Last week saw several key economic indicators across major economies. In the United States, the manufacturing PMI rose to 47.8 and the services PMI increased to 55.3, both exceeding expectations. However, existing home sales fell to 3.84 million, below forecasts. Unemployment claims dropped to 227,000, and U.S. oil inventories surged by 5.474 million barrels. New home sales rose to 738,000, while durable goods orders contracted by 0.8%. The Michigan consumer confidence index improved to 70.5. In the Eurozone, the manufacturing PMI rose to 45.9, but the services PMI fell to 51.2, and consumer confidence contracted to -12.5. The UK’s manufacturing PMI decreased to 50.3, and the services PMI fell to 51.8. In Canada, the central bank cut interest rates by 50 basis points to 4.75%, and retail sales declined by 0.4%. Australia’s manufacturing PMI matched the previous reading at 46.6, while the services PMI rose to 50.6. Japan’s manufacturing PMI fell to 49.0, and the services PMI declined to 49.3, with the Tokyo consumer price index growing by 1.8%. In China, banks reduced lending rates to support economic growth.
Market Analysis
U.S. Dollar vs. Canadian Dollar
The Bank of Canada cut interest rates by 50 basis points, from 5.25% to 4.75%, in line with market expectations. This marks the fourth consecutive cut this year, following three reductions of 25 basis points each. If the pivot point of 1.3860 for the U.S. dollar against the Canadian dollar is broken, there is a possibility of targeting support levels of 1.3822, 1.3757, and 1.3720. If the pivot point is exceeded, resistance levels of 1.3925, 1.3962, and 1.4027 could be targeted.
Alphabet
The Alphabet stock has been trading in a horizontal range since the beginning of the month between $160 and $169, without a clear direction, whether up or down. The stock has risen about 19% since the beginning of the year. Alphabet will report its financial results tomorrow, Tuesday (forecasts mentioned below). If the pivot point of $164.62 for Alphabet stock is broken, support levels of 161.56, 159.70, and 156.64 may be targeted. If the pivot point is exceeded, resistance levels of 166.48, 169.54, and 171.40 could be targeted.
Palladium
On Friday, October 25, palladium prices reached $1,212, the highest level since December 26, 2023, amid a report that the U.S. had urged G7 countries to impose sanctions on Russian palladium exports. If the pivot point of $1,170 for palladium is broken, support levels of 1,153, 1,085, and 1,037 may be targeted. If the pivot point is exceeded, resistance levels of 1,215, 1,245, and 1,286 could be targeted.
CAC40
The CAC40 index has been trading in a horizontal range since the beginning of October this year between 7,420 and 7,655 points, without a clear direction, whether up or down. If the pivot point of 7,578 for CAC40 is broken, support levels of 7,490, 7,346, and 7,258 may be targeted. If the pivot point is exceeded, resistance levels of 7,723, 7,811, and 7,956 could be targeted.
Key Events This Week
Markets are anticipating several important indicators and economic data this week:
- Tuesday: U.S. consumer confidence and job openings indices.
- Wednesday: Australian consumer price index, Eurozone GDP, ADP non-farm private employment change, and U.S. crude oil inventory.
- Thursday: The Bank of Japan’s interest rate decision is expected to remain at 0.25%. Additionally, Japan will release industrial production and retail sales indices, Australia will release retail sales data, China will release both manufacturing and non-manufacturing PMIs, Eurozone’s CPI and unemployment rate, US’s Core PCE and initial unemployment claims, and Canada’s GDP.
- Friday: Australia’s building permits, producer price index, Caixin manufacturing PMI from China, Switzerland’s retail sales and consumer price indices, U.S. non-farm payroll report, unemployment rate, hourly wage growth, and ISM manufacturing PMI.
Financial Results of Major U.S. Companies
Markets are awaiting the third-quarter financial results from U.S. companies this week, including:
Tuesday:
- Alphabet: Expected to report earnings of $1.84 per share, up from $1.55 in the previous reading. Revenue is expected to reach $86.37 billion, compared to $76.69 billion previously.
- Visa: Expected to report earnings of $2.58 per share, up from $2.33 previously. Revenue is expected to reach $9.49 billion, compared to $8.60 billion previously.
- AMD: Expected to report earnings of $0.92 per share, up from $0.70 previously. Revenue is expected to reach $6.71 billion, compared to $5.80 billion previously.
- McDonald’s: Expected to report earnings of $3.20 per share, up from $3.17 previously. Revenue is expected to reach $6.82 billion, compared to $6.67 billion previously.
Wednesday:
- Microsoft: Expected to report earnings of $3.10 per share, up from $2.99 previously. Revenue is expected to reach $64.55 billion, compared to $56.50 billion previously.
- Meta: Expected to report earnings of $5.21 per share, up from $4.39 previously. Revenue is expected to reach $40.18 billion, compared to $34.15 billion previously.
Thursday:
- Apple: Expected to report earnings of $1.60 per share, up from $1.46 previously. Revenue is expected to reach $94.40 billion, compared to $89.50 billion previously.
- Amazon: Expected to report earnings of $1.14 per share, up from $0.94 previously. Revenue is expected to reach $157.25 billion, compared to $143.10 billion previously.
- Mastercard: Expected to report earnings of $3.74 per share, up from $3.39 previously. Revenue is expected to reach $7.26 billion.
Friday:
- Exxon Mobil: Expected to report earnings of $1.90 per share, down from $2.25 previously. Revenue is expected to reach $94.55 billion, compared to $90.76 billion previously.
- Chevron: Expected to report earnings of $2.45 per share, down from $3.05 previously. Revenue is expected to reach $48.90 billion, compared to $54.08 billion previously.
Please note that this analysis is provided for informational purposes only and should not be considered as investment advice. All trading involves risk.
