Global Markets Rise Amid China Slowdown

The Major Markets closed mostly higher with Emerging Markets being the lone benchmark closing lower again. The waning performance of China pulled on the emerging market index for the second week in a row as details continue to be sparse out of the country on what exactly the government plans to do to turn their economy around. 

In economic news, the IEA updated their 2024 guidance on World Oil Demand last week. The report highlighted that global demand appeared to be settling around 900,000 barrels per day with 2025 estimated to be slightly higher at 1mb/d. This is a stark contrast from the 2mb/d clip that the global economy demanded in the post covid years of 2022 and 2023. China was singled out as a significant contributor for this slowdown as the country accounted for an astounding 70% of demand in 2023. 

Stateside, the S&P 500 and the Dow Jones Average both logged fresh all-time highs. The 85-basis point gain in the S&P 500 was the result of positive sentiment overall with Energy and Health Care marking the only negative performance among the sectors. 

The Health Care sector was impacted by poor guidance results from Unitedhealth Group Inc following the company’s Q3 earnings call . Due to the company’s weighting within the sector, this caused the company to pull heavily on the overall sector. This pullback was a powerful example of the impact that some companies can have in the midst of earnings season. 

The Q3 earnings season began in earnest last week with 224 companies reporting. This number will continue to climb until mid-November with over 1800 companies reporting earnings and guidance a couple weeks ahead of the Thanksgiving holiday and the start of the holiday season. 

In the midst of earnings season, the FOMC is anticipated to lower the fed funds rate by another 25 basis points. The CME Group’s FedWatch tool continued to see the odds firm up around a quarter point cut for November 7th. However, the December meeting has seen the odds of another 25-basis point cut weaken. 

https://www.iea.org/reports/oil-market-report-october-2024#overview

https://www.unitedhealthgroup.com/newsroom/2024/2024-10-15-uhg-reports-third-quarter-results.html

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