S&P 500 Edges Up; Alphabet Shares Rally — WSJ

European stock markets closed sharply lower in Wednesday trading as The Stoxx Europe 600 lost 1.08%, the Swiss Market Index dropped 1.05%, France's CAC fell 1.01%, the FTSE in London was down 0.53%, and Germany's DAX closed 0.96% lower.

The UK government raised its economic growth forecast for 2024 and 2025 in its annual budget released Wednesday. The Office for Budget Responsibility said it expects 2024 GDP growth of 1.1%, up from previous guidance of 0.8%, and 2025 GDP growth of 2%, slightly higher than its prior forecast of 1.9%. However, it also said it expects weaker GDP growth between 2026 and 2028.

Seasonally adjusted GDP increased 0.4% in Q3 in the euro area and 0.3% in the European Union, compared with the previous quarter, according to a preliminary estimate from Eurostat, the statistical office of the EU. Compared with a year earlier, the seasonally adjusted GDP increased 0.9% in the euro area and in the EU in Q3.

In Germany, GDP grew 0.2% in Q3 compared with both Q2 and the year-ago quarter, adjusted for price, seasonal and calendar effects, according to the Federal Statistical Office. The FSO also reported that it expects an inflation rate of 0.4% in Q3 compared with the previous quarter, and 2% compared with the year-ago quarter.

In France, GDP rose 0.4% in Q2 after rising 0.2% the previous quarter, aided by the Paris Olympic and Paralympic Games, according to the National Institute of Statistics and Economic Studies

In Spain, inflation for October will be an estimated 1.8%, compared with 1.5% the previous quarter, with an annual inflation of 2.5%, according to Spain's National Statistics Institute, which attributed the increase primarily to rising fuel prices.

And in corporate news, British pharmaceutical company GSK reported Q3 core earnings Wednesday of 0.497 British pounds ($0.65) per share, down from 0.504 pounds a year earlier. Analysts polled by Capital IQ expected 0.43 pounds. Turnover, or sales, for the quarter ended Sept. 30 was 8.01 billion pounds, down from 8.15 billion pounds a year earlier. Analysts surveyed by Capital IQ expected 8 billion pounds. Shares of GSK dropped 2.8% in London trading.

European automaker Stellantis' Chrysler subsidiary will recall 33,777 model year 2025 Ram 1500 pickup trucks due to problems with the vehicle's electronic stability control system, documents on the US National Highway Traffic Safety Administration's website showed Wednesday.

AstraZeneca said Wednesday that AstraZeneca China President Leon Wang is under investigation and cooperating with a probe by Chinese authorities. "Our China operations continue under the leadership of the current General Manager of AstraZeneca China," the British pharmaceutical company said in a statement, adding it plans to "fully cooperate" with the probe if requested.

U.S. Economic Growth Extends Solid Streak

The U.S. economy grew at a slightly slower pace this summer, although consumer spending remained strong.

U.S. Hiring Surged in October, Thanks Partly to Hurricane Relief

The private sector added 233,000 jobs in October, accelerating from 143,000 a month prior and outstripping economists' forecasts by nearly double.

S&P 500 Edges Up as Alphabet Shares Rally

U.S. stock indexes edged higher while the Dow industrials were little changed following preliminary GDP data that indicated the U.S. economy continued growing.

Eurozone Expands Faster Than Expected, Raising Hopes of Soft Landing

The eurozone's economy grew more rapidly than expected in the three months to the end of September, a boost to hopes that the bloc is set for a soft landing from the surge in inflation that followed Russia's invasion of Ukraine.

Britain's Labour Party Bets on Big Taxes, Borrowing to Boost Economy

The U.K.'s new government presented its plan to jolt the country out of years of moribund growth: more taxes and a bigger state.

Mortgage rates rise to highest level since July due to these 3 reasons

Mortgage applications fell 0.1% in the last week, the Mortgage Bankers Association said.

Berkshire Partners Raises $7.8 Billion for Midmarket Deals

Berkshire Partners has raised its largest fund ever, collecting about $7.8 billion for its 11th flagship fund, the Boston-based private-equity firm said Wednesday.

Supply Chain Woes Carry High Risks, Big Rewards for Some Companies

Supply chains that underpin the economy are facing ongoing stress from geopolitical tension, labor disruption and natural disasters. Some companies say they're gaining an edge in their markets with tools aimed at managing the risks, but it doesn't come cheap or easy.

China Beige Book Sees Economy Perking Up. But Not Where It Counts Most.

Investors have been keeping a close eye on China's economy as data has largely been glum-showing deflationary pressures and a weak jobs market.

AXA Investment Managers Expects Capital to Flow to European Credit Market Amid U.S. Uncertainty

More money is set to flow into European assets and away from American ones as political uncertainty clouds the U.S. policy outlook ahead of the presidential election, AXA Investment Managers said.

The dollar index today is down -0.27%. Strength in the euro is weighing on the dollar on today’s news that Eurozone Q3 GDP grew more than expected. The dollar added to its losses after T-note yields fell when US Q3 GDP grew less than expected. Losses in the dollar are limited after the US Oct ADP employment report posted its largest increase in 15 months, a hawkish factor for Fed policy. Also, Sep pending home sales posted their largest increase in 4-1/4 years.

The US Oct ADP employment change rose +233,000, showing a stronger labor market than expectations of +111,000 and the biggest increase in 15 months.

US Q3 GDP grew by +2.8% (q/q annualized), slightly weaker than expectations of +2.9%. Q3 personal consumption rose +3.7%, stronger than expectations of +3.3%, and the Q3 core PCE price index eased to +2.2% from 2.8% in Q2.

US Sep pending home sales rose +7.4% m/m, stronger than expectations of +1.9% m/m and the largest increase in 4-1/4 years.

The markets are discounting the chances at 96% for a -25 bp rate cut at the November 6-7 FOMC meeting and at 0% for a -50 bp rate cut at that meeting.

EUR/USD is down by -0.07%. The yen today is slightly stronger as T-note yields fall. Also, position squaring ahead of Thursday’s BOJ meeting supported the yen, although the BOJ is expected to keep interest rates unchanged. Strength in the yen is limited after the Japan Oct consumer confidence index fell more than expected to a 5-month low. The yen continues to see weakness from Japanese political uncertainty after the LDP-led coalition lost its majority in the lower house of Parliament in this past weekend's election.

December gold (GCZ24) is up +8.50 (+0.31%), and December silver (SIZ24) is down -0.501 (-1.45%). Precious metals today are mixed, with Dec gold posting a new contract high and nearest-futures (X24) gold posting a record high of $2,787.50 per ounce. A weaker dollar and lower global bond yields today are supportive for precious metals. Gold is also climbing on safe-haven demand from US political uncertainty ahead of next Tuesday's US election. In addition, there is also Japanese political uncertainty after the ruling LDP lost its majority in the lower house in this past weekend's election.

Signs of strong global demand for gold are supporting gold prices after the World Gold Council reported today that Q3 global gold demand rose +5% y/y to a record and that global gold consumption rose above $100 billion for the first time. Silver prices were undercut after US Q3 GDP grew less than expected, which was a negative factor for industrial metals demand.

On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policyhere.