The PULSE: Global Economic and Market News for Thursday, November 21st

As of Thursday, November 21, 2024, the global economy presents a complex landscape characterized by fluctuating home sales, persistent inflationary pressures, significant developments in China and the UK, corporate earnings reports from major retailers like Walmart, and strategic decisions by the Federal Reserve.

Home Sales

In October, U.S. existing home sales experienced a notable rebound, increasing by 3.4% to an annual rate of 3.96 million units. This marks the first annual gain since mid-2021, surpassing economists' forecasts. The uptick is attributed to buyers capitalizing on a temporary dip in mortgage rates, with contracts likely signed in August and September ahead of the Federal Reserve's policy easing cycle. However, mortgage rates have since risen, reaching 6.78% last week, potentially tempering future sales momentum. Reuters

Inflation

Inflation remains a central concern for policymakers and consumers alike. The Federal Reserve has signaled a more cautious approach to rate cuts, suggesting fewer reductions than anticipated due to stronger-than-expected economic data and potential inflationary impacts from proposed policies under President-elect Donald Trump. This adjustment could result in high consumer and business borrowing costs, influencing spending and investment decisions. Associated Press

China

China's economic trajectory continues to be a focal point for global markets. Recent data indicates a slowdown in trade activity, with exports and imports showing signs of weakening. The real estate sector faces ongoing challenges, with property prices experiencing downward pressure amid efforts to deleverage and stabilize the market. Given China's role as a major consumer and producer, these developments have significant implications for global supply chains and commodity markets.

United Kingdom

The UK economy is navigating a period of uncertainty influenced by global power shifts and domestic policy decisions. Recent data reveals that British inflation has exceeded forecasts, potentially impacting the Bank of England's future interest rate decisions. Additionally, the UK must focus on growth, productivity, and building ties with major economies like China and the U.S. to maintain its competitive position amid rising protectionism and shifting global dynamics. The Times

Walmart

Walmart has reported better-than-expected earnings, with a 5.3% increase in third-quarter same-store sales in the U.S. and a 22% growth in e-commerce sales. The retailer has raised its profit outlook, attributing the positive performance to cost-conscious shoppers seeking value amid lingering inflation. However, Walmart warns that potential tariffs from the incoming administration could lead to price increases, which may affect consumer behavior and sales dynamics in the coming months. New York Post

Federal Reserve

The Federal Reserve's recent communications suggest a slowdown in rate cuts, reflecting concerns over inflation and the potential economic impacts of proposed policies under the new administration. This cautious stance aims to balance the need for economic growth with the imperative to maintain price stability, acknowledging the complexities introduced by evolving fiscal policies and global economic conditions. Associated Press

In summary, the global economic environment as of November 21, 2024, is marked by a mix of resilience and emerging challenges. Key indicators such as home sales and corporate earnings show positive trends, while policymakers and market participants must carefully navigate inflationary pressures and geopolitical developments.

Sources:

•               U.S. Existing Home Sales: https://www.reuters.com/markets/us/us-existing-home-sales-rebound-october-2024-11-21/

•               Inflation and Federal Reserve Strategy: https://www.weforum.org/stories/2024/11/world-awaits-us-election-result-global-economy-news/

•               UK Economy: https://www.thetimes.co.uk/article/from-east-and-west-the-uk-economy-is-exposed-to-global-power-shifts-5b0v00btr

•               Walmart Earnings: https://www.marketwatch.com/story/existing-home-sales-rise-in-october-but-remain-at-a-low-level-3539eaca

•               Federal Reserve Policy: https://kpmg.com/us/en/articles/2024/november-2024-economic-compass.html

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