Stocks kicked off November with a very modest move higher.
First, the scoreboard:
- Dow: 15,615.5, +69.8, +0.4%
- S&P 500: 1,761.6, +5.1, +0.2%
- NASDAQ: 3,922.0, +2.3, +0.0%
And now the top stories:
- It’s the first day of the month, which means we got a tidal wave of global economic data. As usual, things kicked off with the South Korean trade report, aka the economic “canary in the coal mine.” Exports surged a whopping 7.3% year-over-year, crushing expectations for just 2.3% growth.
- The global manufacturing reports numbers confirmed the Korean export numbers with strong PMI numbers. The official and unofficial Chinese manufacturing PMI numbers beat expectations and signalled accelerating growth. In fact, most of the PMI numbers from Asia gave similar signals.
- In the U.S., the ISM manufacturing index unexpectedly jumped to 56.4 in October from 56.2. Economists were looking for a reading of 55.0. “Overall at this level, the ISM manufacturing index points to annualised GDP growth of close to 3.0% in the fourth quarter,” said Capital Economics’ Amna Asaf.
- However, Société Générale’s Kit Juckes noted that the “forward-ISM,” which is the difference between new orders and inventories subcomponents of ISM, dropped significantly, sending a worrisome signal.
- We got the October vehicle sales stats from the big automakers, and for the most part the numbers were disappointing. According to Autodata, vehicle sales rose to an annualized rate of 15.2 million, which was blow the 15.4 million expected. “This represents a soft start to Q4, given the trend earlier in the year: sales averaged 15.3mn in Q1, 15.5mn in Q2 and 15.7mn in Q3,” said Barclays Peter Newland.
- “It’s getting frothy, man!” exclaimed Bank of America’s Michael Hartnett in a research note about fund flows. “Another $US8-9 billion of inflows to long-only equity funds over next 2 weeks would trigger a contrarian ‘sell’ signal . Bullish investor flows dovetails with our Bull & Bear Index, which is on course to trigger a cautionary risk- off signal in mid-November.”
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