What happened last week…
The three major indices finished October in the red: DJIA (-1.34%), S&P 500 (-0.99%), NASDAQ (-0.52%). Each index remains positive year-to-date: DJIA (11.58%), S&P 500 (20.10%), NASDAQ (21.51%).
The GDP growth rate (first estimate) for Q3 2024 landed below expectations (3.1%) as it slid to 2.8% from the Q2 2024 rate of 3.0%. The Q1 2024 rate of 1.6% was the lowest growth since the Covid pandemic.
The ADP employment change beat expectations (113,000) as it increased to 233,000 from the upwardly revised 159,000 (from 143,000). It is the highest reading since July 2023. The unemployment rate matched expectations as it remained at 4.1%. Nonfarm payrolls missed expectations (100,000) as it decreased to 12,000 from the downwardly revised 223,000 (from 254,000). It is the lowest reading since December 2020. Average hourly earnings month-over-month beat expectations (0.3%) as it increased to 0.4% from the downwardly revised 0.3% (from 0.4%).
The manufacturing PMI for October missed expectations (47.6) as it decreased to 46.5 from 47.2, which marked the seventh straight contractionary reading (below 50) and the 23rd contraction in the past 24 months. It is the lowest reading since July 2023.
According to FactSet, as of November 1, for Q3 2024, 70% of S&P 500 companies have reported earnings with 75% having a positive EPS surprise and 60% having a positive revenue surprise. The blendedearnings growth for the S&P 500 is 5.1%, which would be the fifth straight quarter of growth. The blended revenuegrowth for the index is 5.2%, which would be the 16th straight quarter of growth.
This week…
The following companies report earnings this week: PEG, PLTR, ZTS, MCHP, AEP.
Along with the presidential election on Tuesday, the non-manufacturing PMI for October is expected to decrease to 53.3 from 54.9, which was the highest reading since February 2023. The figure has expanded in 49 of the previous 52 months.
On Thursday, the Federal Open Market Committee will make its next interest rate decision. According to the CME FedWatch Tool, as of November 1, there is a 98.6% probability that interest rates will be reduced by 25 basis points. The current range is 4.75% to 5.00%.
Thanks for reading!
- The Rockline Team