Weekly Macro Matters
Macro Matters – Weekly review, w/c September 27
Thanksgiving week saw subdued markets with low volatility as FOMC minutes highlighted a patient Fed. US PMI data hinted at economic challenges, while Nvidia reported strong earnings but faced hurdles ahead.
TradeDay Macro Matters
Macroeconomic / Geopolitical Developments
• A Quiet Week for Markets in Thanksgiving Holiday-Shortened Week
The Thanksgiving holiday brought subdued activity in financial markets, with limited volatility and price movements. Traders are now preparing for the return to regular market dynamics.
• FOMC Minutes Highlight Patient Fed
The Federal Reserve emphasized a cautious approach to interest rate changes, underscoring the importance of data evaluation. Policymakers maintained the benchmark rate at 5.25%–5.5% despite strong economic indicators, including robust hiring and consumption. Concerns over a recent bond rout and its implications for monetary policy were also discussed.
• US Flash PMI Data Slightly Disappoints
November’s PMI data indicated marginal economic growth, with Composite PMI at 50.7. While services showed modest improvement, manufacturing continued to contract, with layoffs observed across sectors. Economists point to the lagging effects of past rate hikes and suggest a potential slowdown in Q4. Encouragingly, input prices rose at the slowest pace in three years, aiding inflation moderation.
• Nvidia Numbers Beat, but Stock Price Stalls
Nvidia’s Q3 results exceeded expectations, with revenue at $18.12 billion and adjusted earnings of $4.02 per share. However, export restrictions to China and other regions are expected to impact Q4 sales. Despite a 241% stock rise this year, concerns about competition and geopolitical factors tempered enthusiasm.
• OPEC+ Meeting Delayed
Disputes over African member quotas postponed the OPEC+ meeting to November 30, which will now be held online. The delay heightens uncertainty over oil production decisions for 2024. Oil prices have fallen 16% since September amid concerns of surplus supply and slowing demand.
What’s Ahead
Geopolitical Events:
• OPEC+ meeting rescheduled for Thursday.
Central Bank Watch:
• Reserve Bank of New Zealand (Tuesday): Interest rate decision and press conference.
• Fed Chair Powell speaks Friday.
Macro Data Watch:
• Wednesday, November 29: EU Consumer Confidence, German CPI, US GDP, and PCE (QoQ).
• Thursday, November 30: Chinese PMI, German Retail Sales and Unemployment, EU CPI, US PCE (MoM and YoY), Canadian GDP, and OPEC+ meeting.
• Friday, December 1: Global PMI (S&P Global), US ISM PMI, and remarks from Fed Chair Powell.
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