Weekly Market Update | Week 45, 2024


Markets surged last week after a quick election outcome. The Trump election victory sparked a big rally across risk assets, with small caps having the largest move after an election that we’ve seen since the inception of Russell 2000 in 1978, up over 8% for the week. The S&P 500 ended the week just shy of 6000 closing up over 4.5%.   

The Fed also met last week, voting to cut 25 bp, as expected, to 4.5-4.75% in a unanimous decision. The policy statement was little changed. While there was some focus on the deletion of statement that the Committee has gained confidence that inflation is moving sustainably toward the 2% target, Powell played down the changes as any sort of policy signal. In the press conference, Powell deferred comment on potential Trump administration policies. Powell also said that economic activity has been stronger than expected, and the Fed will have to wait to see where data lead ahead of the December rate decision. Markets are now pricing an 30% chance of a pause in December, unchanged from pre-rate decision, but up from 17% a week ago. Following Tuesday’s election, the market is now pricing in just two 25 bp cuts next year, down from four as recently as mid-October.

Treasuries sold off sharply following Trump’s election victory, which was tabbed to concerns around Trump tax/budget proposals, tariffs proposals, and immigration policy could all add upside inflationary risk, and raised concerns around bond vigilantes, higher term premiums, and that the new administration’s economic proposals could cause general economic overheating. However, Treasuries ended only slightly weaker on the short end and firmer on the long end amid thoughts that inflationary Trump policy measures might not be enacted as quickly as previously expected. Trump economic adviser (and potential Treasury Secretary) Scott Bessent recently said that Trump’s tariff pledges are a maximalist threat ahead of talks with trading partners and that tariffs would be layered in gradually, though trade hawk Lighthizer was asked to take job as US trade representative .

Last week’s dollar rally and stronger outlook have been cited as a bearish overhang. The DXY jumped by most in eight years Wednesday and is now back to mid-year levels. JPMorgan recently noted every 2% increase in dollar cuts 1% from S&P 500 earnings growth, while some analysts also noted tariffs could also support the dollar over the medium term by shrinking the trade deficit and potential leading to more hawkish Fed policy. Other pieces of the bearish narrative included an underwhelming China policy support announcement, potential for tariffs to dent resilient consumer spend, continuing claims the lowest in three years, ongoing geopolitical uncertainty, and demanding valuations.

A light week of data included Preliminary University of Michigan consumer sentiment, which beat and came in at the highest in six months. One-year inflation expectations ticked down 0.1pp to 2.6%, the lowest since Dec-20, though longer-run ticked up 0.1pp to 3.1%. October ISM Services also beat with the highest print since Jul-22. Both employment and deliveries accelerated and prices cooled, though new orders pulled back. Initial jobless claims were in line with consensus, though continuing claims of 1.892M were above consensus, and were the highest since Nov-21.

Data out this week includes October core CPI on Wednesday, which is expected to hold at 0.3% m/m and 3.3% y/y. October retail sales are also set for release Friday, with expectations for a slight 56 bp headline slowdown to 0.35% m/m, while control group sales are expected to decelerate to 0.3% m/m from last month’s 0.7%. Fedspeak next week include Governor Waller on Tuesday and Fed Chair Powell on Thursday.

Fixed Income

Yield Curve


September FOMC Statement 
  July Minutes   Credit, Liquidity and Balance Sheet    Federal Reserve Dot Plots  

Treasury.gov yields    FOMC Policy Normalization Statement     Longer- Run Goals Jan 2024

Foreign Exchange Market

Energy Complex

The Baker Hughes rig count  was flat last week. There are 585 oil and gas rigs operating in the US – Down 31 from last year.

Metals Complex  

Employment Picture  

Weekly Unemployment Claims – Released Thursday 11/7/2024 – In the week ending November 2, the advance figure for seasonally adjusted initial claims was 221,000, an increase of 3,000 from the previous week’s revised level. The 4-week moving average was 227,250 a decrease of 9,750 from the previous week’s revised average.

October Jobs Report – BLS Summary – Released 11/1/2024 – The US Economy added 12k nonfarm jobs in October and the Unemployment rate remained at 4.1%. Average hourly earnings increased 13 cents to $35.46.  Hiring highlights include +52k Healthcare, +40k Government, -49k Professional and Business Services, and -46k Manufacturing.

  • Average hourly earnings increased 13 cents/0.4% to $35.46.
  • U3 unemployment rate was unchanged at 4.1%. U6 unemployment rate was unchanged at 7.7%.
  • The labor force participation rate was relatively unchanged at 62.6%.
  • Average work week increased 0.1 to 34.3 hours.

