Ronald Reagan was a good President, but not a great one. The right has overrated him. With another critical Presidential election imminent, let me correctly assess his 8-year Presidency in terms of the good, the bad, and the ugly.
*Stock data, cryptocurrency, and commodity prices at the market closing
The major US stock indexes closed lower after fluctuating throughout the trading session. Alphabet’s (GOOG, GOOGL) strong quarterly results boosted optimism for Big Tech with Alphabet shares jumping nearly 3% Amazon (AMZN), Meta (META), and Microsoft (MSFT) saw smaller gains Investors eagerly await after-hours earnings reports from Meta and Microsoft. Fresh economic data provided mixed signals: US economic growth slowed to a 2.8% annualized rate last quarter, slightly below forecasts Consumer spending remained robust as inflation continued to fall. ADP report showed a surge in US private payroll growth for October. Reddit (RDDT) stock soared over 40% after reporting its first-ever profit as a public company and beating revenue expectations.
Private employers added 233,000 jobs in October 2024 according to ADP. The largest growth was in the services sector with the manufacturing sector losing 19,000 jobs. Even I am surprised at the high jobs growth for a variety of reasons. This boosts the chance that Friday’s jobs report from the BLS will be strong also. Nela Richardson, Chief Economist ADP opinion:
Even amid hurricane recovery, job growth was strong in October. As we round out the year, hiring in the U.S. is proving to be robust and broadly resilient.
The advance estimate of 3Q2024 Real Gross Domestic Product (GDP) came in at 2.7% growth year-over-year – down from the 2Q2024’s 3.0%. The inflation indicator (Implicit Price Deflator) moderated from 2.6% year-over-year to 2.2%. It appears that inflation in the elements that make up GDP are moderating – all whilst GDP is slowing. Remember buying anything used (most houses and cars sold are used) or imported items ares not included in GDP, and insurance and payouts in GDP is somewhat complex. But tomorrows Personal Income and Expenditures DOES include used and imported items. All this is why GDP is not an important metric for Joe and Jane Sixpack to understand how the economy is doing for them personally.
Pending home sales in September 2024 increased by 2.6% year-over-year, the first increase since March, and the fastest increase since May 2021. Literally, pending home sales since 2022 have been down 25% from the previous 10 year period. I can see no recovery for home sales without some combination of lower mortgage rates and/or home prices.
Here is a summary of headlines we are reading today:
Click on the “Read More” below to access these, other headlines, and the associated news summaries moving the markets today.
Short Range Forecast Discussion
NWS Weather Prediction Center College Park MD
Wed Oct 30 2024
Valid 12Z Wed Oct 30 2024 – 12Z Fri Nov 01 2024…Moderate to heavy snow over parts of the Southern Cascades and Northern
Intermountain Region with a second area over parts of the Upper Midwest on
Thursday……Temperatures will be 20 to 30 degrees above average over parts of the
Great Lakes/Ohio Valley……There is an Enhanced Risk of severe thunderstorms over parts of the
Middle Mississippi Valley and Central/Southern Plains on Wednesday…A wave of low pressure along a front over the Southern High Plains will
move northeastward to eastern Quebec, Canada, by Friday. Ahead of the
front, temperatures will be 20 to 30 degrees above average over parts of
the Great Lakes/Ohio Valley. A warm front over Northern New England will
move northeastward into Southeastern Canada by Thursday. Ahead of the warm
front, rain will develop over parts of Northern New England, ending by
Wednesday evening.On Wednesday, moist air flowing northward over the Plains will extend into
the Upper Great Lakes, creating showers and severe thunderstorms will
develop ahead of the front over parts of the Middle Mississippi Valley and
Central/Southern Plains. Therefore, the SPC has issued an Enhanced Risk
(level 3/5) of severe thunderstorms over the Central Plains through
Saturday morning. The hazards associated with these thunderstorms are
frequent lightning, severe thunderstorm wind gusts, hail, and a few
tornadoes.Moreover, southeasterly flow off the Gulf of Mexico will create scattered
showers and thunderstorms over parts of the Western Gulf Coast from
Tuesday into Wednesday. Similarly, easterly flow off the Atlantic will
produce showers and thunderstorms over parts of Florida through Thursday
morning. In addition, there is an increased threat of EF2 � EF5
tornadoes over the areas.Furthermore, moderate to heavy rain will develop along the front over
parts of the Mississippi Valley and the Central/Southern Plains.
Therefore, the WPC has issued a Marginal Risk (level 1/4) of excessive
rainfall over parts of the Mississippi Valley and parts of the
Central/Southern Plains through Thursday morning. The associated heavy
rain will create localized areas of flash flooding, affecting areas that
experience rapid runoff with heavy rain.On Thursday, the threat of severe thunderstorms from the Great Lakes to
the Lower Mississippi Valley will decrease to strong to severe
thunderstorms. Therefore, the SPC has issued a Marginal Risk (level 1/5)
of severe thunderstorms over parts of the Great Lakes to the Lower
Mississippi Valley from Thursday into Friday morning. The hazards
associated with these thunderstorms are frequent lightning, severe
thunderstorm wind gusts, hail, and a few tornadoes.Further, the showers and thunderstorms will create heavy rain over parts
of the Tennessee and Lower Mississippi Valleys. Therefore, the WPC has
issued a Marginal Risk (level 1/4) of excessive rainfall over parts of the
Tennessee and Lower Mississippi Valleys from Thursday to Friday morning.
The associated heavy rain will create localized areas of flash flooding,
affecting areas that experience rapid runoff with heavy rain. In addition,
onshore flow from the Gulf of Mexico and the Atlantic will produce showers
and thunderstorms over parts of the Central/Western Gulf Coast and Florida.Moreover, the wave of low pressure will pull cold air over parts of the
Upper Midwest, producing moderate to heavy snow over parts of Minnesota,
extreme northern Wisconsin, and the western portions of the Upper
Peninsula of Michigan. All these areas will be near Lake Superior on
Thursday, tapering off by Friday.Meanwhile, another front will come onshore over the Pacific Northwest and
California on Wednesday, dissipating by Thursday evening. From late
Wednesday morning into Friday, the system will produce rain and
higher-elevation snow over parts of the Northwest into Northern/Central
California. On Thursday, the snow will become moderate to heavy over parts
of the Southern Cascades and Northern Intermountain Region.
President Clinton left office in January 2001 but has maintained great influence over the Democratic Party since then. With another critical Presidential election imminent, let me correctly assess his 8-year Presidency, highlighted as follows:
*Stock data, cryptocurrency, and commodity prices at the market closing
The tech-heavy Nasdaq Composite closed at a record high. The S&P 500 followed the NASDAQ’s lead but the Dow Jones Industrial Average was the only major index to close in the red, falling around 0.4%. Tech Stocks led the market gains, with Broadcom surging over 4% on news of a collaboration with Microsoft-aligned OpenAI. Investors absorbed a wave of earnings reports, with particular focus on upcoming results from tech giants. Alphabet’s highly anticipated results due after market close, are seen as a potential indicator of Big Tech’s AI investments paying off. Gold and silver prices rallied, with gold touching new highs near $2,770 per ounce. The U.S. presidential election is adding some uncertainty to markets in the final days of campaigning.
The number of CEO changes at U.S. companies rose slightly to 202 in September from 200 one month prior. It is up 23% from 164 CEO exits recorded in the same month last year, according to a report released Tuesday by global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc. So far this year, 1,652 CEOs have announced their departures, the highest year-to-date total on record, since Challenger began tracking CEO changes in 2002.
The S&P CoreLogic Case-Shiller 20-City Composite posted a year-over-year increase of 5.2% in August 2024, dropping from a 5.9% increase in the previous month. Generally, home price increases peak in March and decline for the rest of the year – so it comes as no surprise that inflation is moderating in August. Here is the perspective of CoreLogic Chief Economist Dr. Selma Hepp:
Despite much-needed optimism, brought by a sharp decline in mortgage rates in August, the boost was short lived and not enough to renew homebuyers’ interest. As a result, home prices continued to weaken relative to their seasonal trend and year-over- year gains took a step back. Nevertheless, bifurcation in housing demand and price growth remained with the West and South seeing stronger slowdown in home prices and Northeast and Midwest continuing to see home price gains remaining robust. The tale of two regions reflects significant affordability challenges in the West and South, where home price surge in recent years and high mortgage rates priced out many potential buyers, while the Northeast and Midwest continue to benefit from relative affordability and less collective increase in prices over the last few years, but also more limited for-sale inventory.
The number of job openings was little changed at 7.4 million on the last business day of September. Over the month, hires changed little at 5.6 million. The number of total separations was unchanged at 5.2 million. There is a general correlation between job openings and employment increases. The graph below shows that since March 2023, the year-over-year decline has been in a narrow range – but all the same it is a decline. One would expect that employment growth should continue to moderate IF the way job openings is counted does not include phantom job openings (and the phantom job openings are the ones being removed).
The Conference Board Consumer Confidence Index® increased in October to 108.7 (1985=100), up from 99.2 in September. Dana M. Peterson, Chief Economist at The Conference Board perspective:
Consumer confidence recorded the strongest monthly gain since March 2021, but still did not break free of the narrow range that has prevailed over the past two years. In October’s reading, all five components of the Index improved. Consumers’ assessments of current business conditions turned positive. Views on the current availability of jobs rebounded after several months of weakness, potentially reflecting better labor market data. Compared to last month, consumers were substantially more optimistic about future business conditions and remained positive about future income. Also, for the first time since July 2023, they showed some cautious optimism about future job availability. October’s increase in confidence was broad-based across all age groups and most income groups. In terms of age, confidence rose sharpest for consumers aged 35 to 54. On a six-month moving average basis, householders aged under 35 and those earning over $100K remained the most confident.
Here is a summary of headlines we are reading today:
Click on the “Read More” below to access these, other headlines, and the associated news summaries moving the markets today.
Short Range Forecast Discussion
NWS Weather Prediction Center College Park MD
Tue Oct 29 2024
Valid 12Z Tue Oct 29 2024 – 12Z Thu Oct 31 2024…Moderate to heavy snow over parts of the Northern/Central Rockies on
Tuesday……Temperatures will be 20 to 35 degrees above average over parts of the
Central Plains to the Great Lake/Ohio Valley……There is a Slight Risk of severe thunderstorms over parts of the
Middle/Lower Mississippi Valley and Central/Southern Plains on Wednesday…A wave of low pressure along a front over the Great Basin/Central Rockies
will move northeastward to the Upper Mississippi Valley by Thursday. Ahead
of the front, temperatures will be 20 to 35 degrees above average over
parts of the Central Plains to the Great Lake/Ohio Valley. A warm front
extending from the Upper Mississippi Valley to the Ohio Valley moves
northeastward into Eastern Canada by Wednesday. Ahead of the warm front,
showers and thunderstorms will develop over parts of the Great Lakes,
ending by Tuesday afternoon. On Tuesday evening, rain will develop over
parts of the Lower Great Lakes/Northeast and continue into Wednesday
afternoon.On Tuesday, a wave of low pressure will produce moderate to heavy snow
over parts of the Northern/Central Rockies and higher elevations of the
eastern Great Basin. Rain will also develop over parts of the lower
elevations of the Southwest, Great Basin, and Central Rockies.Moreover, weak onshore flow off the Pacific will produce rain over parts
of the Pacific Northwest through late Tuesday evening. Light snow will
continue on Wednesday over parts of the Northern/Central Rockies through
late Wednesday night.Meanwhile, southeasterly flow off the Gulf of Mexico will create scattered
showers and thunderstorms over parts of the Western Gulf Coast on Tuesday
into Wednesday. Similarly, easterly flow off the Atlantic will produce
showers and thunderstorms over parts of Florida through Thursday morning.Further, moist air flowing northward over the Plains will extend into the
Upper Great Lakes on Wednesday, creating showers and thunderstorms over
parts of the Northern Plains and Upper Mississippi Valley. Showers and
strong to severe thunderstorms will develop ahead of the front over parts
of the Middle Mississippi Valley to the Central/Southern Plains.
Therefore, the SPC has issued a Marginal Risk (level 1/5) of severe
thunderstorms over parts of the Middle Mississippi Valley to
Central/Southern Plains through Wednesday morning. The hazards associated
with these thunderstorms are frequent lightning, severe thunderstorm wind
gusts, hail, and a minimal threat of tornadoes.On Wednesday, showers and severe thunderstorms will develop along and
ahead of the front over parts of the Middle/Lower Mississippi Valley and
Central/Southern Plains. Therefore, the SPC has issued a Slight Risk
(level 2/5) of severe thunderstorms over these areas from Wednesday
through Thursday morning. The hazards associated with these thunderstorms
are frequent lightning, severe thunderstorm wind gusts, hail, and a few
tornadoes.Furthermore, moderate to heavy rain will develop along the front parts of
the Mississippi Valley and the Central/Southern Plains. Therefore, the WPC
has issued a Marginal Risk (level 1/4) of excessive rainfall over parts of
the Mississippi Valley and parts of the Central/Southern Plains from
Wednesday through Thursday morning. The associated heavy rain will create
localized areas of flash flooding, affecting areas that experience rapid
runoff with heavy rain.Elsewhere, another front will come onshore over the Pacific Northwest and
California on Wednesday into early Thursday morning. The system will
produce rain and higher-elevation snow over parts of the Northwest into
Northern/Central California.
*Stock data, cryptocurrency, and commodity prices at the market closing
US stocks experienced a notable rise on Monday, marking the beginning of a significant week filled with major earnings reports from tech giants, an inflation update, and a crucial jobs report. This week is pivotal as five of the “Magnificent Seven” companies—Alphabet, Apple, Amazon, Microsoft, and Meta—are set to release their earnings reports. Investors are particularly focused on how these companies’ investments in artificial intelligence (AI) are translating into profits, as they collectively represent a significant portion of the S&P 500’s performance. Alongside earnings, investors are preparing for key economic data, including the Federal Reserve’s preferred inflation gauge and the October jobs report. These figures will be crucial for determining future interest rate decisions. Oil prices fell sharply, with futures dropping about 6%, the largest single-day decline in over two years. This drop followed Israel’s limited military actions in Iran, which did not target oil facilities, alleviating some market fears. Amidst these market movements, Trump Media & Technology Group stock surged by up to 20% following Donald Trump’s controversial rally in Manhattan over the weekend.
The Texas Fed Manufacturing Index in October 2024 is the highest it has been in two years rising 18 points to 14.6. This comes with new orders, unfilled orders, and employment in negative territory. The positive elements of the index are inflationary such as inventory and prices paid. I am not a fan of surveys – and there is no indication that the recession in manufacturing has ended in Texas (or the US for that matter).
Here is a summary of headlines we are reading today:
Click on the “Read More” below to access these, other headlines, and the associated news summaries moving the markets today.
Short Range Forecast Discussion
NWS Weather Prediction Center College Park MD
Mon Oct 28 2024
Valid 12Z Mon Oct 28 2024 – 12Z Wed Oct 30 2024…Moderate to heavy snow over parts of the Northern/Central Rockies on
Tuesday……Temperatures will be 20 to 30 degrees above average over parts of the
Plains and Mississippi Valley……There is a Marginal Risk of severe thunderstorms over parts of the
Upper/Middle Mississippi Valley and Central/Southern Plains on Tuesday…A front extending from the Northern Plains to the Great Basin and Southern
California will move eastward to the Upper Mississippi Valley/Upper Great
Lakes southwestward to the Southern High Plains by Wednesday. Ahead of the
front, temperatures will be 20 to 30 degrees above average over parts of
the Plains and Mississippi Valley.In the wake of the front, onshore flow off the Pacific will produce rain
over the Pacific Northwest and Northern California through Tuesday night.
