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The third-quarter GDP report surprised many economists with a robust 4.9% increase. Will we see a reversal in the fourth quarter?
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<p>* Israel plans to maintain security control in Gaza ‘indefinitely,’ according to <a href="https://www.timesofisrael.com/israel-to-keep-security-control-in-gaza-indefinitely-after-war-netanyahu-says/">Netanyahu</a>.<br/>* Ed Yardeni of Yardeni Research claims “the stock market’s correction is over,” <a href="https://www.marketwatch.com/story/stock-market-correction-is-over-after-broad-surge-amid-epic-market-rallies-6a85426c">advises</a>.<br/>* The Fed still has <a href="https://finance.yahoo.com/news/kashkari-fed-more-control-inflation-001603730.html">work to do</a> regarding inflation, asserts Kashkari.<br/>* China <a href="https://www.businessinsider.com/china-economy-foreign-investment-deficit-beijing-xi-jinping-zero-covid-2023-11">reported</a> its first-ever foreign investment deficit in Q3.<br/>* South Korea <a href="https://www.ft.com/content/d70585d4-295e-4484-94db-49cc7efb9635">has prohibited</a> short selling until June 2024.<br/>* US natural gas prices <a href="https://www.reuters.com/business/energy/us-natgas-prices-drop-7-record-output-mild-weather-2023-11-06/">plummeted</a> due to increased supply and mild weather.<br/>* Global economic activity showed stagnation in October, as indicated by <a href="https://www.pmi.spglobal.com/Public/Home/PressRelease/ada3c2bf0bdb4ec5aa088d9b4448f0dd">the global GDP proxy.</a></p>
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Following last week’s announcement that the Federal Reserve has kept interest rates steady, coupled with a slower-than-expected increase in payrolls for October, investor optimism has been rejuvenated. The crucial question now is whether the broader market rally represents a genuine shift in sentiment or merely a fleeting trend.
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<p>* The cost of money (natural rate of interest) is <a href="https://finance.yahoo.com/news/price-money-going-not-only-000017530.html">increasing,</a> driven primarily by Fed policies.<br/>* Qatar and China <a href="https://www.arabnews.com/node/2403536/business-economy">have signed</a> a 27-year agreement for liquefied natural gas.<br/>* The outlook for Q4 among Big Tech companies <a href="https://www.afr.com/markets/equity-markets/big-tech-s-growth-status-in-doubt-on-weaker-sales-outlooks-20231106-p5ehxo">is dimming</a> following strong Q3 results.<br/>* The Eurozone economy <a href="https://www.pmi.spglobal.com/Public/Home/PressRelease/07c88facada84adfa625d9bbdc47585d">contracted</a> in October at a pace not seen in nearly three years.<br/>* Are low valuations for small-cap stocks <a href="https://www.morningstar.com/markets/markets-brief-is-it-finally-time-buy-small-cap-stocks">indicating</a> a potential buying opportunity?<br/>* Berkshire Hathaway <a href="https://www.cnbc.com/2023/11/04/berkshire-hathaway-brk-earnings-q3-2023.html">reported</a> a 40% increase in operating earnings.<br/>* US private payrolls are decreasing at a faster rate than overall payrolls, which include government jobs:</p>
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<p><a href="https://www.amazon.com/Rise-Global-Middle-Class-Search/dp/0815740328?_encoding=UTF8&qid=1698936212&sr=1-1&linkCode=li2&tag=thecapitalspe-20&linkId=6518159da7ddb53ea5e23060eaae9cae&language=en_US&ref_=as_li_ss_il" target="_blank" rel="noopener"><img decoding="async" class="alignleft" src="https://ws-na.amazon-adsystem.com/widgets/q?_encoding=UTF8&ASIN=0815740328&Format=_SL160_&ID=AsinImage&MarketPlace=US&ServiceVersion=20070822&WS=1&tag=thecapitalspe-20&language=en_US" border="0"/></a><img loading="lazy" decoding="async" style="border: none !important; margin: 0px !important;" src="https://ir-na.amazon-adsystem.com/e/ir?t=thecapitalspe-20&language=en_US&l=li2&o=1&a=0815740328" alt="" width="1" height="1" border="0"/>● <a href="https://amzn.to/40lEuJL">The Rise of the Global Middle Class: How the Search for the Good Life Can Change the World</a><br/>Homi Kharas<br/><strong><a href="https://www.mckinsey.com/mgi/forward-thinking/forward-thinking-on-the-existential-issues-facing-the-middle-classes-in-every-country-with-homi-kharas">Listen to the author’s interview</a> via McKinsey Global Institute podcast</strong><br/>Q: In your new book, you discuss the milestone where half of the global population is now classified as middle class or wealthier. As of today, that figure stands at four billion and may reach five billion by 2030. What factors have contributed to this remarkable expansion, and what will drive it forward?<br/>A: The simplest explanation is technological advancement. Technology triggered the rise of the middle class in the 19th century by creating demand for literate clerks to facilitate contracts between banks and factory owners, thus supporting business growth. The innovations of the Industrial Revolution fostered a healthier, more educated workforce, consequently increasing demand for professionals such as educators and healthcare providers. This productivity surge, in turn, led to wage increases.</p>
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We have encountered this situation before; however, following the Federal Reserve’s decision on Wednesday to maintain interest rates, alongside comments from Chairman Jerome Powell, investors are once again contemplating whether the current phase of monetary tightening has reached its peak.
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<p>* The strategic chokepoint of oil—the Strait of Hormuz—is currently <a href="https://www.cnbc.com/2023/11/03/strait-of-hormuz-is-in-focus-as-israel-hamas-war-threatens-to-spread.html">under scrutiny</a> due to the ongoing Israel-Hamas conflict.<br/>* Sam Bankman-Fried, the face of FTX, <a href="https://www.bbc.com/news/business-67281759">was convicted</a> of fraud in connection with the collapse of the cryptocurrency exchange.<br/>* Global manufacturing activity <a href="https://www.pmi.spglobal.com/Public/Home/PressRelease/68224c244fa64925b2ed7b40fb8bde47">contracted</a> for the fifth consecutive month in October.<br/>* Bullish sentiment in the stock market <a href="https://www.bespokepremium.com/interactive/posts/think-big-blog/bears-shrug-off-a-rally">declined</a> for the third week, reaching its lowest levels since May.<br/>* Despite remaining low, US jobless claims <a href="https://www.bloomberg.com/news/articles/2023-11-02/us-continuing-jobless-claims-increase-for-sixth-straight-week#xj4y7vzkg">have risen for six consecutive weeks</a>.<br/>* US factory orders <a href="https://www.rttnews.com/3402306/u-s-factory-orders-surge-more-than-expected-in-september.aspx">increased significantly</a> in September, exceeding expectations:</p>
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