By Bill Hornbarger, Chief Investment Officer
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Three Things to Watch
- The European Central Bank meets on Thursday and is expected to cut rates another 25 basis points, the third for this cycle. With a smaller-than-usual gap of just five weeks between decisions, and not much new data available, officials appear to be abandoning recent caution about lingering inflation pressures in order to respond mainly to survey data pointing to a contraction in the private-sector economy.
- The primary data releases this week are retail sales and industrial production for September. Retail sales are expected to be stronger (up 0.3% month-over-month), while industrial production is expected to decline 0.1%. This would be consistent with the outlook heading into the fourth quarter of a resilient consumer while manufacturing continues to struggle.
- Stocks are open on Monday while the bond market is closed, and no third-quarter earnings will be released on the holiday. Key earnings reports this week include Bank of America, Schwab, Goldman Sachs, Netflix, Abbot Labs and Procter & Gamble.
Three Things to Know
- Global food prices rose 2.1% year-over-year in September, the most in 18 months. The United Nations Food and Agriculture World Food Price Index also increased 3.0% in September, posting its largest month-over-month jump since March 2022. This has been driven by a 10.4% year-over-year surge in sugar prices, followed by meat at a 4.8% increase. Vegetable oil prices also soared by 4.6% and reached their highest level since early 2023. Global food prices are now 21.4% higher than they were in January 2020. (Source: The Kobeissi Letter)
- Equity exposure by U.S. households now stands at 48%, which mirrors the peak of the tech bubble in late 1999, and cash allocations were at 15%. (Source: @TihoBrkan)
- In a bizarre twist, the IRS agent who helped the U.S. government seize $4.4 billion in Bitcoin from the Silk Road is now sitting in a Nigerian jail. Tigran Gambaryan, who led the investigation that recovered the stolen cryptocurrency, left the IRS in 2021 to work for Binance but was arrested in Nigeria while negotiating with the government on behalf of the company. (Source: Bespoke)
The above information reflects the current opinion of the author. It is based upon sources and data believed to be accurate and reliable. Opinions and forward-looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security mentioned.