Macro Thoughts for the Week Ahead
All eyes on Q3 GDP growth and Federal Reserve actions
Our focus is on this Thursday’s first look at third quarter 2023 GDP, after a very strong recent retail sales report, and the Federal Reserve’s upcoming meetings on October 31st to November 1 and then December 12-13... How long can consumer spending continue? The answer usually is dependent on the health of the job market, which remains stable as we head into the holiday spending season.
Geopolitics and war remain top of mind—both the Middle East and Black Seas conflicts—as does the potential U.S. government shutdown on November 17. Finally, markets will absorb a slew of earnings reports this week from the several of the “Magnificent 7” technology companies (Amazon, Google, Microsoft, Meta), several major defense (Boeing, General Dynamics, RTX, Northrop Grumman) and energy companies (Exxon, Chevron, Haliburton, Phillips 66), as well as Visa and Mastercard.
We also start the week with a major merger announcement: Chevron’s agreement to buy Hess in a $53 billion all-stock deal.
The Watch List
- Middle East Conflict and World War (Medium-term) President Biden declared the world at an “inflection point in history” in an Oval Office address, linking Israel’s battle against Hamas to Ukraine’s fight against Russia
- National Security (Long-term) Russia said it supports holding regular security talks with North Korea and China to address the threat posed by the U.S. on the Korean Peninsula, as Moscow draws closer to its partners and attempts to counter isolation from the West.
- Monetary Policy (Medium-term) Jerome Powell suggested in a recent speech that the run-up in long-term Treasury yields could allow the Fed to suspend a historic run of interest-rate increases as long as progress on inflation continue. The next FOMC meeting takes place on October 31-November 1st.
- Economic Growth vs. Downturn Debate (Medium-term) Economic activity is set to weaken in the U.S., leading to a
- likely shallow recession next year, according the Conference Board’s economic index which fell 0.7% in September following a 0.5% drop August.
- Government Shutdown (Short-term) The U.S. Congress has one month to avoid a government shut down November 17th. The continued absence of a Speaker of the House complicates the picture.
Numbers of Interest
$865 million Dollar value of transactions processed during July by Russian crypto exchange Garantex.
$93 million Report of funding sent via crypto currency through Russia’s Garantex Exchange to Hamas, the terrorist organization responsible for the October attacks on Israel.
-6.2% Percentage decline in outbound goods shipments from China to the rest of the world in September, a slight improvement relative to the -8.8% decline in August.
$48,000 Average price of a new car in the USA during 3Q 2023, up 23% from $39,000 three years ago.
18% Percentage of new car buyers paying $1,000 or more in car payments vs. 7% three years ago.
17.6% Percentage of the U.S. Population age 65 or older as of August 30, 2023.
Kenneth Scott Zuckerberg is Lead Industry Analyst, Farm Supply & Biofuels, CoBank
