Economic Data and Market Highlights
Markets pushed higher during the week with the S&P 500 rising 1.13%. Inflation rose modestly on a month over month (0.2% vs 0.1% est.) and year over year basis (2.4% vs 2.3 est.) but slightly hotter than expected. The biggest rise occurred in motor vehicle insurance and owner’s equivalent rent while significant decreases were seen in fuel oil, gasoline and used autos. PPI was released Friday and came in below expectation, 0.0% versus and estimate of 0.1%
The data above is aggregated with the Bureau of Labor Statistics also releasing data by region with the Northeast and some Sunbelt states experience higher year over year rates while Mountain states had less significant increases.
As Florida and the Carolinas continued their clean-up from Hurricane Helene, Hurricane Milton cut across Florida. While the Milton was less severe than expected, the state still sustained significant damage from wind. Losses sustained by catastrophe bonds were less than expected but with six weeks left in Hurricane season, those risk premiums will likely increase. These costs will eventually flow through to the insurance costs businesses and residents pay whether directly in the form of premium or in property improvement. As noted above, premiums rose over 16% on a year-over-year basis.
JP Morgan released earnings on Friday with the company reporting better than expected results and raised guidance for the full year’s net interest income. JP Morgan, the biggest bank in the US, indicated that the economy is experiencing a soft landing. The report helped push the S&P 500 up 60 basis points on Friday.
In past weeks, we have noted the rise in Chinese equities as a result of stimulus announcements to get its economy moving. The market reacted positively but as China reopened after being closed multiple days due to holiday celebrations, their equity markets took a bit of a breather falling 6.99%, retracing past weeks gains. Emerging markets in aggregate, of which China is the biggest component, fell 1.66%.
The Past Week’s notable US data points
The Upcoming Week’s notable US data points
Data Source: Blackrock, Bloomberg, Charles Schwab, CNBC, Goldman Sachs, J.P. Morgan, Morningstar, MarketWatch, Standard & Poor’s, and the Wall Street Journal.
Authors:
Jon Chesshire, Managing Director, Head of Research
Michael McNamara, Analyst
Sam Morris, Analyst