“Losers average losers.” …unknown

1. US Inflation Stays Firm for Third Month With 0.3% Core CPI Gain — the so-called core consumer price index — which excludes food and energy costs — increased 0.3% for a third month, Bureau of Labor Statistics figures showed Wednesday. Over the last three months it rose at a 3.6% annualized rate, marking the fastest pace since April, according to Bloomberg calculations. Economists see the core gauge as a better indicator of the inflation trend than the overall CPI. The headline measure rose 0.2% for a fourth month and 2.6% from a year before, marking the first acceleration on an annual basis since March. The BLS said shelter accounted for over half of the overall monthly advance.
2. Wholesale prices rose 0.2% in October, in line with expectations — the producer price index, which measures what producers get for their products, increased a seasonally adjusted 0.2% for the month, up one-tenth of a percentage point from September though matching the Dow Jones consensus forecast. On a 12-month basis, headline wholesale inflation was at 2.4%.
Excluding food and energy, core PPI rose 0.3%, also one-tenth more than September and also matching expectations. The 12-month rate was at 3.1%.
3. Solid Retail Sales Show Strength of U.S. Consumer — the Census Bureau said Friday that retail sales gained 0.4% in October from September, better than economists’ forecasts for a 0.3% increase. Sales rose 2.8% on an annual basis.
Demand for cars and car parts helped push the headline figure higher. Spending at car and parts retailers rose by 1.6% in October from the prior month. Indeed, when stripping out the effects of car dealers and gasoline stations, sales ticked up by 0.1%, below expectations for a 0.3% increase. Categories that grew in October include electronics and appliances stores, which gained by 2.3%, and building material suppliers, up 0.5%, likely reflecting the beginning of hurricane-reconstruction efforts.

The week ahead — Economic data from Econoday.com:

1. U.S. Services Sector Accelerates on Employment Boost — the Institute for Supply Management’s services-activity index edged up to 56.0 in October from 54.9 in September, beating expectations of 53.7 expected in a poll of economists compiled by The Wall Street Journal. That marked the fourth-straight month of expansion, registered when the gauge is above the 50 no-change mark. The survey showed services employment expanding last month, after it contracted in September, though demand—as measured by new orders—slowed, despite still being in exclusionary territory, ISM said.
2. Trump Wins US Presidential Election in Extraordinary Comeback — Donald Trump was elected the 47th president of the United States, pulling off a stunning political comeback in one of the most polarized contests for the White House in US history. Trump, 78, won an unprecedented race during which he was convicted of felonies, survived two assassination attempts and crushed a challenge from Vice President Kamala Harris after she replaced an unpopular President Joe Biden in the campaign’s final months. He was elected by a country deeply at odds over immigration, abortion and foreign policy, and one still feeling the pinch after the biggest surge of inflation in four decades. Trump also helped Republicans recapture the Senate, underscoring his ability to seize on voter angst.
3. Fed Cuts Rates; Powell Says Wouldn’t Resign If Asked By Trump — Fed officials unanimously lowered the federal funds rate to a range of 4.5% to 4.75%. The second-straight rate cut followed a larger, half-point reduction in September, extending efforts to keep the US economic expansion on solid footing. Powell said the US presidential election will have “no effects” on the central bank’s policy decisions in the near-term, noting it’s too early to know the timing or substance of any potential fiscal policy changes. Federal Reserve Chair Jerome Powell said he would not resign from his role if asked to do so by a re-elected Donald Trump, following the Fed’s decision Thursday to lower interest rates by a quarter percentage point.

