Rover's Weekly Market Brief - 10/27/2023

Introducing the Trade Evaluator

This week we want to highlight the Trade Evaluator, which is a brand-new facility in Stock Rover V10 that shows you in detail how your trading decisions (buy and sells) have performed, answering the question was this trade a good idea or not?

The Trade Evaluator is very easy to use. You can read a quick blurb about it in our V10 announcement or get more detailed information in our help pages.

Economy

S&P Global reported that its flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, rose to 51.0 in October from 50.2 in September. The reading marks the fastest expansion since July and is indicative of an uptick in private sector output. The S&P Global Manufacturing PMI reported in at 50, the highest value in six months, and up slightly from September’s 49.8 reading. The Manufacturing PMI reading signaled that operating conditions at manufacturing firms had stabilized. The S&P Global U.S. Services PMI increased to 50.9, from 50.1 in September, marking a 3-month high – as service providers saw a slower drop in new orders. Employment figures showed businesses continuing to hire in October, but at a slower pace than the previous month. Employment figured were bolstered by service providers, conversely manufacturing firms showed a slight drop in staffing. This is the first decline in manufacturing jobs seen since July 2020. The S&P Global report indicated a notable reduction in inflationary pressures as the rates of increase in input costs and output charges slowed to their slowest rate in three years. The muted rise in costs was led by service providers. However, increases in oil prices, drove the manufacturing sector to record the sharpest uptick in input prices since April.

The U.S. Census Bureau reported new home sales increased 12.3% in September, this marks a 19-month high. New home sales for the previous month were upwardly revised to 676,000. Monthly sales increased across all regions, led by the Northeast (+22.5%), South (+14.6%), West (+7.5%), and Midwest (+4.7%). September’s seasonally adjusted rate was 759,000 units, showing a (+33.9%) increase year-over-year. The regional year-over-year figures were all in positive territory, led by the Northeast (+63.3%), West (+53.3%), South (+29.9%), and Midwest (+4.7%). The median new house price was (-12.33%) lower than last year at $418,800. The average sale price was (-11.39%) lower than last year at $503,900. Sixty-three percent of new homes sold were in the $150,000 to $499,999 price range. There were 435,000 new homes for sale at the end of September, down from 432,000 units in August. This represents a 6.9 months’ supply at the current sales rate. Year-over-year, new homes for sale were down (-5.43%). Houses under construction made up roughly 46% of the September new home sales, with homes not started accounting for 15%, and completed homes accounting for about 39%.

The Commerce Department’s first estimate on the third-quarter gross domestic product (GDP) growth reported the economy expanded at an annual rate of 4.9%. The first estimate is well over the 2.1% growth rate set in the second quarter and marks the biggest gain since Q4 2021. Much of the increase can be attributed to a jump in consumer spending which accounts for over two-thirds of the U.S. economy. Increases in inventories, exports, residential investment and government spending were all factors. Consumer spending, as measured by personal consumption expenditures, jumped (+4.0%) in Q3 and follows (+0.8%) reading in Q2. Consumer spending was responsible for 2.69 percentage points (pp) of the total GDP increase. The increase in PCE was driven by spending on services (+3.6%), which added (1.62 pp) to the GDP, while spending on goods increased (+4.8%), adding (1.08 pp). Business investment added (1.47 pp) to GDP, with private inventories adding (1.32 pp). Exports increased (+6.2%) adding (0.68 pp) to GDP while imports increased (+5.7%) subtracting (0.75 pp). Residential spending was up (+3.9%) and added (0.15 pp). Government spending jumped (+4.6%) in Q3, adding (0.79 pp) to GDP. Federal government spending added (0.39 pp) and state-local spending added (0.40 pp) to GDP.

Upcoming Economic Reports:

Wednesday November 1 – Fed Interest Rate Decision

Friday November 3 – Unemployment Rate (October)

Earnings Calendar:

 

Monday	Tuesday	Wednesday	Thursday	Friday
Loews (L)	Advanced Micro Devices (AMD)	CVS Health (CVS)	Apple (AAPL)	Berkshire Hathaway (BRK.A)
McDonald’s (MCD)	Pfizer (PFE)	Qualcomm (QCOM)	Eli Lilly (LLY)	Enbridge (ENB)