Market Review: October 15, 2024

Today’s data presents mixed signals for the U.S. economy. The NY Empire State Manufacturing Index shows a steep decline, signaling deteriorating business conditions in the manufacturing sector. In contrast, the NY Fed's 1-Year Consumer Inflation Expectations remained unchanged, suggesting stable inflation expectations among consumers.

Today's Event Overview



• NY Empire State Manufacturing Index (Oct): The index plummeted to -11.9, far below the forecast of 3.4 and the previous 11.5. This decline reflects worsening manufacturing activity and raises concerns about the overall health of the U.S. economy.
• NY Fed 1-Year Consumer Inflation Expectations (Sep): The reading remained steady at 3.00%, unchanged from the previous month. This stability indicates that consumers' short-term inflation expectations are not increasing despite recent inflation pressures.

Impact Analysis

• Impact on USD:
  The sharp drop in the NY Empire State Manufacturing Index is bearish for the USD. It suggests slower economic growth, which reduces the likelihood of the Federal Reserve pursuing further rate hikes in the near term.
• Impact on Gold:
  Weaker manufacturing data boosts gold, as it increases economic uncertainty and encourages investors to seek safe-haven assets. However, stable inflation expectations provide no additional support for gold beyond the manufacturing index’s weakness.
• Impact on Equities Futures:
  The decline in the manufacturing index could be positive for equities in the short-term, as weaker economic data may ease pressure on the Federal Reserve to tighten monetary policy further. Stable inflation expectations also support a steady market outlook.

The significant drop in the NY Empire State Manufacturing Index highlights the challenges facing the U.S. manufacturing sector and may prompt concerns about a broader economic slowdown. However, the lack of change in inflation expectations suggests that inflation remains contained for now. Market participants will likely shift their focus to upcoming Fed announcements for further clarity on the policy outlook.