The week ahead — Economic data from Econoday.com:

1. US Economy Expands at 2.8% Rate, Powered by Resilient Consumer — Gross domestic product, a measure of all the goods and services produced during the three-month period from July through September, increased at a 2.8% annualized rate, according to a Commerce Department report Wednesday that is adjusted for inflation and seasonality.
Economists surveyed by Dow Jones had been looking for an increase of 3.1%. The economy accelerated at a 3% pace in the second quarter. However, resilient consumer spending, which accounts for about two-thirds of all activity, has helped keep the economy moving, as has a relentless wave of government spending that pushed the budget deficit to more than $1.8 trillion in fiscal 2024.
2. Key US Inflation Gauge and Spending Pick Up in Solid Economy — The so-called core personal consumption expenditures price index, which strips out volatile food and energy items, increased 0.3% in September, and 2.7% from a year earlier, according to Bureau of Economic Analysis data out Thursday. Overall inflation was 2.1%, the lowest since early 2021 and just above the central bank’s 2% goal. Thursday’s figures cap a month of upside surprises in key economic reports that will likely augur a cautious approach to rate cuts in the months ahead. The Fed is widely expected to authorize a second reduction at the conclusion of its Nov. 6-7 policy meeting following an initial cut in September.
3. US Payrolls Increase by Just 12,000, Hit by Storms and Strikes — Nonfarm payrolls increased 12,000 last month, and hiring over the previous two months was weaker than previously thought, suggesting the underlying labor market continues to cool. The unemployment rate held at 4.1% and hourly earnings ticked up, according to Bureau of Labor Statistics figures released Friday.
BLS said two hurricanes that hit the Southeast US likely affected hiring in some industries, but it wasn’t possible to quantify the net effect on the change in employment, hours or earnings last month. There was no discernible effect on the unemployment rate, however. The report also showed manufacturing jobs plunged, largely reflecting strike activity in October.
4. Post U.S. Election Market Stat — The major benchmarks on average have seen gains between Election Day and year-end in the presidential election year going back to 1980, according to CNBC data. However, the three indexes have all averaged declines in the session and week following those voting days. Stocks have tended to erase most or all of those losses within a month

The week ahead — Economic data from Econoday.com:

“It is not the strongest or the most intelligent who will survive but those who can best manage change.”
– Charles Darwin

1. US Previously Owned Home Sales Fall to an Almost 14-Year Low — Contract closings decreased 1% from a month earlier to a 3.84 million annualized rate, according to figures released Wednesday from the National Association of Realtors. Economists surveyed by Bloomberg expected a 3.88 million pace, based on the median projection. Many buyers and sellers are waiting for home financing costs to fall from their current perch in the mid-6% range. Mortgage rates, which slid to a two-year low in September, have climbed after recent job market and inflation data boosted bets the Federal Reserve will take a more gradual approach to reducing borrowing costs. The resale market has largely been stuck for the past two years, barely moving much above or below an annualized rate of 4 million homes on a monthly basis. A major factor has been the so-called lock-in effect, or homeowners’ reluctance to list their homes and surrender their lower mortgage rate.
2. U.S. Economy Again Leads the World, IMF Reported — The International Monetary Fund highlights those divergent paths in its latest global scorecard, released Tuesday. In what has become something of a trend, the IMF upgraded the outlook for both U.S. and global growth, though more for the former.
The IMF projects U.S. gross domestic product to expand 2.5% in the fourth quarter from a year earlier—half a percentage point higher than a July forecast, which itself was an upgrade from a January estimate. U.S. output rose 3.2% in 2023. For 2025, the IMF projects the U.S. to grow 1.9%, versus 1.7% for all advanced economies and 3.1% for the global economy. China, the world’s second-largest economy, is expected to post 4.5% growth this year—a slight downgrade from a prior estimate—and 4.7% in 2025, after expanding 5.4% last year. The euro area’s economy is expected to grow 1.2% this year and 1.3% next year, after expanding 0.2% last year.
3. Tesla Reports Higher Profit in Third Quarter — The Austin, Texas-based automaker said it recognized its second-highest quarter of regulatory-credit revenue, which comes from other automakers buying them to keep up with emissions requirements. Its energy business also stood out, helping to offset a decline in selling prices for many of its models. Net income was $2.2 billion for the July-to-September period, a 17% increase from a year earlier and lifted in large part by higher sales of regulatory credits to other automakers and the strength of Tesla’s energy business. Global deliveries also rose in the third quarter, helping to boost revenue by 8% to $25.2 billion. The company’s closely watched operating margin was 10.8%, up from 7.6% a year earlier.

The week ahead — Economic data from Econoday.com:

“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: