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The week in the markets –
November 1, 2024
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A tough week for oil and AI
- Oil prices slipped by 6%: Israeli strikes avoided Iran's energy sites, easing tensions.
- Tech stumbles: Meta and Microsoft stock dropped by around 5%, fuelling AI investment concerns.
- Hot U.S. data: strong jobs and spending dimmed hopes for U.S. Federal Reserve rate cuts in 2025.
Energy markets started the week with a nosedive. West Texas Intermediate (WTI) oil prices tumbled by 6% on Monday, as Israel's latest offensive was more of a low-key affair, sidestepping Iran's energy hubs. Iran confirmed its oil operations were unhindered, despite Israeli airstrikes targeting military sites. This de-escalation in geopolitical tension led to oil's sharp decline. Despite a mid-week bounce-back, WTI oil remained about 6% lower for October.
Equities dipped during earnings season's peak on Thursday, with Meta and Microsoft each dropping around 5% post-earnings. Microsoft dampened spirits by projecting slower growth in its cloud services, highlighting supply chain hurdles in Generative AI expansions. Meta's third-quarter performance looked fine at first glance, but its hefty capital expenditure plans sparked some concerns. These lacklustre results from Microsoft and Meta weighed on market sentiment, with investors growing wary of the companies' ability to maintain profit trajectories amid aggressive AI and cloud investment.
The latest ADP National Employment Report showed much higher job growth than expected in the U.S., making it unlikely that the U.S. Federal Reserve (the Fed) will lower interest rates soon. U.S. gross domestic product figures fell short, but consumer spending's surge kept pessimism at bay. Core personal consumption expenditure data ran a little hotter than expected, yet its quarterly dip helped smooth things over. Pending home sales increased, but with U.S. mortgage rates jumping since, the optimism might be short-lived. The U.S. economic surprise index is rising steadily, challenging the market’s expectation of more rate cuts following the Fed’s recent rate reduction. Now, the market expects fewer than three rate cuts in 2025. This is a far cry from the eight cuts expected a month ago.
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This week's market closing value - week ending November 1, 2024
(As of 4:00 PM ET.*)
| EQUITY INDICES | Level | Change | WTD | YTD | 1-year | 5-year |
| CAD | CAD | CAD | CAD | |||
| S&P/TSX | 24,247.14 | -228.90 | -0.94% | 15.69% | 27.09% | 7.88% |
| S&P 500 | 5,729.04 | -81.84 | -1.00% | 26.41% | 36.15% | 14.68% |
| DJIA | 42,052.19 | -62.21 | 0.27% | 17.48% | 27.28% | 10.30% |
| FTSE 100 | 8,177.15 | -71.69 | -0.78% | 12.85% | 19.24% | 3.49% |
| CAC 40 | 7,409.11 | -88.43 | -0.43% | 1.49% | 10.31% | 5.78% |
| DAX | 19,254.97 | -208.62 | -0.32% | 18.76% | 33.17% | 8.88% |
| Nikkei | 38,053.67 | 139.75 | 0.28% | 10.36% | 19.63% | 4.56% |
| Hang Seng | 20,506.43 | -83.72 | -0.08% | 27.17% | 21.48% | -4.14% |
| CURRENCY RETURNS |
CAD | Change | WTD | YTD | 1-year | 5-year |
| US$ | 1.3955 | 0.0058 | 0.42% | 5.29% | 0.71% | 1.21% |
| Euro | 1.5116 | 0.0114 | 0.76% | 3.32% | 3.21% | 0.59% |
| Yen | 0.0091 | 0.0000 | -0.09% | -2.95% | -0.65% | -5.58% |
| CANADIAN TREASURIES | Yield | Change | COMMODITIES | USD | Change |
|---|---|---|---|---|---|
| 3-month | 3.51 | 0.00 | Oil | $69.45 | -$2.23 |
| 5-year | 3.07 | 0.04 | Gold | $2,733.88 | -$8.92 |
| 10-year | 3.29 | 0.03 | Natural Gas | $2.66 | $0.12 |
| CANADIAN PRIME RATE |
|---|
| 5.95% |
*The data contained in the charts above is provided by Bloomberg as of 4:00 PM ET. Please note that the final closing market values may vary due to data delays and market settlement.
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