Global markets saw a dynamic week as central banks and economic indicators painted a mixed picture. The Bank of Canada slashed rates by 50 basis points to support growth, while the Eurozone and UK reported ongoing struggles in manufacturing and services. In the US, robust service sector activity buoyed economic momentum despite election-related employment concerns. Commodities rose, with oil and gold leading gains, and equities saw volatility, with the S&P 500 down and modest advances in the Dow and NASDAQ. Earnings reports from GE, GM, Coca-Cola, and Tesla highlighted strong performances, particularly from Tesla and GM, energizing investor sentiment.
Major Economic Indicators and Events in Review
Wednesday, October 23
16:45 – Canada: Overnight Rate (CAD)
The Bank of Canada has cut its policy rate by 50 basis points to 3.75% to support economic growth and maintain inflation near the 2% target. With recent declines in inflation, moderate economic growth, and easing global financial conditions, the Bank signals possible further rate reductions, adjusting policy based on evolving economic data.
The USDCAD pair experienced a modest uptick, advancing 0.13% from the previous session’s close.
Thursday, October 24
11:00 am – Europe: Flash Manufacturing PMI (EUR)
The Eurozone’s business activity slightly contracted in October, driven by weak demand and a deepening decline in manufacturing, offset slightly by modest gains in services. Manufacturing saw a 19th consecutive month of contraction, while the service sector’s expansion hit an eight-month low as new orders dropped. Employment fell across the Eurozone, with notable cuts in Germany. Inflationary pressures eased overall but remained elevated in services due to wage impacts. Analysts anticipate a cautious ECB rate cut of 25 basis points in December amidst persistent inflation in services.
The EUR/USD currency pair appreciated by 0.4% from the previous session, signaling moderate upward momentum in response to recent market dynamics.
11:30 am (GMT+3) – UK: Flash Manufacturing PMI (GBP)
In October, UK private sector growth fell to its lowest in 11 months, with the PMI Composite Output Index down to 51.7 from 52.6 in September. Weakened demand, business uncertainty, and a first-time decline in employment for 2024 highlighted a subdued economic outlook. While input cost inflation eased, allowing potential rate cuts from the Bank of England, rising prices charged suggest persistent inflationary pressures.
The GBPUSD exchange rate rose by 0.4%.
16:45 – USA: Flash PMI (USD)
In October, the S&P Global Flash US Composite PMI rose to 54.3, indicating solid growth in business activity, driven by robust service sector performance. Manufacturing continued to contract, though at a slower pace. Selling price inflation moderated to its lowest since May 2020, with input costs also easing. Employment slightly declined for a third month amid election-related uncertainty, while future business confidence improved, reflecting hopes for stability post-election.
The US Dollar Index decreased by 0.39%.
Friday, October 25
15:30 – Canada: Retail Sales m/m (CAD)
In August 2024, Canadian retail sales rose by 0.4% to $66.6 billion, driven by a 3.5% increase at motor vehicle and parts dealers. Core retail sales, excluding auto and fuel, declined by 0.4%, mainly due to decreased sales at food and beverage stores. E-commerce sales dropped by 2.5%, accounting for 5.9% of total retail trade. Retail sales rose in seven provinces, with Ontario and Quebec leading, while Alberta saw the largest decline. An early estimate suggests a further 0.4% increase in retail sales for September.
The USDCAD pair advanced by 0.3% from the prior daily session.
Commodities
- Crude Oil
Crude oil recorded a strong 4.0% gain over the past week, underscoring heightened market optimism and potential supply concerns.
- Brent Oil
Brent crude prices experienced a 3.7% uptick week-over-week, reflecting a notable strengthening in the market.
- Gold
Gold (XAUUSD) closed the week with an increase of 0.9%
- Silver
XAGUSD recorded a modest weekly increase of 0.06%, signaling a relatively stable performance within the silver market for the period.
Stock Market
- The S&P 500 declined by 1.03% over the past week, reflecting ongoing market volatility.%
- DJIA was up by 0.4%
- NASDAQ 100 increased by 0.074%
Top Gainers
- Monopar Therapeutics Inc. (MNPR) 207.82%
- Synergy CHC Corp. (SNYR) 107.41%
- Allakos Inc. (ALLK) 98.49%
Top Losers
- Orangekloud Technology Inc. (ORKT) -74.75%
- Alto Neuroscience, Inc. (ANRO) -69.72%
- Graphjet Technology (GTI) -57.03%
Company Earnings (October 21 – 25)
Tuesday, October 22: GE (General Electric)
Tuesday, October 22: GM (General Motors)
Wednesday, October 23, KO (The Coca-Cola Company)
Wednesday, October 23, TSLA (Tesla, Inc.)
GE (General Electric) exceeded expectations in its Q3 results, reporting revenue of $9.8 billion and adjusted earnings of $1.15 per share, surpassing both analyst consensus and internal forecasts. Sales and earnings came in above the consensus estimates of $9.0 billion and $1.14 per share, reflecting strong performance.
GE shares declined 6.75% over the past week, signaling increased investor caution.
GM (General Motors) reported strong Q3 results on October 22, driving a 10%+ boost in its share price, which has surged 80% over the past year to its highest level in nearly three years. This growth rate doubled that of the S&P 500 and significantly outpaced Tesla and Ford, both of which remained flat over the same period.
General Motors (GM) shares recorded a 5.6% gain over the past week, marking a solid upward movement in the stock.
In Q3, Coca-Cola’s (KO) net revenue slightly declined by 0.8% year-over-year to $11.9 billion, while organic revenue rose 9%. Earnings per share increased 5% to 77 cents, exceeding analysts’ expectations of $11.6 billion in revenue and 74 cents per share.
Coca-Cola shares experienced a 5.1% decline over the past week.
Tesla’s (TSLA) Q3 results exceeded expectations, with revenue up 7.8% year-over-year to $25.18 billion and EPS reaching $0.72, surpassing both last year’s $0.66 and the $0.60 forecast. GAAP net income was $2.2 billion, while non-GAAP net income reached $2.5 billion, reflecting improved margins and profitability.
Tesla’s stock saw a significant uptick last week, climbing 21.8% as investor sentiment strengthened.
Conclusion
In conclusion, the week highlighted contrasting economic landscapes, with rate adjustments in Canada aimed at bolstering growth while European economies faced persistent manufacturing challenges. Strong US service sector growth and easing inflation in manufacturing were tempered by election-related uncertainties. Commodities saw gains, particularly in crude oil, while equity markets displayed mixed results amid earnings reports. Standout performances from Tesla and GM boosted investor confidence, illustrating selective optimism amid ongoing market volatility.