Weekly Macro Matters
Macro Matters – Weekly review, w/c November 20
US CPI data exceeded expectations, driving rallies in both stocks and bonds. PPI and Retail Sales also beat forecasts, while UK CPI showed a significant drop. The US-Sino summit provided positive signals, and the US Senate averted a shutdown with a stop-gap funding measure.
TradeDay Macro Matters
Macroeconomic / Geopolitical Developments
• US CPI Beats Expectations, Bonds and Stocks Rally
October’s Consumer Price Index slowed to 3.2% year-over-year, down from 3.7% in September. The data reinforced confidence in the Federal Reserve’s policies and eased concerns about further rate hikes. Treasury yields dropped, with the two-year yield falling by 0.2% to 4.85%, while stocks saw a robust rally, with the S&P 500 rising 1.9% and the Russell 2000 gaining 5%.
• US PPI and Retail Sales Also Bested Consensus Numbers
Retail sales increased by 2.5% year-over-year in October, with strong growth in health, personal care, and e-commerce sectors. Meanwhile, the Producer Price Index (PPI) fell significantly, recording a -0.5% month-over-month change—the lowest since April 2020. Core PPI dropped to 0.0%, signaling cooling inflation pressures.
• UK CPI Cools More Than Analysts’ Forecasts
UK inflation dropped to 4.6% in October, the lowest in two years, driven by lower energy prices. This surpasses expectations and alleviates concerns about further rate hikes by the Bank of England. The decline reflects slower price increases rather than outright reductions.
• US-Sino Summit Uneventful but Positive
Presidents Joe Biden and Xi Jinping agreed to resume high-level military communications, address AI regulation, and tackle fentanyl production issues. While significant challenges like trade tensions remain, the meeting signaled a constructive approach to US-China relations.
• Target Soars, Walmart Declines After Earnings Reports
Target’s Q3 results surpassed expectations, with shares rising 18%, driven by strong sales in high-frequency categories. Walmart also exceeded estimates but issued a cautious outlook, leading to an 8.1% stock decline. Both companies highlighted changing consumer behavior amidst economic pressures.
• US Senate Approves Stop-Gap Spending Measure
Congress passed a bill to fund federal agencies through early 2024, avoiding a government shutdown. However, internal GOP divisions and tight timelines pose challenges for reaching a long-term spending agreement, with potential automatic cuts looming in April.
What’s Ahead
• General:
US Thanksgiving on Thursday will see financial markets mostly closed, with partial trading hours on Friday.
• Central Bank Watch:
Key events include the People’s Bank of China (PBoC) Interest Rate decision on Monday and meeting minutes from both the Reserve Bank of Australia (RBA) and the US Federal Open Market Committee (FOMC) on Tuesday.
• Macro Data Watch:
Highlights include global Flash PMI releases on Thursday and Friday, US Durable Goods and Michigan Consumer Sentiment on Wednesday, and the UK Autumn Forecast Statement on Thursday. Japan CPI, German GDP, and IFO Survey data are also due Friday.
Please see our Terms of Use for additional details and restrictions.
Permitted products: Tradeday traders are allowed to trade listed Futures products only; we allow trading on the following exchanges: CME, CBOT, NYMEX, and COMEX. Trading of Stocks, Options, Forex, Cryptocurrency, and CFDs are not permitted nor available in our program or platforms.
Risk Disclosure: Futures trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. You should only put capital at risk that you can afford to lose. Past performance is not necessarily indicative of future results.
Evaluation Challenge Disclaimer: The trader pass rate of the evaluation program was 28.2% between October 2023 and March 2024. The evaluation is a realistic simulation of trading under actual market conditions and is difficult to pass even for experienced traders. Testimonials appearing on this website may not be representative of other clients or customers and are not a guarantee of future performance or success.
Simulated Trading; CFTC Rule 4.41: During the Evaluation Challenge, users trade in simulated markets. Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown.
Refund Policy: TradeDay works with a number of third-party service providers that require immediate commitment from TradeDay when an account is opened, as such we are unable to offer a refund after purchase. If you are unsure that TradeDay is the right place for you we strongly recommend you take the 14-day free trial where there is no obligation to purchase, and no credit card is needed to sign up. All membership fees are considered used in full.
TradeDay is not registered in any capacity with the SEC or CFTC.28.2