The PULSE: Global Economic and Market Summary – November 19, 2024

The global economic landscape shows mixed signals as markets react to corporate earnings, geopolitical developments, and financial data. Here's a detailed summary:

Consumer Credit Trends

Consumer credit in the U.S. has grown steadily but slower, reflecting cautious spending behavior.

• Revolving Credit: Credit card debt increased by 2.8% annually in Q3, as higher interest rates made borrowing more expensive.

• Non-Revolving Credit: Loans for cars and education rose by 3.4%, indicating continued demand despite inflationary pressures.

• Overall Growth: September's annualized growth of 1.4% signals a slowdown, influenced by tighter financial conditions and elevated household debt levels.

Labor Market and Inflation

• Jobs: The U.S. labor market remains strong, with unemployment at 3.8%. Job creation in services and technology sectors offsets losses in manufacturing.

• Wages: Year-on-year wage growth has moderated to 4.1%, down from 4.4%, easing some inflationary concerns.

• Inflation: Consumer prices rose by 0.3% in October, bringing the annual rate to 3.7%. Core inflation, excluding food and energy, edged to 4.1%, showing the impact of the Federal Reserve's rate hikes.

The Federal Reserve remains data-dependent, and no immediate changes in interest rates are expected. Analysts project a potential pause in rate hikes unless inflation accelerates unexpectedly.

U.S. Stock Markets

Markets reacted positively to corporate earnings from key players like Nvidia and Walmart:

• Dow Jones Industrial Average: Fell by 0.3%, weighed down by declines in financials and energy stocks.

• S&P 500: Rose 0.4%, led by gains in retail and technology sectors.

• Nasdaq Composite: Climbed 1%, driven by Nvidia's strong outlook.

Nvidia: Shares jumped over 3% ahead of its quarterly earnings, as investors anticipate another blockbuster performance in AI chip sales.

Walmart: Shares rose 2% following its robust quarterly results, which showed resilience in consumer demand for discounted goods.

Walmart's Performance

Walmart beat Wall Street expectations and raised its profit outlook, highlighting its ability to attract cost-conscious consumers.

• Q3 Results: Revenue reached $169.6 billion, up 5.4% YoY. Adjusted earnings per share came in at $1.58.

• E-commerce Growth: Online sales surged 22%, with strong curbside pickup and home delivery adoption.

• Holiday Outlook: Walmart forecasts a strong holiday season, benefiting from inflation-conscious shoppers seeking deals.

Walmart's success underscores its dominant position as a retail leader in navigating inflationary pressures.

Australian Economy

Australia's economy continues to grow but at a subdued pace, reflecting a mix of internal and external challenges:

• Quarterly GDP Growth: Up 0.2% in Q2, marking the 11th consecutive quarter of expansion.

• Annual Growth: At 1.5%, the slowest pace since the early 1990s recession (excluding the pandemic).

• Employment: The job market shows signs of recovery after a slowdown, with the Reserve Bank of Australia (RBA) expressing cautious optimism for 2024.

Key sectors like mining and commodities have faced headwinds due to weaker demand from China and other major trading partners.

Global Outlook

• China: Efforts to stabilize the real estate market are ongoing, with the government injecting liquidity into struggling developers.

• Europe: The Eurozone continues to grapple with sluggish growth as high energy prices and geopolitical tensions weigh on recovery prospects.

Key Takeaways

• For Investors: Robust earnings from companies like Nvidia and Walmart provide a positive signal, but broader market sentiment remains cautious due to persistent inflation and geopolitical uncertainties.

• For Policymakers: It is essential to balance growth and price stability, with inflation moderating but still above target levels.

• For Consumers: Tightened credit conditions and elevated prices may temper spending during the holiday, although demand for discounts remains high.

This week, all eyes will be on corporate earnings and economic data to gauge the trajectory of global markets into 2024.

Sources:

Here are the complete URLs for the sources cited:

1. Federal Reserve Consumer Credit Report: https://www.federalreserve.gov/Releases/g19/current/

2. AP News Market Update: https://apnews.com/article/38a65c5879641d00d0e3af05c033af44?utm_source=chatgpt.com

3. New York Post Walmart Earnings: https://nypost.com/2024/11/19/business/walmart-beats-earnings-expectations-as-cost-conscious-shoppers-seek-out-deals/?utm_source=chatgpt.com

4. The Australian Economic Analysis: https://www.theaustralian.com.au/business/economics/jobs-market-slowdown-may-have-reversed-reserve-bank-warns/news-story/f9181ca5898303dfbc0a8c2a4892ee11?utm_source=chatgpt.com

5. The Peninsula Global Economic Growth Trends: https://thepeninsulaqatar.com/article/17/11/2024/what-lies-beneath-steady-global-economic-growth

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