S&P 500 and Nasdaq in correction territory

The S&P 500 Index entered correction territory Friday – having fallen more than 10% from its end-of-July peak – as concerns over high interest rates and the economy kept investors on the defensive. Technology shares provided one exception, as better-than-expected earnings from Amazon and Intel helped the Nasdaq Composite eke out a modest gain.  Banking and energy were among the weakest sectors Friday, with the latter under pressure despite strength in crude oil futures. Another leg down in small-cap shares suggested investors are growing increasingly concerned about the economy. For the week, the S&P 500 Index was down 2.5%, the Dow Jones Industrial Average fell by 1.1%, and the Nasdaq Composite dropped by 0.4%. Meantime, European equity markets extended their losses on Friday afternoon, with the DAX 40 and the Euro Stoxx 50 Index both falling to a nearly 10-month low. 

Summary for 30.10.2023 

• Asian equity markets mostly fell this morning as investors braced for monetary policy decisions from the Fed to the Bank of Japan this week. Inflation data from South Korea and manufacturing and services activity data in China are also on deck this week. Shares in Australia, Japan and Hong Kong declined, while mainland China equities wobbled. 
• European shares are headed for a mixed start with corporate earnings and Middle East tensions in focus. Elsewhere, US equity futures rose on Monday in a likely technical rebound, while investors look ahead to a busy week filled with the Federal Reserve’s policy decision, the monthly jobs report and Apple’s earnings report. 
• Oil prices slipped more than 1% on Monday as investors adopted caution ahead of a US Federal Reserve policy meeting and China’s manufacturing data due this week, offsetting support from tension in the Middle East. 
• Israel has sent troops and tanks into the northern Gaza Strip in what it calls the second and larger phase of its war against Hamas. Instead of a massive ground invasion, the military has started slowly, taking a day-by-day approach based on casualties, concerns of the conflict spreading to Hezbollah in the north and internal political pressures on Prime Minister Bejamin Netanyahu.  
• Retail sales in Australia rose by 0.9% mom in September, sharply accelerating from an upwardly revised 0.3% gain in August, a flash print showed. This was the third straight month of growth in retail turnover and the fastest pace since January, with sales in department stores rising the most due to a warmer-than-usual start to spring. 
• Core PCE prices in the US increased by 0.3% from the previous month in September, the most in 4 months, aligning with market estimates and accelerating from the 0.1% increase from the earlier month. The annual rate, regarded as the Federal Reserve’s preferred measure of inflation, eased slightly to 3.7%, the lowest since May 2021.  
• Personal spending in the US rose by 0.7% from a month earlier in September, following a 0.4% increase in August and beating the market consensus of a 0.5% advance. Spending on services saw a substantial increase of 0.8%, while spending on goods also rose by 0.7%. 
• HSBC Holdings this morning reported that quarterly profit more than doubled, but fell short of market expectations, as it prepared to launch a $3 billion share buyback. Q3 pretax profit soared to $7.71 billion from $3.23 billion a year before, which HSBC said reflected the positive impact of a higher interest rate environment. However, the figure fell short of company-compiled analysts estimate of $8.10 billion. 
• Ford Motor tumbled 12.3% Friday after the company’s third-quarter results missed expectations. The automaker also dropped its previous full-year earnings forecast over the uncertain impact of the United Autoworkers strike. 
• Chevron and Exxon Mobil shed 6.7% and 1.9%, respectively on Friday after reporting quarterly results. Chevron’s results missed Wall Street estimates by a wide margin while Exxon Mobil’s earnings came in slightly below forecasts. 
• Enphase Energy dropped nearly 15% in the last session of the week after the solar energy company issued mixed results for the previous quarter and disappointing outlook for the current quarter. 
• Sanofi shares plunged 19% on Friday after the company reported weaker-than-expected third-quarter earnings and said it expects higher research and development spending to curb profit in 2024.