Week of Oct 18, 2024 Weekly Recap & The Week Ahead
“You need to know very well when to move away, or give up the loss, and not allow the anxiety to trick you into trying again.” – Warren Buffett
1. New York Manufacturing Contracts as Orders, Shipments Weaken — The Federal Reserve Bank of New York’s October general business conditions index slid 23.4 points to a five-month low of minus 11.9, figures issued Tuesday showed. Readings below zero indicate contraction, and the figure was weaker than all estimates in a Bloomberg survey of economists. At the same time, the six-month outlook for overall activity increased to a three-year high of 38.7, indicating the state’s manufacturers are more upbeat about the economy’s prospects. A measure of current new orders dropped nearly 20 points to minus 10.2 after climbing a month earlier to the highest since April 2023. The index of shipments decreased almost 21 points to minus 2.7.
The employment index, however, rebounded to 4.1 — the first expansion in a year — while a measure of hours worked also climbed.
2. China Security Group Urges Review of Intel’s Chips as Tech Tension With U.S. Rises — The CyberSecurity Association of China on Wednesday urged for the review by the nation’s regulator, claiming that Intel’s products have shown security vulnerabilities and high failure rates and pose a national-security threat to the country. The call could be a precursor to an official investigation in one of Intel’s most important markets by the powerful Cyberspace Administration of China, which last year conducted a cybersecurity review of another American chip maker, Micron Technology MU 4.72%increase; green up pointing triangle. That review identified “significant security risks” in Micron’s products, and the administration directed major operators of IT infrastructure in the country not to buy them. Micron estimated that the ban would reduce its sales by a low double-digit percentage.
3. Retail sales rose 0.4% in September, better than expected — Retail sales increased a seasonally adjusted 0.4% on the month, up from the unrevised 0.1% gain in August and better than the 0.3% Dow Jones forecast, according to the advance report. Excluding autos, sales accelerated 0.5%, better than the forecast for just a 0.1% rise. The numbers are adjusted for seasonal factors but not inflation, which rose 0.2% on the month as measured by the consumer price index.
In other economic news Thursday, initial unemployment claim filings totaled a seasonally adjusted 241,000, a decline of 19,000 and lower than the estimate for 260,000, the Labor Department reported. Together, the reports show that consumers, who power about two-thirds of all economic activity in the U.S., are still spending and the labor market is holding up after signs of weakening through the summer.
4. Chinese Growth Comes in Cooler as Investors Pin Hopes on Stimulus — The growth figure China released Friday will do little to buoy sentiments. China’s economy expanded 4.6% in the July-to-September quarter compared with the year-earlier period. That was a touch slower than the 4.7% year-over-year expansion in the second three months of the year..Pan Gongsheng, governor of the People’s Bank of China, said on Friday that benchmark interest rates could be cut as soon as Monday. In mainland China, the benchmark CSI 300 index closed up 3.6%. In Hong Kong, the Hang Seng Index also closed 3.6% higher. Expectations are high that a committee of China’s legislature, the National People’s Congress, will sign off on a big new fiscal package, possibly running into hundreds of billions of dollars of extra government borrowing, when it convenes later this month.
The week ahead — Economic data from Econoday.com:
