John Hancock: Weekly Market Recap Week Ended October 30
Fed on hold
In a 10-2 board vote, the U.S. Federal Reserve kept its benchmark rate unchanged, opting to hold steady following a September vote in which the Fed lifted the rate for the first time since 2023. As for the next policy meeting, Friday’s trading in rate futures markets implied a roughly 73% probability that the Fed will approve another quarter-point rate hike on December 9, versus a 27% probability of keeping rates unchanged, according to CME FedWatch.
Earnings upgrade
With earnings season more than halfway over, full-season expectations rose modestly even as big technology companies reported mixed results. As of Friday, analysts projected that third-quarter earnings for companies in the S&P 500 rose 30.2%, up from a forecast of 29.5% the previous week, according to FactSet. Such an outcome would mark the third consecutive quarter of earnings growth exceeding 25%.
GDP momentum
The U.S. government’s initial estimate of third-quarter GDP delivered a positive surprise, with growth estimated at an annual rate of 3.4% versus economists’ consensus estimate of 3.1%. The growth figure also marked an increase from the second quarter’s 2.2% GDP number.
Jobs ahead
A monthly labor market report due out on Friday will show whether September’s sluggish jobs growth extended into October. September’s report showed a monthly gain of 29,000 jobs—well below consensus expectations—and initial estimates for the previous two months were adjusted downward by a combined 60,000 jobs. September’s unemployment rate was 4.2%, up from 4.1% in August.
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