The final full week of October was a relatively quiet one for traders as there were only a couple of major news items released.
On Thursday, the Flash Manufacturing PMI and the Flash Services PMI were announced. It was revealed that manufacturing was still in a contraction phase coming in at 47.8. Anything under 50 suggests that the sector is contracting, but it’s worth noting that it beat estimates of 47.5 prior to the release.
Meanwhile, the service sector was still in a period of expansion, coming in at 55.3 compared to an expected 55. As has been the case for most of 2024, demand for services has buoyed the economy while manufacturing struggles to find any sort of momentum. Data from the University of Michigan showed that consumer sentiment increased to 70.5 from 68.9 last month. Therefore, it’s possible that service spending may continue to increase throughout the rest of 2024.
However, there may have been some moderately good news on that manufacturing front as the Richmond Manufacturing Index came in at negative 14 on Monday compared to an expected negative 19. Also on Thursday, unemployment claims for the past seven days were made public, and it was revealed that 227,000 such claims were made. That figure came in below the expected 242,000 requests for benefits over the previous seven days.
The S&P 500 finished the week down .9 percent to close at 5,808. It made its high of the week on Monday when it hit 5,864 and made its low of the week on Wednesday when it dipped to 5,767.
The Dow was down 2.5 percent this week to finish at 42,114. As with the S&P, the Dow made its high of the week on Monday and would spend the rest of the week in a freefall. On Monday, the market climbed to 43,193 and would ultimately close at its low of the previous five trading days.
Finally, the Nasdaq finished slightly higher this week thanks to a rally on Friday. Over the past five trading days, the index gained .16 percent to close at 18,518. It made its low of the week on Wednesday dipping to 18,161 before reversing and making a high of 18,684 on Friday morning.
There were a number of important news releases taking place internationally. On Wednesday, the Bank of Canada (BOC) reduced the nation’s key interest rate by 50 basis points from 4.25 percent to 3.75 percent. On Friday, Canada revealed that both core and overall retail sales dropped during the past month by .4 percent and .7 percent, respectively.
Many nations across the Eurozone also released Flash Services and Flash Manufacturing PMI data. As with the United States, most reported figures below 50 for manufacturing and above 50 for services with the United Kingdom being the only exception. Its Flash Manufacturing PMI came in at 50.3.
On Tuesday, the CB Consumer Confidence and JOLTS reports are due to be released, and nonfarm payroll data will be released on Wednesday and Friday. The Core PCE Price Index for September will be released on Thursday, which may provide some context as to how the Fed rate cuts have impacted the market. Australia, Germany and Switzerland are also expected to report CPI data next week while Japan is going to make its next rate decision at some point on Wednesday night.