The major indices stumbled through a challenging week. The S&P 500 dropped 1.4%, while the Nasdaq Composite slid 1.5%. The Dow Jones showed more resilience with just a 0.2% decline. Only the Russell 2000 managed to keep its head above water, inching up 0.1%.
Tech earnings painted a mixed picture. Alphabet and Amazon delivered solid performances, climbing 3.4% and 5.4%, respectively. However, the tech trinity of Apple, Meta, and Microsoft all closed lower. Speaking of tech, semiconductor stocks took quite a beating – AMD’s 9.2% drop after soft guidance sent ripples through the sector.
All eyes will be on the election this week, which, based on the polls and what I am hearing from people, President Trump should win. In my community, which is split 70/30 in Florida, there are many Trump signs, not one Harris sign. My brother’s community in Michigan is politically split 50/50, and he is seeing 10 Trump signs and 1 Harris. We may not know the winner as fast as in the past due to lawsuits.
US Market Highlights
The labor market’s giving us some fascinating signals. October’s job numbers came in at a surprisingly low 12,000 – and yes, you read that right. Having analyzed countless jobs reports over my career, I can tell you this one’s particularly interesting. The Boeing strike and hurricane disruptions played their part, but there’s more to this story.
Based on last week’s market activity, Treasury yields experienced a notable upward movement. The 10-year Treasury yield made a significant jump of 13 basis points, settling at 4.36% In parallel, the 2-year Treasury yield increased by ten basis points to close at 4.20%
Here’s what caught my attention:
• GDP growth cooled to 2.8% in Q3
• Job openings hit their lowest point since January 2021
• The Fed’s preferred inflation gauge sits at 2.1%
Did you know? Historically, when job openings decline by more than 20% year-over-year, it’s preceded a recession 85% of the time. But before you hit that panic button, remember markets often climb walls of worry.
Global Highlights
The international scene is serving up some intriguing developments. China’s economy is finally showing signs of life, with manufacturing activity expanding for the first time in six months. Meanwhile, the Eurozone surprised us with a 0.4% growth in Q3.
The Bank of Japan is playing it cool, keeping rates steady at 0.25%. However, December might bring some fireworks between you and me. And speaking of surprises, Xiaomi’s EV venture is turning heads with 20,000 deliveries last month.
Commodities & Crypto Corner
Oil markets remind me of a poker game where everyone’s waiting for someone else to make the first move. Brent and WTI are hovering around $74.40 and $70.50 respectively. The OPEC+ meeting next month should be interesting – I’ve seen enough of these to know they rarely disappoint in terms of market impact.
Gold keeps climbing steadily, now around $2,720. After 20 years in the markets, I’ve learned that when gold moves like this, it’s worth paying attention.
Bitcoin is doing what Bitcoin does best – keeping us guessing. At $68,000, it’s flirting with all-time highs. The growing institutional adoption through ETFs is something I wouldn’t have believed possible a decade ago.
Calendar
Next week’s going to be a doozy. We’ve got the presidential election on Tuesday – Harris versus Trump in what’s shaping up to be a nail-biter. As mentioned before, I think Trump should win which will be positive for the markets.
The Fed meeting follows on Wednesday, and I’m expecting a 25-basis-point cut.
Keep an eye on earnings from Palantir, Yum! Brands, Arm, and Qualcomm. These reports often tell us more about the economy than any Fed statement.
In my decades of market watching, weeks like the upcoming one often define market sentiment for months to come. Stay nimble, stay informed, and remember – the best investment decisions are rarely made in reaction to headlines.
