American stock indices rose for the week and renewed their historical values again. The S&P 500 added 1.3% for the week, while the capitalization of the Nasdaq rose 3.2%. October was the best month since the beginning of the year. Thanks to strong corporate reporting, the S&P 500 yielded 7% over the past month, while the Nasdaq 100 gained 8%. The season for corporate reporting is in full swing. Caterpillar engineering group, whose reporting is perceived as an indicator of the situation in the real sector of the economy, delighted investors with good quarterly results. Ford has improved its profit forecast for 2021. It is also worth noting the excellent reporting of Microsoft and Google, which have shown strong growth in cloud revenues. Microsoft shares were in demand all week, and on Friday the company’s capitalization reached a record of $ 2,490 billion. Microsoft is now the most valuable company in the world, followed by Apple with a capitalization of $ 2,458 billion.
Important macroeconomic statistics were released this week. The U.S. economy grew 2% in the third quarter of 2021 at an annualized rate, preliminary data from the U.S. Department of Commerce show. The result was worse than the average market consensus, which assumed a 2.7% increase in GDP. Economic growth slowed significantly compared to the second quarter, when it amounted to 6.7% in annual terms. The spread of the new COVID-19 delta strain, problems in global supply chains, shortages of commodities and labor, and higher prices for many types of goods have limited activity in both the industrial and consumer sectors. We believe that the slowdown in US economic growth will be temporary, and in the fourth quarter and next year, the US economic recovery will accelerate.
US Labor Department data released Thursday showed new jobless claims in the country dropped last week to a 19-month low. The number of Americans applying for unemployment benefits for the first time has decreased by 10 thousand – to 281 thousand people. We note that the data shows the robust recovery in the US labor market continues, with labor demand remaining strong amid strong economic growth. On Friday, a package of macroeconomic data on the US labor market for October will be published. These data may affect the December decision of the FRS regarding the monetary policy, but the next meeting of the FRS will be held two days earlier, namely on Wednesday, November 3. Earlier, the American regulator drew attention to the fact that due to progress in vaccinations and strong political support, indicators of economic activity and employment continued to strengthen. We expect the Fed to provide a plan to phase out its bond buyback program. In our opinion, the Fed will not make aggressive statements about raising key rates, as risks to the economic outlook remain. The sectors most severely affected by the pandemic have improved in recent months, but the rise in COVID-19 has slowed their recovery
ISM’s manufacturing PMI statistics for October are due in the US on Monday. The Fed is to publish its key rate decision on Wednesday, and Powell will hold a press conference. OPEC + meeting on oil production will take place on Thursday. An important package of data on the US labor market for October will be released on Friday.