The Day Ahead.
Robert R. Fragnito
Chief Operating Officer | Financial Advisor | Portfolio Manager at MCF Capital Management, LLC
U.S. stocks finished in positive territory on Tuesday as all three major indexes finished a third-straight month of declines.? ???
Stocks extended Monday’s rally with hopes of a brighter days ahead in November. Wednesday marks the start of a new month with a big Federal Reserve decision. Moving past the conclusion of the central bank’s policy decision, investors await earnings from tech-giant Apple the day after, and employment data on Friday.
So far, corporate earnings reports have been lackluster. Reports from construction and mining equipment maker Caterpillar Inc. disappointed, along with Pfizer Inc., a major pharmaceutical maker.??
U.S. economic data was mixed on Tuesday. In housing, the CoreLogic Case-Shiller 20-city house-price index revealed that home prices continued to rise for a sixth-straight month, increasing 1% from August to July and 2.2% on an annualized basis.
Consumer confidence as measured by the Conference Board showed that Americans are less confident. The gauge hit a five month low as rising interest rates, inflation concerns, and the ongoing war in the Middle East weighed. The report fell from 104.3 in September to 102.6 in October, yet despite the drop, the reading came in better than expected.?? ?
U.S. labor cost data increased again in the third quarter as workers compensation rose 1.1%. Overall, labor costs have increased at least 1% for nine straight quarters.
U.S. Treasury yields were generally mixed on Tuesday as traders weighed several factors heading into Wednesday Fed decision. Economic data and new U.S. Treasury needs weighed, along with the news of China’s manufacturing sector falling into contraction in October, stoking fears of slowing global growth.
In other markets, oil futures fell on Tuesday and were nearly 11% lower in October, while gold settled 7.4% higher for the month but finished down on the day. Finally, the U.S. dollar index rallied on Tuesday.?
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Looking Ahead
Investors extended Monday’s rally with some bumpy trading action intraday. Optimism of what lies ahead seems to be confident but is sure to be tested in the coming days. We maintain that the future path of interest rates in the U.S. Treasury market are of major importance.
Tuesday’s labor cost data did not inspire resolve that the Fed’s fight against inflation is necessarily over. Futures market anticipate that the U.S. Federal Reserve will keep rates unchanged on Wednesday, what is of critical importance is what will be said in its statement and commentary from Fed Chair Jerome Powell.
We remain bearish as we feel the current risk-reward environment continues to call for serious caution and risk management.
Stay tuned!
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Newswire reports from FinancialJuice
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MCF Capital Management, LLC is an independent, family-run, financial advisory firm that manages investment portfolios for individuals and businesses through Quantitative Market Data Analysis.
THIS ARTICLE IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT INVESTMENT ADVICE.?
???SOURCES:?LSEG Workspace, Dow Jones NewsPlus, MarketWatch, Wall Street Journal, Barron’s, FinancialJuice, Investing .com, CNBC, Wells Fargo Investment Institute, TradingView