Global News You Can Use

A lot happened today, so let’s try to recap all the headlines. 📰

First off, global tensions continue to rise as Russia claims the U.K. navy blew up the Nord Stream pipeline, which furthered its own energy crisis. However, London denies its involvement, and Russia did not provide any concrete evidence for its claim that a leading NATO member sabotaged its infrastructure.

Meanwhile, the U.S. is on high alert after Saudi Arabia received multiple threats from Iran. The Saudi government shared intelligence with the U.S. that warned of an imminent attack from Iran on various targets in its country. ⚠️

Tensions remain high in Brazil as the soon-to-be former president, Bolsonaro, avoids conceding to Lula in his first public remarks.

In U.S. economic news, all eyes are on tomorrow’s Fed decision and Friday’s jobs report. Ahead of those events, today’s JOLTs job openings number jumped unexpectedly, rising to 10.72 million in September. That means the labor market remains very tight, with 1.9 job openings for every available worker. Meanwhile, U.S. and global manufacturing measures both fell in October, signaling a further weakening of business activity.

Lastly, the Federal Communications Commission (FCC) believes the Council on Foreign Investment in the U.S. (CFIUS) should ban TikTok. The comment caused an initial jump in TikTok competitors like Meta and Snapchat, but those ultimately faded throughout the day. 🚫

Other than that, we’re all waiting for tomorrow’s Federal Reserve interest rate decision, where most expect another 75 bp hike.

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Diving Into December CPI

The market had been pricing in some aggressive rate cut expectations for 2024, looking for as many as six cuts from the Federal Reserve. However, with last month’s employment data coming in pretty strong, there is a lot of riding on the first month or two of data this year. 📝

Unfortunately for stock market bulls and rate-cut enthusiasts, today’s consumer price index (CPI) data did not help their case.

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A Divergence In Homebuilders

Today’s National Association of Home Builders/Wells Fargo Housing Market Index experienced its first negative reading in seven months. 🔻

The index dropped 5 points to 45 in September, with all three components declining. Current sales conditions slipped to 51, sales expectations in the next six months fell to 49, and buyer traffic dropped to 30.

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The War On Inflation Is Won

It wouldn’t be an inflation data day without some drama, so let’s get into what happened. 👇

First off, the headline consumer price index (CPI) rose 0.4% MoM and 3.7% YoY. That was ten bps above estimates, driven primarily by higher energy prices. As for core consumer prices, they rose 0.3% MoM and 4.1% YoY, as expected.

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Stocks Jump As Jobs Slump

If you’re confused about why the stock market jumped today despite more evidence of the labor market weakening, we’ve got you covered. 👇

Earlier this week, we discussed several leading indicators suggesting the U.S. labor market is returning to pre-pandemic levels. That’s big news because a historically tight labor market has been keeping upward pressure on wages. And since wages tend to be sticky, that puts upward pressure on services inflation, which has been the hardest part of inflation to bring down.

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