In addition, scattered light snow will develop over the highest elevations
of the Cascades, the Sierra Nevada Mountains, the Northern Intermountain
Region, and the Great Basin through Wednesday. Lower-elevation rain will
also develop over parts of the Great Basin, Southwest, and
Northern/Central Rockies.Further, intensifying upper-level energy over the Four Corners Region will
aid in producing moderate to heavy snow over parts of the Northern/Central
Rockies and higher elevations of the eastern Great Basin on Tuesday.Meanwhile, southeasterly flow off the Gulf of Mexico will create scattered
rain over parts of the Western Gulf Coast on Monday. On Tuesday, the
atmosphere along the Western Gulf Coast will become more unstable, so
showers and thunderstorms will develop over parts of the Western Gulf
Coast. Similarly, easterly flow off the Atlantic will produce rain over
parts of Florida on Monday. On Tuesday, the atmosphere will become more
unstable, so showers and thunderstorms will develop over parts of Florida.Moreover, moist air will pool ahead of the front over the Great Lakes on
Monday, creating showers and thunderstorms. Rain will develop over parts
of the Northeast on Tuesday into Wednesday morning and also over parts of
the Northern/Central Plains and Upper Mississippi Valley on Tuesday.Additionally, moisture will pool along the boundary over parts of the
Upper/Middle Mississippi Valley to Central/Southern Plains, producing
strong to severe thunderstorms. Therefore, the SPC has issued a Marginal
Risk (level 1/5) of severe thunderstorms over parts of the Upper/Middle
Mississippi Valley to Central/Southern Plains from Tuesday into Wednesday
morning. The hazards associated with these thunderstorms are frequent
lightning, severe thunderstorm wind gusts, hail, and a minimal threat of
tornadoes.
Short Range Forecast Discussion
NWS Weather Prediction Center College Park MD
Sun Oct 27 2024
Valid 12Z Sun Oct 27 2024 – 12Z Tue Oct 29 2024…Scattered light rain will develop over the Carolinas…
…Rain and higher elevation snow over parts of the Northeast Sunday
night……Rain moves into the Northwest and light snow over the higher elevations
of the Western States…A front lingering along the Gulf Coast States will slowly dissipate by
Monday. Upper-level impulses over the Ohio and Lower Mississippi Valleys
will produce scattered rain over parts of the Lower Mississippi Valley
through late Sunday morning. In addition, upper-level dynamics will
develop light rain over parts of the Carolinas early Sunday through early
Monday morning. Furthermore, onshore flow off the Atlantic will create
scattered rain over parts of Florida from Monday afternoon through Tuesday.Meanwhile, a front over the Pacific Northwest will move inland to the
Upper Mississippi Valley to the Central Plains and then to the Southwest
by Tuesday. The storm will produce rain over parts of the Pacific
Northwest and Northern California through Sunday afternoon. Onshore flow
off the Pacific will produce rain over the Pacific Northwest and Northern
California through Monday night. As the front passes over the Northwest
into the Great Basin, scattered light snow will develop over the highest
elevations of the Cascades, the Sierra Nevada Mountains, the Northern
Intermountain Region, and the Great Basin through Tuesday.As the leading edge of the boundary moves into the Upper Midwest, rain
with embedded thunderstorms will develop over parts of the Great Lakes
from Monday evening into Tuesday. Furthermore, ahead of the front,
temperatures will be 10 to 25 degrees above average over the Plains.Elsewhere, a front will move southward out of Central Canada on Sunday,
advancing into the Northeast by Sunday evening and then out over the
Atlantic. This front will produce scattered rain and snow over the higher
elevations of the Northeast through early Monday morning.
This post continues the analysis of the Fed Funds Rate’s behavior during the positive inflation surges between 1951 and 2024.2 Specifically, we look at the inflation of the 1960s.
From a photo by Giorgio Trovato on Unsplash