Tuesday's Markets Update (October 1, 2024)

02 Oct 2024 by rate3

On Tuesday, stocks fell due to Iran's missile strikes on Israel and disappointing economic data. Job openings rose, manufacturing activity remained stagnant, and tech stocks declined, while energy and defense stocks gained. Internationally, Eurozone inflation and manufacturing activity slipped to their lowest levels in years, pointing to stagnation. Oil, gold and the dollar rose as tensions in the Middle East escalated. BTC and ETH dropped sharply to 61K and 2.4K, respectively, as traders sold off a wide range of risky assets.

Details

The ISM Manufacturing PMI remained at 47.2 in September, indicating continued contraction in the sector. Demand, output, and new orders declined, while prices eased and supplier deliveries slowed. The survey committee chair cited weak demand due to federal policies and election uncertainty as factors contributing to the contraction. 1Y trend: "Side" (ISM)
The number of job openings in the US increased by 329K in August to 8.04M, exceeding expectations. Job openings rose in construction and government but fell in other services. The number of hires and separations remained relatively stable, while job quits decreased to the lowest level since August 2020. 1Y trend: "Down" (BLS)
The Dallas Fed’s business activity index for Texas' service sector improved in September, though it remained negative. Revenue increased to its highest level in over a year, while employment remained steady. Companies’ outlook and input price pressures improved, but wage growth slowed. Respondents were more optimistic about future business activity. 1Y trend: "Up"

Crypto

World Markets

The HCOB Eurozone Manufacturing PMI was revised up slightly in September (to 45 from 44.8, compare to 45.8 in the previous 2 months) but remained the lowest this year, indicating a deeper manufacturing contraction. Demand fell sharply, leading to lower output and job cuts. Input costs decreased, while selling prices rose. There were significant differences between countries. 1Y trend: "Up" (PMI)
The annual inflation rate in the Eurozone decreased to 1.8% in September 2024, down from 2.2% in August. This is the lowest rate since April 2021 and below the ECB's target of 2%. Prices fell more for energy and slowed for services, while food prices increased slightly. Core inflation also eased. Inflation is expected to rise again later in 2024 and then decline towards 2% in 2025. 1Y trend: "Down" (EC)
The German manufacturing sector experienced a significant decline in September, with the PMI falling to the lowest point in a year. New orders, output, and employment all decreased, driven by factors like market uncertainty, destocking, and weakness in the auto industry. Purchasing activity and prices also fell due to lower demand. 1Y trend: "Side" (PMI)
The Russia Manufacturing PMI fell to 49.5 in September, indicating a decline in factory activity first time since April 2022. Output, new orders, and employment all contracted. While foreign sales increased, domestic demand and supplier delays caused disruptions. Job losses accelerated, and backlogs of work decreased. Purchasing activity slowed, and input and output costs rose. Selling prices increased due to higher costs. Business sentiment worsened. 1Y trend: "Up" (PMI)

Currencies

The dollar strengthened to 101 as investors sought safe havens due to rising tensions between Iran and Israel. While the manufacturing sector contracted, job openings increased, and the Fed hinted at slower interest rate cuts. 1Y trend: "Side"

Commodities

>WTI crude oil prices rose 3% to $70 per barrel after Iran attacked Israel. The oil market's reaction depends on the attack's scope and damage. Libya is preparing to restart oil production after resolving internal conflicts. Libya produces 1.2 million barrels daily, but production fell to 450K barrels in August due to political instability. 1Y trend: "Side"
Gold prices surged over 1%, reaching $2.66K per ounce, driven by safe-haven demand amid escalating tensions in the Middle East. However, Powell's recent remarks tempered gold's gains, suggesting that future rate cuts would likely be smaller. 1Y trend: "Up"