In Markets "In a Nutshell"

Markets “In a Nutshell” for November 4, 2024

Investment Week at a Glance

Stocks finished lower for the week. The Dow Jones Industrial Average fell 0.1%, the S&P 500 was down 1.4%, and the NASDAQ fell 1.5%. Foreign stocks (MSCI EAFE) were also down, falling 1.2%. Bond prices were down for the week, with the 10-year U.S. Treasury ending the week at 4.38%.  (Data source: Wall Street Journal)

Earnings Strong, Guidance Has Been Cautious

Earnings season is in full force as many mega-cap names released earnings last week. Overall, many companies have beaten earnings expectations, but they are being cautious about forecasting for the future. This has caused some worry in the markets as analysts were expecting better guidance than what these companies are giving. The good news is that current earnings have been strong with 70% of the S&P 500 reporting so far and an increase of 5% earnings growth compared to the 4% expectation. 2025 earnings growth for the S&P 500 is expected to increase to nearly 15% as the market expects the Fed to continue to cut rates, helping grow corporate profits. Despite all the market headlines, earnings are what drive the market and can either lead the market higher or lower depending on these quarterly reports.

October Jobs Data

The October jobs report was released last week, and new jobs came in much lower than expected at 12,000. The last two months were also revised lower by a total of 112,000. The weakness was attributed to labor strikes at Boeing and the impact of Hurricanes Helene and Milton. The market did not move much on this report, but it will be something to keep an eye on going forward. The labor market has continued to show signs of cooling off, but many are not worried about substantial unemployment in the near future.

China Stimulus Package and the U.S. Election

China is expected to approve a $1.4 trillion debt offering next week as the Chinese economy and real estate market have shown weakness. Reports from China say that they are waiting to see the outcome of the U.S. election and that if Trump wins the package could increase between 10%-20% to offset possible tariffs by a Trump administration. This stimulus aims to focus on liquidity issues, boost the real estate market, and stabilize financial markets. The Shanghai Stock Exchange Index has trailed the NYSE index by nearly 20% in the past 12 months and 30% in the past 5 years. China is hopeful that this stimulus package will be able to boost the economy and markets to outperform the United States in the coming years.

Quiz:

What is the current unemployment rate? (Scroll Down for Answer)

  1.    3.7%
  2.    4.1%
  3.    4.3%
  4.    4.7%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Answer below.

 

 

Have a Great Week!

 

 

 

 

 

 

 

 

 

 

 

Answer:

2.  4.1%. Despite the weak jobs number, unemployment remained at 4.1%. This was due to people leaving the workforce and therefore not increasing the unemployment rate.

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