October 26 – November 1, 2024
Big news. This week there is simply none. The collapse in the US markets is generally within the norm, there are simply no other surprises. Silence and decorum. Which, in fact, is completely understandable in the situation a week before the US presidential election.
But there is a desire to say a few words about this election, even if it is not about the economy. Because the economy will come later. As it seems to us, the trick here is this. Apparently, Kamala Harris’ campaign has practically stopped. Everyone thinks that this is because she is losing. But we do not rule out that the matter is that she has already won.
It is clear that we are talking about mail-in votes. And if it turns out that these votes radically changed the outcome, then a whole bunch of tricky problems arise, such as: recognition of such elections by individual states (and in some swing states, Republicans rule), recognition of elections at the congressional level (and here the results of both the Senate and the House of Representatives elections will play an important role), and so on.
So, how will financial markets react to such a situation? How will individual regional players behave, who were previously forced to listen to the US position? It is not for nothing, for example, that information leaked out that Israel asked Russia to become a mediator between it and Hezbollah.
Once again, these are political questions that we will not answer in the review. But these are the questions that will have a fundamental impact on many macroeconomic parameters. That is why we recommend that all our readers ask themselves these questions about how they will react depending on how the situation develops.
Well, we remind you that Mikhail Khazin will answer these questions in a webinar that will take place on November 7 and will be repeated on November 9: https://t.me/khazinml/9170 .
Macroeconomics. Sweden’s GDP -0.1% quarter-on-quarter, 2nd straight monthly decline:
Рис. 1
And -0.1% per year:
Рис. 2
Germany’s GDP -0.2% per year, 5th negative in a row:
Рис. 3
Italy industrial sales -4.6% y/y, 17th straight negative:
Рис. 4
China’s official PMI (an expert index of the state of the industry; its value below 50 means stagnation and decline) is still in the stagnation zone – 50.1 in industry and 50.2 in other sectors:
Рис. 5
Рис. 6
Independent estimates are the same (50.3 in industry, figures for services next week):
Рис. 7
US Manufacturing PMI (46.5) at 16-month low:
Рис. 8
Confidence in the eurozone industry is at its weakest since the peak of Covid, before that it was slightly worse in October 2012, and earlier – only in 2009:
Рис. 9
The Dallas Fed’s regional manufacturing index has been in the red for a record 30 months:
Рис. 10
New buildings in Japan -0.6% per year, 5th minus in a row and 15th in the last 16 months:
Рис. 11
And orders in the Japanese construction industry are -21.3% per year, the worst dynamics in 4 years:
Рис. 12
US goods trade deficit worst on record, except for one spike in March 2022:
Рис. 13
The number of job openings in the US is at its lowest in almost 4 years and has returned to pre-COVID levels:
Рис. 14
And the number of voluntary layoffs is even lower than them, people are holding on to their jobs:
Рис. 15
Announcements of mass layoffs in US companies are the highest since 2009 (not counting 2020):
Рис. 16
Unemployment in Germany has been rising monthly for 22 months in a row:
Рис. 17
Its level is at its highest since the peak of Covid, and before that, since the spring of 2016:
Рис. 18
The number of unemployed is at its highest in 10 years, not counting Covid (although its peak is very close):
Рис. 19
Japan retail sales -2.3% m/m; excluding Covid-related fluctuations, a 9-year low:
Рис. 20
In this situation, the Bank of Japan left rates unchanged, but is ready to raise them again if necessary.
Main conclusions. The structural crisis continues, no particular movements are observed. The length of the working week in the US remained at the same level:
Рис. 21
Gold price breaks records:
In the US, interest payments on debt have become equal to defense spending:
It is clear that something needs to be done about this, but it is not very clear who will do it and how. Well, our readers should think about the questions we asked in the first section of the Review over the weekend, since their further plan of action will depend greatly on the answers to them.