Market Update – 30th October 2024.

31st October 2024

The phrase on investors’ lips this week is of course the Autumn Budget that is due to be delivered by Chancellor Rachel Reeves today at 12:30pm. There has been much speculation around what changes Reeves will announce following a purported 22 billion pound ‘black hole’ in UK finances she allegedly found after taking her seat in office. Investors will keenly await information on possible alterations of fiscal rules in areas like taxation, where we will learn whether allowances for Capital Gains and Inheritance tax will be altered or remain the same, as well as news on things like employer contributions to National Insurance.

Speculation has surrounded the announcement like an errant fly on a summer’s day that just won’t quit, with gloomy media headlines putting somewhat of a dampener on UK consumer sentiment. Whatever Reeves reveals, however, our ethos for wealth management will remain consistent. As our clients will know, our portfolios are highly diversified – offering downside protection and risk adjusted returns through a carefully considered spread of investments across different asset classes across the globe.

The Bureau of Labor Statistics reported on Tuesday that job openings declined to 7.44 million by the end of September, down from 7.86 million in August. Investors are closely monitoring any further signs of a cooling labour market as the Federal Reserve’s interest rate decision on the 7th of November approaches. Additional updates on inflation and employment trends expected later in the week will play a crucial role in shaping the Fed’s policy direction, although, for the American people at least, the current economic climate seems more stable (and favourable) than it has previously. The Conference Board revealed on Tuesday that consumer confidence increased in October to 108.7 from 99.2 in September. This month’s data saw an improvement across all five categories surveyed, showing that the American people are reflecting more positively on current business conditions, as well as feeling more optimistic about the current availability of jobs.

Brent crude prices fell below $72 per barrel on Monday – a level scarcely seen in the past two years – amid easing concerns over Middle East tensions. Over the weekend, Israeli missiles were fired over Iran but avoided Tehran’s oil infrastructure and Iran’s leader refrained from directly threatening Israel in a speech on Saturday. As fears of conflict diminished, however, investor’s focus shifted once again to weak global demand, with hope that recent stimulus measures from the People’s Bank of China will boost oil consumption in the region, which is the world’s largest importer.

After the bell on Tuesday, the first of the five Mag-7 big tech stocks due to report earnings this week was announced. Bolstered by strong revenue from their cloud unit, Alphabet exceeded earnings expectations on both the bottom and top lines. This led to a rise of around 6% in shares after trading hours concluded.

In Ireland, GDP rose by 2% in the third quarter of this year, bouncing back from a 1% contraction in Q2 and marking the strongest growth rate since the third quarter of 2022. The uptick was largely driven by the multinational-led sectors of Industry and Information & Communication.

Still to come this week, we have some further communications from the Wealth at Work group following the Autumn Statement today, China’s manufacturing and non-manufacturing PMI data, Eurozone CPI and US PCE data, as well as non-farm payrolls and the US’ unemployment rate. We also have more big tech earnings.

Nicola Tune, Portfolio Specialist