy ounce for a decline of 4.95% from last week’s $1,069.01. The three-month LME prices of industrial metals were also mostly up. Copper closed the week at $9,982.50 per metric ton, 5.34% above the last weekly close of $9,476.50. Aluminum rested this week at $2,646.50 for an increase of 6.50% from last week’s close of $2,485.00. Zinc ended at the week’s closing price of $3,089.50 per metric ton, 7.50% higher than last week’s close of $2,874.00. Tin ended the week at $2,913.00, 2.45% higher than the metal’s previous weekly closing price of $32,127.00.

 Gold underwent its best monthly gain since March, and while it has drawn much attention from investors, other metals appear to present great prospects. Silver ended this week with some strong selling momentum despite exhibiting some volatility over the past weeks. It rallied to a new 12-year high at $33 per ounce. December silver futures last traded at $31.74 per ounce, down by almost 2% on the day, but up 8.8% for the month. Silver saw renewed buying interest after China launched its most impressive stimulus package since the COVID-19 pandemic. Beijing is pumping more liquidity into the financial markets and has also cut interest rates to prevent its economy from lapsing into a deflationary spiral and pull it back toward its growth target. Almost 50% of the demand for silver comes from industrial applications, mostly from the solar power sector. So far this year, gold prices have ascended by 28.8% while silver prices have rallied by nearly 32%.

Energy and Oil

Firm fundamental support for oil prices has been provided so far by China’s economic stimulus measures and U.S. hurricanes, but the big story this week came from Saudi Arabia. Media outlets alleged that Riyadh is considering a strategy shift to retake its market share in the oil market. According to the Financial Times, Saudi Arabia is adopting measures to raise its crude oil production in a bid to win back market share. It will allegedly abandon its unofficial $100 per barrel oil price target despite the likelihood of lower prices and has raised hopes that OPEC+ would proceed with its December hikes. Market observers witnessed a $3 per barrel drop from one week ago in fear of an oversupply, with WTI dropping below $70 per barrel again.

Natural Gas

For the report week covering Wednesday, September 18, to Wednesday, September 25, 2024, the Henry Hub spot prices rose by $0.29 from $2.33 per million British thermal units (MMBtu) to $2.62/MMBtu.  Regarding Henry Hub futures, the price of the October 2024 NYMEX contract increased by $0.353, from $2.284/MMBtu at the start of the week to $2.637/MMBtu at the week’s end. The price of the 12-month strip averaging October 2024 through September 2025 futures contracts advanced by $0.191 to $3.134/MMBtu. At most locations this report week, natural gas spot prices rose. Price changes ranged from a drop of $0.59 at the Waha Hub to an increase of $0.54 at the FGT Citygate in Florida.

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 decreased by $0.37 to a weekly average of $13.03/MMBtu. Natural gas futures for delivery at the Title Transfer Facility (TTF) in the Netherlands increased by $0.10 to a weekly average of $11.54/MMBtu. In the week last year corresponding to this report week (the week from September 20 to September 27, 2023) the prices were $14.63/MMBtu in East Asia and $12.61 /MMBtu at the TTF.

World Markets

Evidence of slowing business activity spurred hopes for potential interest rate cuts and drove European equities to rally for the week. The pan-European STOXX Europe 600 Index rebounded this week and settled 2.69% higher. Sentiment also lifted as a result of China’s newly launched round of stimulation measures that can energize the global economy. Major stock indexes also rebounded. Italy’s FTSE MIB rose by 2.86%, France’s CAC 40 Index gained 3.89%, and Germany’s DAX surged by 4.03%. The UK’s FTSE Index added 1.10%. According to purchasing managers’ indexes (PMIs) compiled by S&P Global, business activity in the eurozone shrank unexpectedly in September as a result of a significant flow of new orders. An initial reading of the seasonally adjusted HCOB Eurozone Composite PMI Output Index fell from 51.0 in August to 48.9 in September, signifying a shift from expansion to contraction. As the boost from the Paris Olympics faded, services activity came close to stalling. German business activity declined the most in seven months, signaling that a second quarterly drop in output is likely in the outlook of the economy. UK private sector activity, on the other hand, remained in expansionary territory for the 11^th consecutive month.

