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On November 1, 2023, major US stock indexes suffered significant losses, with the S&P 500 dropping by 1.17%, the Dow Jones down 1.24%, and the Nasdaq 100 falling by 1.57%, reaching one-month lows. E-mini S&P futures are down 1.09%, while E-mini Nasdaq futures decreased by 1.55%. The decline is attributed to weaker technology stocks; Amazon.com and Microsoft saw losses exceeding 1% following downgrades from Rothschild & Co, and Home Depot’s stock fell more than 3% after it cut its earnings forecast due to reduced consumer spending on home improvements.
Economic indicators showed concerning trends, with ADP reporting an average job loss of 2,500 jobs per week in October and weekly initial unemployment claims rising to 232,000. This contributed to a 4.10% decline in the 10-year Treasury yield, while the November NAHB housing market index unexpectedly rose to a seven-month high of 38. In corporate earnings, Q3 results indicate growth, with 82% of S&P 500 companies exceeding forecasts, leading to an overall earnings increase of 14.6% year-over-year.
International markets also faced declines; the Euro Stoxx 50 dropped 2.29%, China’s Shanghai Composite fell 0.81%, and Japan’s Nikkei 225 plunged by 3.22%. As investors brace for further economic reports, including monthly employment and Fed meeting minutes, markets are pricing a 48% chance of a 25 basis point rate cut at the upcoming FOMC meeting on December 9-10.
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