The past week saw significant developments in the global markets. The U.S. GDP for the third quarter fell short of expectations, while the October non-farm payrolls unexpectedly dipped. The UK government unveiled its autumn budget, planning a £40 billion tax hike. As a result, U.S. stocks declined, with the Dow down 0.15%, the Nasdaq dropping 1.50%, and the S&P 500 falling 1.37%. European indices also slipped, with the FTSE 100 down 0.87%, Germany's DAX 30 down 1.07%, and France's CAC 40 falling 1.18%.
This week, the U.S. presidential election draws the most attention, with Republican Donald Trump and Democrat Kamala Harris in a close race. Additionally, the Federal Reserve's decision on potential rate cuts is pending, alongside meetings of the Reserve Bank of Australia and the Bank of England. NXP Semiconductors (NXPI), Qualcomm (QCOM), and others will release earnings this week.
The Federal Reserve is widely expected to cut rates further, with the first official election day being critical in the U.S. presidential race. Market analysts suggest that Republican policies, like tax cuts and tariffs, could slow the Fed's rate-cutting pace, affecting bond yields and the dollar. The Fed is likely to cut rates by 25 basis points at its upcoming meetings.
Important economic data such as the ISM services index and the University of Michigan consumer sentiment index will be released. Analysts view weak employment in October as influenced by temporary factors like hurricanes, which should not heavily impact the Fed's economic outlook.
Key earnings reports are due from companies like NXP Semiconductors (NXPI), Qualcomm (QCOM), and CVS Health (CVS), among others. These results come as the reporting season progresses.
In commodities, oil prices resumed their decline. WTI crude fell 3.19% to $69.49 per barrel, and Brent crude dropped 3.35% to $73.10 per barrel. Geopolitical tensions remain high, but market sentiment has eased somewhat after Israel avoided oil facilities in recent strikes on Iran. Gold prices hit record highs before retreating, with December COMEX futures down 0.13% to $2738.60 an ounce, driven by election uncertainties and potential Fed rate cuts.
In Europe, economic data showed the eurozone's recovery, with Germany avoiding recession. The eurozone's CPI rose by 2.0% year-on-year, aligning with ECB targets, signaling potential further rate cuts. The UK Chancellor's £40 billion tax increase plan has heightened fiscal pressure. The Bank of England's meeting may see a 25-basis-point rate cut, with financial markets leaning towards more easing if inflation trends continue positively.