Japan’s stock markets soared over the week. The Nikkei 225 Index surged by 5.6% while the broader TOPIX Index rose by 3.7%. Providing a favorable backdrop was the latest commentary from the Bank of Japan (BoJ) that was perceived as dovish and which weighed on the yen. China’s fresh round of stimulus announcements that detailed various support mechanisms drove optimism that the country will better respond to sluggish economic growth and the weak housing market. The stimulus announcements boosted the many Japanese companies that directly or indirectly China beneficiaries, given the large volume of Japanese exports that go to China and Japan’s sensitivity to the Chinese purchasing managers’ index. Regarding Japan’s economic front, the Tokyo-area core consumer price index (CPI) rose by 2.0% year-on-year in September, down from 2.4% in August. Given that the indicator is considered a leading indicator of nationwide trends, there is a slowdown in consumer inflation, although this was expected and largely attributable to the effect of renewed energy subsidies. Separately, flash PMI data collated by an Jibun Bank showed that Japan’s private sector continued to expand in September albeit the rate of growth has slowed slightly from August. The driver of the expansion was business activity in the services segment, while manufacturing output contracted marginally.

China’s stocks skyrocketed after Beijing set into motion a host of measures to shore up the economy. The Shanghai Composite Index jumped 12.8% while the blue-chip CSI 300 soared by 15.7%. Hong Kong’s benchmark Hang Seng Index gained 13%. The rally charted the biggest weekly for the CSI 300 since 2008. At that time, Beijing put into effect a massive stimulus package to address the global financial crisis. To meet the present economic challenges, China’s top leaders committed to take action to stabilize the property market and halt the decline of real estate prices. The 24-man Politburo stated that China would deploy the necessary fiscal spending to meet its 2024 growth target of 5%. Although there were no specifics contained in the Politburo statement, China plans to issue special sovereign bonds worth about RMB 2 trillion (USD 284.4 billion) this year as part of the financial stimulus plan, plus other measures. All in all, the stimulus package is a positive development for China’s economy and will bolster short-term economic activity and enhance market sentiment. In the long term, however, it is not certain that the present steps taken will be sustainable in the long run.

The Week Ahead

Among the important economic data scheduled for release this week are the September non-farm payrolls report, the ISM manufacturing PMI, and the ISM services PMI all for September.

Key Topics to Watch

• Federal Reserve Governor Michelle Bowman speaks (Sept. 30)
• Chicago Business Barometer (PMI) for Sept.
• Federal Reserve Chair Jerome Powell speaks (Sept. 30)
• S&P final U.S. manufacturing PMI for Sept.
• ISM manufacturing for Sept.
• Construction spending for Aug.
• Job openings for Aug.
• Federal Reserve Governor Lisa Cook speaks (Oct. 1)
• Richmond Fed President Tom Barkin, Atlanta Fed President Raphael Bostic and Boston Fed President Susan Collins on a joint panel about technology-enabled disruption (Oct. 1)
• Auto sales for Sept.
• ADP employment for Sept.
• Cleveland Fed President Beth Hammack gives welcoming remarks (Oct. 2)
• Louis Fed President Alberto Musalem gives opening remarks (Oct. 2)
• Federal Reserve Governor Michelle Bowman speaks (Oct. 2)
• Richmond Fed President Tom Barkin speaks (Oct.2)
• Initial jobless claims for Sept. 28
• S&P final U.S. services PMI for Sept.
• ISM services for Sept.
• Factory orders for Aug.
• Minneapolis Fed President Neel Kashkari moderates discussion with Atlanta Fed President Raphael Bostic (Oct. 3)
• U.S. nonfarm payroll for Sept.
• U.S. unemployment rate for Sept.
• U.S. hourly wages for Sept.
• Hourly wages year over year 
• New York Fed President John Williams gives opening remarks (Oct. 4)

Markets Index Wrap-Up