Benzinga - by Piero Cingari, Benzinga Staff Writer.
Global geopolitical developments and domestic economic data shaped investor sentiment throughout the week, sparking fresh concerns regarding the outlook for growth and inflation.
Global Reactions Mount As Israel-Hamas Conflict Escalates
President Joe Biden condemned Hamas’ attacks, labeling them an “act of sheer evil.” The White House has confirmed 27 deaths of American citizens.
Secretary of State Anthony Blinken flew to Israel for talks with Israeli Prime Minister Benjamin Netanyahu and President Isaac Herzog, reaffirming U.S. support for Israel “as long as America exists.”
Blinken also met with King Abdullah II of Jordan, Palestinian Authority President Mahmoud Abbas and Qatar Emir Tamim bin Hamad Al Thani in an effort to prevent the conflict from escalating further. Along the northern border between Israel and Lebanon, the Iran-backed militant group Hezbollah launched gunfire targeting several Israeli military posts.
On Thursday, International Monetary Fund Managing Director Kristalina Georgieva expressed concerns about how the conflict could impact global oil markets, as instability in the Middle East, responsible for roughly one-third of global oil production, could disrupt supplies.
Resurgent US Inflation, Mortgage Rates Hit 23-Year Highs, Consumer Sentiment Dips
During the same month, Consumer Price Index inflation rose by 3.7% year on year, surpassing the anticipated 3.6%.
Thirty-year mortgage rates have spiked above the 7.5% threshold, reaching their highest point in 23 years.
The resurgence of inflation and the elevated interest rates have weighed on consumer sentiment, as measured by the University of Michigan.
Fed Signals Another Rate Hike Is Still Possible, But Market Appears Skeptical
The Fed members unanimously agreed that policy should remain in a restrictive mode for an extended duration.
Notably, market participants are almost fully pricing in – they factor in a 92% probability according to CME Group Inc. (NYSE:CME)’s FedWatch – that the Fed keeping rates unchanged at the Nov. 1 meeting.
M&A Activity Picks Up, Banks Report Strong Q3 Earnings
Exxon MobilCorp.Microsoft Corp.Activision BlizzardMarket Highlights: Volatility Returns, Oil, Gold Stage Comeback
Gold, as tracked by SPDR Gold Trust (NYSE:GLD), spiked over 5% this week, marking its second-best week of the year, drawing safe haven flows from rising geopolitical risks.
West Texas Intermediate (WTI) oil price, as tracked by the United States Oil Fund (NYSE:USO), rallied nearly 6% on the week, staging the strongest weekly performance since end August.
Energy stocks outperformed all other sectors, with the the Energy Select Sector SPDR Fund (NYSE:XLE), up over 4% for the week.
What To Watch In The Week Ahead
Jerome PowellCorporate earnings are expected to take the spotlight, featuring Charles Schwab (NYSE:SCHW) on Monday, followed by Johnson & Johnson (NYSE:JNJ), Bank of America (NYSE:BAC), Lockheed Martin Corp. (NYSE:LMT), Goldman Sachs (NYSE:GS), Bank of New York Mellon (NYSE:BK), United Airlines Holdings (NASDAQ:UAL), Prologis Inc. (NYSE:PLD), and Interactive Brokers Group Inc. (NASDAQ:IBKR) on Tuesday.
Wednesday will see earnings reports from Tesla Inc. (NASDAQ:TSLA), Procter & Gamble Co. (NYSE:PG), Netflix Inc. (NASDAQ:NFLX), Abbott Laboratories (NYSE:ABT), Morgan Stanley (NYSE:MS), Elevance Health Inc. (NYSE:ELV), Lam Research Corp. (NASDAQ:LRCX), and US Bancorp (NYSE:USB).
Thursday’s lineup includes Danaher Corp. (NYSE:DHR), Philip Morris International (NYSE:PM), Blackstone Inc. (NYSE:BX), Union Pacific Corp. (NYSE:UNP), AT&T Inc. (NYSE:T), and Freeport-McMoran Inc. (NYSE:FCX), while Honeywell International Inc. (NYSE:HON), American Express Co. (NYSE:AXP), and Schlumberger N.V. (NYSE:SLB) are scheduled for Friday.
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