Top Things to Watch

This might be the scariest week of 2024 so far, and it has nothing to do with "Día de los Muertos" or me being dramatic.

With markets in the final stretch before the U.S. presidential election and the Federal Reserve’s November meeting approaching, volatility looks set to continue.

The employment report for October will be published just days before Americans head to the polls on November 5 to elect a new president. This report could be decisive for voters as they choose their candidates, especially with Trump having an edge due to his policies favoring American companies.

To add to the anxiety and volatility, five of the "Magnificent Seven" tech stocks will report their earnings this week. These companies have had a significant impact on driving market gains over the past couple of years, so any figures that fall below expectations could lead to substantial price swings.

China will also be closely monitored, as analysts believe that the central bank's measures have not been sufficient to fully revive the economy. The country faces serious challenges, including a crisis in the property sector, which was once a key driver of economic growth and a major source of funding for local governments. Additionally, China, which was known as the world’s factory, is now grappling with overproduction in sectors like steel and manufacturing, while tech companies are shifting production to Southeast Asia due to lower costs and reduced geopolitical tensions. If reports from China fail to show the growth that the government had anticipated, we can expect market reactions, particularly in commodities such as oil and copper.

My best advice for non-professional and inexperienced traders is to SIT ON YOUR HANDS!

October 29th

US: JOLTS Job Openings

The primary factor influencing the USD has been the unwavering strength of the U.S. economy. Better-than-anticipated employment statistics, retail sales figures, and jobless claims have led investors to reconsider their expectations regarding potential rate cuts by the Federal Reserve.

The JOLTS data for September, along with Thursday's report on initial jobless claims, will be scrutinized for indications of any weakening in the labor market, as these reports will play a crucial role in the Federal Reserve's rate decision to be made six days thereafter.

October 30th

US: Gross Domestic Product (GDP) QoQ

This is the other major key indicator the Fed pays close attention to. So far the first estimate of third quarter GDP is the maintanance of the solid 3% annual rate US economy has been delivering. Other reports included in this week releases are October data on consumer confidence and business sentiment, pending home sales and the t is to release its October manufacturing index from the Institute for Supply Management.

Check all key events on this calendar !

China: Manufacturing Purchasing Managers Index (PMI)

This indicator provides an early overview of monthly economic activities in the Chinese manufacturing sector.

Expectations are that data will already reflect some effects of the barrage of stimulus measures rolled out by Beijing over the past month.?

In September, the central bank of China unveiled its most forceful interventions since the onset of the pandemic, aiming to revitalize the economy after indications emerged that the nation could fall short of its 5 percent gross domestic product (GDP) growth target for 2024. These stimulus initiatives have predominantly concentrated on monetary policy, specifically targeting banks and the money supply by implementing lower interest rates and reducing reserve requirements for financial institutions. This approach sparked a market rally, reaching its peak in two years; although there has been a subsequent decline, a sense of optimism remains prevalent.

October 31st

US: Core PCE Price Index YoY

The Core PCE is the less volatile measure of the PCE price index which excludes the more volatile and seasonal?food?and?energy?prices.

Expecations are that this report will confirm a steady 2,7% growth (same as previous month) which will reinforce the Fed’s shift in focus from inflation to unemployment/growth.

November 1st

US: Non-farm Payrolls/ Unemployment rate

These numbers can be game-changers!

In recent months, essential labor market metrics — such as job openings, the quit rate, and layoffs — indicated that the previously tight labor market is starting to ease. However, the ongoing job growth demonstrates that the job market remains robust.

Earlier employment reports were affected by hurricanes and an ongoing strike involving approximately 33,000 Boeing workers.