Global markets end week mixed as US economic data indicates robust activity
Date
10/28/2024 8:19:12 AM
(MENAFN) Global markets ended the week with mixed signals as new economic data indicated robust activity across major economies, even as inflation concerns persisted. Analysts suggest that US labor and manufacturing data may push back the Federal Reserve's timeline for achieving its 2 percent inflation target, likely impacting its strategy on rate cuts. The latest reports reflect a complex economic landscape where growth indicators remain strong, though inflationary pressures continue to challenge central bank objectives.
In the United States, last week’s unemployment claims dropped to 227,000, coming in below market forecasts and signaling continued resilience in the labor market. This decline has reinforced expectations that the Fed may not move toward rapid rate reductions in the near term, as a strong job market could support sustained inflation. In addition to labor market resilience, the October Purchasing Managers’ Index (PMI) for manufacturing showed a modest rise to 47.8, while the services PMI increased to 55.3, further suggesting steady activity in key sectors.
Housing data provided another positive indicator, with new home sales climbing by 4.1 percent in September to 738,000, the highest figure since May 2023. This surge in sales underscores optimism about the strength of the broader economy. However, Fed officials remain cautious about declaring victory over inflation, pointing out that the 2 percent target remains elusive. Money markets are pricing in a 72 percent probability of a 25 basis point rate cut next month, with expectations for an additional cut in December. The 10-year US Treasury yield stood at 4.20 percent on Friday morning, while the dollar index fell to 104.1 after a 0.4 percent decline.
In corporate news, electric vehicle giant Tesla reported substantial gains in production and sales, with forecasts projecting a potential 30 percent increase in sales next year. This optimistic outlook drove Tesla shares up nearly 22 percent, marking their largest one-day gain since 2013. Conversely, IBM’s quarterly revenue missed expectations, leading to a 6 percent drop, while Boeing faced ongoing labor issues, with workers rejecting a proposed pay raise and shares declining by 1.2 percent.
Political uncertainties also played a role in market sentiment, as US polling data indicates a tight race between former President Donald Trump and Vice President Kamala Harris, adding an element of uncertainty. The Dow Jones fell by 0.33 percent on Thursday, while the S&P 500 and Nasdaq showed modest gains of 0.21 percent and 0.76 percent, respectively, though futures pointed to a potential downturn on Friday morning. These dynamics highlight the balancing act facing investors, who are weighing solid economic fundamentals against looming inflation risks and political factors.
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