Employment Cost Index – Released 10/31/2024 – Compensation costs for civilian workers increased 0.8% for the 3-month period ending in September 2024. Wages and salaries increased 0.8% and benefit costs increased 0.8% from June 2024. The 12-month period ending in September 2024 saw compensation costs increase by 3.9. The 12-month period ending September 2023 increased 4.3%. Wages and salaries increased 3.9 percent over the 12-month period ending in September 2024 and increased 4.6 percent for the 12-month period ending in September 2023. Benefit costs increased 3.7 percent over the 12-month period and increased 4.1 percent for the 12-month period ending in September 2023. This report is published quarterly

Job Openings & Labor Turnover Survey JOLTS – Released 10/29/2024 – The number of job openings was little changed at 7.4 million on the last business day of September, the U.S. Bureau of Labor Statistics reported. Over the month the number of hires and total separations was little changed at 5.6 million and 5.2 million, respectively. Within separations, quits (3.1 million) and discharges (1.8 million) changed little.

This Week’s Economic Data – Blue links take you to data source

Consumer Credit – Released 11/7/2024 – Consumer credit increased at a seasonally adjusted annual rate of 3.2 percent in the third quarter. Consumer credit increased at a seasonally adjusted annual rate of 1.4 percent in September. Revolving credit increased at an annual rate of 2.8 percent, while nonrevolving credit increased at an annual rate of 3.4 percent.

U.S. Trade Balance – Released 11/5/2024  –  The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced that the goods and services deficit was $84.4 billion in September, up $13.6 billion from $70.8 billion in August. September exports were $267.9 billion, $3.2 billion less than August exports. September imports were $352.3 billion, $10.3 billion less than August imports. The September increase in the goods and services deficit reflected a increase in the goods deficit of $14.2 billion to $109.0 billion and an increase in the services surplus of $0.6 billion to $24.6 billion.

PMI Non-Manufacturing Index – Released 11/5/2024 – Economic activity in the services sector expanded in October for the fourth consecutive month indicating expansion in eight of the ten months of 2024. The Services PMI® registered 56.0 percent, the highest reading since February 2023 and 1.1 percent higher than September’s reading of 54.9 percent.

Recent Economic Data – Blue Links bring you to data source

U.S. Construction Spending – Released 11/1/2024 – Construction spending during September 2024 was estimated at a seasonally adjusted annual rate of $2,148.8 billion, 0.1 percent above the revised August estimate of $2,146.0 billion. The September figure is 4.6 percent above the September 2023 estimate of $2,055.2 billion.

PMI Manufacturing Index – Released 11/1/2024 – The October Manufacturing PMI registered 46.5 percent, 0.7 percent lower Compared to September. This is the lowest Manufacturing PMI reading in 2024. The overall economy continued in expansion for the 54th month after one month of contraction in April 2020. The New Orders Index remained in contraction territory, registering 47.1 percent, 1 percentage point higher than the 46.1 percent recorded in September. The October reading of the Production Index (46.2 percent) is 3.6 percentage points lower than September’s figure of 49.8 percent.

US Light Vehicle Sales – Released 10/31/2024 – U.S. light vehicle sales were at a seasonally adjusted annual rate (SAAR) of 15.768 million units in September.

Chicago PMI – Released 10/31/2024 – Chicago PMI remained in contraction territory in October and fell to 41.6 from 46.6 points in September. The latest reading indicated that Chicago’s economic activity contracted for the 11th successive month in October, and at a solid pace, marking the steepest decline since May.

Personal Income – Released 10/31/2024 – Personal income increased $71.6 billion (0.3 percent at a monthly rate) in September. Disposable personal income (DPI)—personal income less personal current taxes—increased $57.4 billion (0.3 percent). Personal consumption expenditures (PCE) increased $105.8 billion (0.5 percent).

Advance Estimate of 3rd Quarter 2024 GDP – Released 10/30/2024 – Real gross domestic product (GDP) increased at an annual rate of 2.8 percent in the third quarter of 2024, according to the “advance” estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 3.0 percent. The GDP estimate released today is based on source data that are incomplete or subject to further revision. The increase in real GDP primarily reflected increases in consumer spending, exports, and federal government spending. Imports, which are a subtraction in the calculation of GDP, increased. Compared to the second quarter, the deceleration in real GDP in the third quarter primarily reflected a downturn in private inventory investment and a larger decrease in residential fixed investment. These movements were partly offset by accelerations in exports, consumer spending, and federal government spending. Imports accelerated.

Consumer Confidence – Released 10/29/2024 – Consumer Confidence increased from 99.2 to 108.7 in October. The Expectations Index which is based on consumers’ short-term outlook for income, business, and labor market conditions, increased by 6.3 points to 89.1, well above the threshold of 80 that usually signals a recession ahead. In October’s reading, all five components of the Index improved. Consumers’ assessments of current business conditions turned positive. Views on the current availability of jobs rebounded after several months of weakness, potentially reflecting better labor market data. Compared to last month, consumers were substantially more optimistic about future business conditions and remained positive about future income.

Durable Goods – Released 10/25/2024 – New orders for manufactured durable goods in September, down three of the last four months, decreased $2.2 billion or 0.8% to $284.8 billion, the U.S. Census Bureau announced today. This followed a 0.8 percent August decrease. Excluding transportation, new orders increased 0.4 percent. Excluding defense, new orders decreased 1.1 percent. Transportation equipment, also down three of the last four months, drove the decrease, $3.1 billion or 3.1 percent to $95.4 billion. Shipments of manufactured durable goods in September, down two consecutive months, decreased $1.8 billion or 0.6 percent to $287.3 billion. This followed a 0.6 percent August decrease. Transportation equipment, also down two consecutive months, drove the decrease, $2.3 billion or 2.4 percent to $94.4 billion.

New Residential Sales – Released 10/24/2024 – Sales of new single‐family houses in September 2024 were at a seasonally adjusted annual rate of 738,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development.  This is 4.1 percent above the revised August rate of 709,000 and is 6.3 percent above the September 2023 estimate of 694,000. The median sales price of new houses sold in September 2024 was $426,300.  The average sales price was $501,000. 

Existing Home Sales – Released 10/23/2024 – Existing home sales in September decreased 1.0% from August and fell 3.5% year over year. Existing home sales decreased to 3.84 million in September seasonally adjusted. The median price of existing homes for sale increased to $404,500, up 3.0% from one year ago.

Housing Starts – Released 10/18/2024 – September housing starts came in at 1,354,000, 0.5% below the August estimate and is 0.7% above the September 2023 rate. Building permits were 2.9% below the August rate at $1,470,000 and is 5.7% below the September 2023 rate. 

Industrial Production and Capacity Utilization – Released 10/17/2024 – Industrial production decreased 0.3% in September after gaining 0.3% in August. Manufacturing decreased 0.4%. Utilities output increased 0.7%. Mining decreased 0.6%. For the third quarter, industrial production declined at an annual rate of 0.6%.Total industrial production in September was 0.6% below its year-earlier level. Capacity utilization decreased to 77.5% in September, a rate that is 2.2% below its long-run average.

Retail Sales – Released 10/17/2024 – Headline retail sales were up 0.4% in September and are up 1.7% above September 2023.

Producer Price Index – Released 10/11/2024 – The Producer Price Index for final demand was unchanged in September, seasonally adjusted. Final demand was unchanged in August and July. On an unadjusted basis, the index for final demand moved up 1.8 percent for the 12 months ended in September.

Consumer Price Index – Released 10/10/2024 – The Consumer Price Index for All Urban Consumers increased 0.2% in September on a seasonally adjusted basis, after increasing 0.2% in August and 0.2% in July. Over the last 12 months, the all items index increased 2.4 percent before seasonal adjustment.

This week we get data on CPI, PPI, Retail Sales, Industrial Production and Capacity Utilization.

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Data Sources: 

Conference Board Economic Indicators   Bureau of Economic Analysis (BEA)   Congressional Budget Office (CBO)     U.S. Bureau of Labor Statistics (BLS)    Federal Reserve Economic Data (FRED Charts)

CME Fed Watch   U.S. Treasury – Yields   U.S. Census Bureau    Institute for Supply Management (ISM)    Weekly DOL Employment Data    BLS Monthly Jobs Report    JOLTS      All capital in one visualization 2020

US Energy Admn (EIA)   BLS Consumer Price Index CPI      BLS Producer Price Index PPIAtlanta Fed GDPNOW    NY Fed Nowcast GDP     US Census Bureau Housing Starts   U.S. Energy Admn

Consumer Credit  USCB Retail Sales   Construction Spending      Federal Reserve Dot Plots 2017   NY Empire Index    Philadelphia Federal Reserve   P/E Ratio Data -Yardeni Research

Technical Analysis Info: Koyfin.com  StockCharts.com – Financial Charts    Exponential vs Simple Moving Average

Other links: 1973 Arab Oil Embargo    Hunt Brothers Silver    Asian Contagion   Long-Term Capital bailout