Global Market News

Global Equities Decline

Global equities declined this week with the Dow Jones and S&P 500 dropping 2.68% and 0.96%, respectively, while the Nasdaq lowered only slightly by 0.16%. The US 10-year Treasury note rose several basis points, closing the week at 4.24%. The price of a barrel of West Texas Intermediate crude oil gained more than 3% to back above the $70 mark, closing at $71.58 on Friday. Volatility, as measured by the CBOE Volatility Index, increased over the week to 20.33. Volatility is expected to be elevated over the next couple of weeks as investors anticipate next week’s US employment report followed by the US presidential election.

IMF Reports “steady but underwhelming” Global Growth

This week, the International Monetary Fund (IMF) updated its world economic outlook, lowering its global forecast for next year due to accelerating risks from wars to trade protectionism. The group expects the global economy to grow 3.4% in 2024 and 2025, falling below the pre-pandemic average of 3.8% per year. While the growth outlook for the US has been raised to 2.8% in 2024, the outlook for other large, developed economies has been downgraded. The IMF also warned that global public debt is expected to reach $100 trillion, equivalent to 93% of GDP, by the end of this year.

Updated Market Figures

International Developments

North Korean Troops to Russia Amidst BRICS Summit

US officials reported that North Korean troops were likely heading to Russia’s Kursk region to assist Moscow against Ukrainian forces, which launched an offensive there in August. Their exact role is unclear, but estimates suggest their numbers could reach 10,000 by December, raising concerns among the US, South Korean, and Japanese officials about the impact on global security and potential conflict escalation. Meanwhile, at the BRICS summit in Kazan, Russia, from October 22nd to 24th, President Vladimir Putin sought to position Russia as a leader among developing nations, criticizing Western governments and promoting an alternative global order. However, internal divisions limited progress on key issues, including a proposed payments messaging system. Analysts viewed the summit as largely symbolic, noting skepticism among BRICS members regarding Russia’s proposals and the group’s overall effectiveness in countering Western influence.

Ceasefire Talks to Resume in Doha, IDF Strikes on Tyre

Gaza ceasefire negotiations are set to resume in Doha, with Israeli delegates expected to arrive on Sunday, though Hamas has not yet confirmed participation. US Secretary of State Antony Blinken suggested the recent death of Hamas leader Yahya Sinwar could facilitate a deal for hostages and Israeli withdrawal from Gaza. Qatar’s foreign minister confirmed renewed engagement with Hamas while Egypt has held talks with Hamas in Cairo, with Israeli Prime Minister Netanyahu welcoming Egypt’s support for a hostage deal. A previous US-proposed plan included a six-week ceasefire, humanitarian aid, and phased steps toward Gaza’s reconstruction, though Israel’s request for a presence along the Gaza-Egypt border remains a sticking point. Meanwhile, on October 23rd, Israel conducted multiple air strikes on the southern Lebanese city of Tyre, targeting Hezbollah command centers near UNESCO-listed Roman ruins, leading to significant destruction but no reported casualties; this followed an evacuation order that prompted tens of thousands of residents to flee amid escalating conflict in the region.

Scholz and Modi Discuss Economic Ties and Future Partnerships

German Chancellor Olaf Scholz arrived in New Delhi on October 24th, to co-chair the 7th Intergovernmental Consultations (IGC) with Indian Prime Minister Narendra Modi, focusing on enhancing economic, defense, and technological partnerships. Scholz’s visit follows Germany’s recent “Focus on India” policy paper, highlighting India as a key partner amid shifting geopolitical dynamics, namely as Germany attempts to diversify its economy from China. The IGC, running alongside the Asia Pacific Conference of German Business, will bring together 650 leaders, including German Economy Minister Robert Habeck, for discussions on talent mobility, green development, and economic ties. Scholz’s visit is seen as a potential “turning point” in India-German relations, according to experts, shaped by global challenges such as the Ukraine conflict.

US Social & Political Developments

Microsoft Warns about Foreign Interference Targeting US Election

On October 24, 2024, Microsoft reported an expected escalation in foreign interference targeting US elections, highlighting coordinated campaigns from Russia, China, and Iran. Russian actors are using AI-generated content to discredit Vice President Kamala Harris, while Chinese campaigns focus on influencing down-ballot races with candidates who are critical of China. Meanwhile, Iranian influence operations appear centered on exploiting divisions over the Israel-Hamas conflict and preparing for potential schemes against election-related websites. Although election infrastructure security is deemed robust, Microsoft and US intelligence officials emphasize the risks these influence campaigns pose to public perception and post-election stability.

Republicans Make Gains in Early Voting

Republicans have cut into Democrats’ early voting advantage, particularly in battleground states like Pennsylvania, North Carolina, Nevada, and Arizona. This shift follows a strategy by Donald Trump’s campaign to boost early voting among Republicans, contrasting with 2020 when Trump’s rhetoric led many to vote on Election Day. With less than two weeks left, Democrats now hold a 7-point early-vote lead, reduced from a 14-point lead at this point in the 2020 election. Experts caution against drawing definitive conclusions, noting variables like upcoming Democratic turnout efforts and potential changes in Election Day voting dynamics.

Boeing Strike Continues

Boeing’s largest union, the International Association of Machinists and Aerospace Workers, rejected a second contract offer on October 23rd, with 64% voting against it, thereby extending a six-week strike. The rejection came hours after Boeing reported a $6.1 billion loss, reflecting growing financial and operational challenges, including halted production of the 737 Max. The company’s recent offer included a 40% wage increase over four years, a $7,000 bonus, and retirement contributions, but did not restore the defined-benefit pension—a critical issue for union members. This ongoing strike, costing millions daily, threatens Boeing’s efforts to rebuild its image under CEO Kelly Ortberg and may impact broader supplier networks.

Gold Reaches All-Time High

On October 23rd, spot gold reached an all-time high of $2,755.30 per ounce amid global economic uncertainties, including the upcoming US elections and international geopolitical tensions. US gold futures rose by 0.3% to $2,768.40, while the yield on the 10-year US Treasury note reached a three-month high of 4.244%, as investors anticipate a potential interest rate cut by the Federal Reserve. The bullish trend in gold, up 33% for the year, continued despite the strengthening US dollar, which also pressured currencies like the yen and euro. Meanwhile, spot silver decreased slightly to $34.68 per ounce after reaching its highest level since 2012 of $34.87.

Tesla Stock Surges 22% Friday

Tesla stock surged 22% on Friday, reaching $265.96 per share, driven by better-than-expected third-quarter earnings, with profits of 72 cents per share surpassing Wall Street’s forecast of 60 cents. Following the report, analysts, including Stephan Gengaro and Alexander Potter, raised Tesla’s price targets, boosting sentiment around its growth, with CEO Elon Musk projecting delivery growth of up to 30% for 2025. Historical patterns suggest that big single-day gains often lead to further stock increases, with previous cases showing additional growth of up to 141% over three months. Tesla now faces the $270 resistance level, which analysts say could influence investor sentiment and challenge bearish outlooks if surpassed.

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Source: Wall Street Journal