Market Review: October 25, 2024

Today's data presents a moderately positive view of the U.S. economy, with improvements in Core Durable Goods Orders, consumer expectations, and consumer sentiment. Meanwhile, a slight decline in the GDPNow estimate and reduced speculative positions in oil and the S&P 500 hint at some caution among investors.

Today's Event Overview

• Core Durable Goods Orders (MoM) rose by 0.40%, stronger than expected, indicating resilience in business investment. The overall Durable Goods Orders met expectations, declining by -0.80%.

• Inflation Expectations (both 1-year and 5-year) showed stable or slightly lower figures, suggesting that inflation concerns are easing.

• Consumer Sentiment and Consumer Expectations both improved, indicating higher confidence among consumers, which may boost spending.

• Atlanta Fed GDPNow estimate for Q3 was revised down slightly to 3.30%, though it remains strong.

• CFTC Speculative Positions revealed reduced interest in crude oil and S&P 500 futures, while gold speculative interest increased, suggesting caution among investors.

Impact Analysis

• Impact on USD:
  The improvement in Core Durable Goods Orders and Consumer Sentiment is supportive of the USD, but the reduced 1-Year Inflation Expectations and slight GDP revision could soften the bullish outlook. Mixed speculative sentiment data may limit strong moves in the dollar.

• Impact on Gold:
  Gold may benefit from increased speculative interest, as reflected in the rise in CFTC Gold positions. The lower inflation expectations reduce demand for inflation hedges, but cautious investor sentiment may still support gold as a safe haven.

• Impact on Equities Futures:
  Equities futures may see mixed reactions. Stronger consumer sentiment and Core Durable Goods Orders are bullish for stocks, especially consumer-related and industrial sectors. However, reduced S&P 500 speculative positions and slight caution in growth expectations (GDPNow) could weigh on broader equity sentiment.

The data today highlights a steady U.S. economy with resilience in business investment and consumer confidence. Easing inflation expectations may support equities by reducing rate hike fears, while the increase in gold speculative positions suggests caution remains in certain investor segments.