Weekly Market Recap: Market Momentum Amid Global Risks

This week’s financial and economic developments saw several key updates, including central bank decisions, inflation data, and corporate earnings reports. New Zealand’s central bank cut its cash rate amid economic concerns, while the US Consumer Price Index showed steady inflation growth. Major companies like Costco, Delta Air Lines, JPMorgan, and Wells Fargo reported earnings with varying degrees of success. While Costco and Delta posted strong results, JPMorgan raised concerns about global risks despite beating expectations. Stock markets ended the week on a positive note, with notable gains across key indices.

04:00 am – New Zealand: Official Cash Rate (NZD)

New Zealand’s Reserve Bank accelerated its rate-cutting efforts, lowering the Official Cash Rate by 50 basis points to 4.75% amid concerns over a weakening economy. This move, following a 25 basis-point cut in August, was largely expected by economists. The central bank noted that future rate changes will depend on evolving economic conditions. The decision comes as New Zealand faces rising unemployment, falling house prices, and slowing inflation. Economists predict further rate cuts, with markets anticipating another 50 basis-point reduction in November. The New Zealand dollar dropped following the announcement.

The New Zealand Dollar (NZD) depreciated 1.24% against the US Dollar (USD) compared to the previous trading session, reflecting a notable shift in currency dynamics.

15:30 – USA: CPI m/m (USD)

In September 2024, the Consumer Price Index for All Urban Consumers (CPI-U) rose 0.2% on a seasonally adjusted basis, matching the increases from August and July. Over the past 12 months, the all-items index increased by 2.4%. The food index grew 0.4%, with both food at home and food away from home contributing. Energy prices fell 1.9%, driven by a 4.1% decrease in gasoline. The index for all items, excluding food and energy, increased by 0.3%, with shelter, motor vehicle insurance, and medical care being key contributors. Over the last year, the core index rose by 3.3%.

The EURUSD experienced a slight decrease of 0.007% compared to the previous day.

15:30 – USA: Unemployment Claims (USD)

In the week ending October 5, seasonally adjusted initial jobless claims rose to 258,000, an increase of 33,000 from the previous week’s 225,000. This marks the highest level of claims since August 5, 2023. The 4-week moving average also increased to 231,000, up by 6,750 from the prior week’s average of 224,250.

The USDJPY declined by 0.49% from the previous daily session.

09:00 am – UK: GDP m/m (GBP)

In the three months to August 2024, real GDP grew by 0.2% compared to the previous three months. The growth was mainly driven by a 0.1% increase in services output and a 1.0% rise in construction output, while production output remained flat. On a monthly basis, real GDP increased by 0.2% in August 2024, following no growth in June and July.

The Cable saw a slight increase of 0.018%.

15:30 – Canada: Employment Change (CAD)

In September, employment increased by 47,000 (+0.2%), while the unemployment rate fell slightly to 6.5%. Notable job gains were seen among youth aged 15 to 24 (+33,000) and core-aged women (+21,000). Sectors such as information, culture, recreation, trade, and professional services all saw employment growth.

The USDCAD exchange rate increased by 0.15%.

15:30 – USA: PPI (USD)

In September, the US Producer Price Index (PPI) for final demand remained unchanged, following a 0.2% rise in August. Year-over-year, the PPI increased by 1.8%. A 0.2% rise in final demand services offset a 0.2% drop in final demand goods prices. Excluding food, energy, and trade services, the index edged up 0.1% for the month and 3.2% over the past year.

The EURUSD had a daily decline of 0.05%.

• Crude Oil
  Crude Oil had a 1.27% weekly gain.
• Brent Oil
  Brent rose by 0.95% compared to the previous week
• Gold
  Gold (XAUUSD) closed the week with a marginal increase of 0.16%
• Silver
  XAGUSD posted a weekly loss of 1.09%.

• S&P 500 increased by 1.10%
• DJIA was up by 1.21%
• NASDAQ 100 increased by 1.16%

• Top Wealth Group Holding Limited (TWG) 332.73%
• Scholar Rock Holding Corporation (SRRK) 257.28%
• The Container Store Group, Inc. (TCS) 123.41%

• CPI Aerostructures, Inc. (CVU) -58.85%
• Fangdd Network Group Ltd. (DUO) -49.41%
• Graphjet Technology (GTI) -47.33%

Wednesday, October 9: COST (Costco Wholesale Corp)

Thursday, October 10: DAL (Delta Air Lines, Inc.)

Friday, October 11: JPM (JPMorgan Chase & Co)

Friday, October 11: WFC (Wells Fargo & Co)

COST (Costco Wholesale Corp) reported net sales of $24.62 billion for September 2024, a 9.0% increase from the previous year. Comparable sales rose 6.7%, with US sales up 6.5%, Canada 5.7%, and international markets 8.5%. E-commerce saw a significant jump of 22.9%. Excluding gasoline and foreign exchange impacts, total comparable sales grew by 8.9%. The increase was partially driven by higher sales due to Hurricane Helene and port strikes.

DAL (Delta Air Lines, Inc.) had strong financial performance for the September quarter, with $1.3 billion in pretax income and double-digit operating margins. Free cash flow reached nearly $3 billion year-to-date, while corporate travel sales rose 7%. The company’s revenue aligned with guidance, and fuel prices declined 9%. However, a CrowdStrike-caused outage reduced EPS by $0.45. Despite challenges like higher unit costs and airspace constraints in New York, Delta remains optimistic, with earnings guidance for the December quarter at $1.60 to $1.85 per share.

JPM (JPMorgan Chase & Co) reported strong third-quarter earnings, beating expectations with a 7% rise in revenue to $42.7 billion and a 1% increase in earnings per share to $4.37. Despite this, CEO Jamie Dimon warned of worsening global risks, including geopolitical instability and economic uncertainties. The bank’s provision for credit losses jumped 125% to $3.1 billion. While consumer banking profits fell, the investment and corporate divisions saw significant gains. Dimon emphasized concerns over fiscal deficits, trade restructuring, and global military tensions. JPMorgan’s stock has risen nearly 24% this year.

WFC (Wells Fargo & Co) stock rose 6% after reporting third-quarter results that surpassed analysts’ expectations. Although revenue and profit declined year-over-year, the drop was less severe than anticipated. The bank posted $5.11 billion in net income, beating estimates by nearly half a billion dollars, and its revenue reached $20.37 billion. Wells Fargo’s stock is up about 25% this year.

In conclusion, this week highlighted a mix of economic developments and corporate earnings results. Central bank actions, inflation data, and employment statistics painted a picture of a complex global economy. Key companies like Costco, Delta, JPMorgan, and Wells Fargo posted solid earnings, though concerns over global risks remain. Stock markets ended on a positive note, with notable gains across major indices, reflecting investor optimism despite underlying economic uncertainties.