It’s becoming a very familiar refrain but here we go, once more with feeling —Wall Street’s three key indices closed the week higher.
The gains were in large part due to Amazon’s shares jumping almost 10% after reporting stronger than expected earnings and giving a robust forecast, particularly in in its cloud services division.
The Dow, the S&P 500 and Nasdaq rose 0.1%, 0.3% and 0.6% respectively.
However, the mood was not exactly euphoric as a couple of Federal Reserve officials issued a reality check on the prospect of further rate cuts, in short term at least.
Federal Reserve Bank of Atlanta President Raphael Bostic said a December rate cut was not locked in despite market expectations for a cut, while Federal Reserve Bank of Cleveland President Beth Hammack said she had opposed Wednesday’s rate cut because inflation is too high.
On Friday, traders were pricing in a 65% probability of a December rate cut, down from 73% on Thursday and 92% a week ago, according to CME Group’s FedWatch tool.
“The theme today is pretty similar to what we saw yesterday. It’s earnings coming in a little better than expected but tempered by a little more hawkish commentary from the Fed,” D.A. Davidson CIO James Ragan told Reuters
Portfolio manager at Empiric LT Equity Jake Seltz chipped in, saying investors “may have gotten in front of their skis” in their bets for lower rates.
Over the month the S&P 500 gained 2.3%, roughly the same as Europe (+2.2%) while the ASX was something of a laggard picking up 0.4% — all were well and truly shaded by Japan’s Nikkei that put on a stonking 16.6% in October.
The US dollar was stronger against a basket of currencies made up of its key trading partners.
The Aussie dollar was marginally softer but still gained 0.5% over a week where the Greenback was generally stronger.
Gold slipped a tad due to the uncertainty over the Fed’s next move, barely holding above the $US4,000/ounce level.
Oil edged higher on speculation US bombs would start dropping bombs on Venezuela — they haven’t yet.
On Sunday, OPEC+ agreed to another small production increase in December, but also said it would pause the increases from January through to March.
Bitcoin edged higher on Friday but still shed 5% over the month — its first monthly loss in seven years.