In October, the long-term outlook for the Global Market Index (GMI) saw a positive shift. This updated forecast is notably the first increase in GMI estimates in four months. The GMI is an unmanaged benchmark that encompasses all major asset classes (excluding cash), and it utilizes market weights through a selection of ETF proxies.
The yield on the US 10-year Treasury climbed to 4.40% on Friday, reaching its highest point in four months. Gennadiy Goldberg, head of rates strategy at TD Securities, suggeststhat if Trump secures the election and Republicans gain control in Congress, the 10-year yield could approach 5%. Meanwhile, a Reuters report states: “If Republicans dominate both houses of Congress along with the U.S. presidency, it is likely that tariffs will increase, leading to a rise in interest rates, particularly at the longer end of the yield curve due to inflation. Moreover, the growing U.S. Treasury debt required to cover a significant fiscal deficit will push up yields on the long-end.” Conversely, if Democrats win: “it could lead to increased taxation on corporations and high-income households, potentially hindering economic growth. This scenario may encourage disinflation, possibly prompting the Federal Reserve to adopt a more aggressive easing stance. In such an environment, interest rates are expected to drop, particularly at the front end of the curve.”
● How to Move Up When the Only Way is Down: Lessons from Artificial Intelligence for Overcoming Your Local Maximum
Author: Judah Taub
Interview with the author via CTech
Q: What lessons can humans take from AI in situations where they may be ‘climbing the wrong mountain’? How can these lessons be adopted?
A: The central issue I discuss is that everyone’s goal is to reach a higher point. The higher location could symbolize a better valuation for a startup, or enhanced earnings for an individual. These goals are traditionally capitalist, but they could also reflect personal happiness or meaningful contributions to society. Success can be defined in many ways, but generally, a higher position is preferable to a lower one.
Global markets experienced a widespread decline in October. For the first time since April, most major asset classes logged monthly losses, featuring a variety of ETF proxies. However, cash and commodities stood out as the only exceptions.
The latest US jobless claims have dropped to a five-month low. This marks the third consecutive week of reductions in unemployment benefit filings, suggesting that the effects of hurricanes that impacted the Southeastern US in September are diminishing.
It has been quite a journey for analysts who transitioned from a summer filled with recession forecasts to the recent report of a strong 2.8% increase in third-quarter GDP. This impressive growth was primarily fueled by higher consumer spending, which constitutes about two-thirds of GDP. Personal consumption expenditures surged by 3.7% in the third quarter, a significant increase from the 2.8% growth seen in the second quarter.
US GDP increased by 2.8% in the third quarter—a respectable growth rate, albeit slightly below expectations. This rise represents a modest slowdown from the 3.0% growth recorded in Q2. A primary factor contributing to the Q3 growth was an increase in consumer spending, which accounts for roughly two-thirds of GDP. Personal consumption expenditures soared by 3.7% in the third quarter, marking a considerable improvement from the 2.8% seen in Q2.
In the race for 2024 calendar year performance, there’s clearly no competition. Momentum and large-cap growth factors continue to significantly outperform all other sectors, as evidenced by a range of ETFs concluding on October 29.
US job openings have decreased in September, reaching their lowest level since January 2021. Nancy Vanden Houten, lead economist at Oxford Economics, noted, “The low rate of quits aligns with a reduced availability of employment opportunities. The ongoing decline in the quits rate supports the notion that wage growth is slowing, which in turn lowers the inflationary pressure from the labor market.”
The recent increase in Treasury yields may indicate a diminishing likelihood that the Federal Reserve will lower interest rates at the upcoming policy meeting scheduled for November 7.
