October Review 2024

US

The S&P500 ended the month of October flat at 5705, paring back a 2.7% gain from an intra-month peak of 5864. Monthly consumer prices rose by 0.1% to 0.2% ahead of the US election and upcoming Fed rate decision on November 7th. The Federal Reserve is expected make a further 25 basis point cut from 5% to 4.75% after the jumbo 50 basis point cut on September 18th. Non-farm payroll figures came in at 254,000, significantly higher than the 147,000 forecast. Hot labour market figures add to inflationary concerns and dampen hopes of a rate cut at the next FOMC meeting.

UK

The FTSE100 ended the month down 2%, following chancellor Rachel Reeves’ autumn budget in which she outlined £40 billion of tax hikes to close a ‘£22 billion black hole’ in the UK’s public finances. Interest rates are set to fall by 25 basis points to 4.75% from 5% at the Bank of England’s next rate decision meeting on November 7th in an effort to stimulate the economy after October’s lower than forecast annualised inflation reading of 1.7% and weak GDP figure of 0.2% growth.

Europe

Eurozone interest rates fell by 25 basis points from 3.65% to 3.40% on October 17th as the European Central Bank shifted its focus from curbing inflation to addressing sluggish economic growth across the 20-nation Eurozone.

Equity Markets

October marked the final earnings season for 2024 for the majority of the Magnificent Seven – earnings were strong across the board for the technology mega-caps.

Tesla shares surged by 12% following the release of its third-quarter earnings report on Wednesday October 23rd. After a challenging second quarter, the electric vehicle giant exceeded Wall Street’s forecasts for earnings per share, making a solid recovery, reporting earnings-per-share of $0.72, outpacing the anticipated $0.60 from investors.

Alphabet (Google’s parent company) announced strong financial performance for the third quarter, driven by robust growth across its main revenue streams. Total revenue reached $88.3 billion making a 15% year-over-year increase. Google Services generated $76.5 billion, led by a 12% growth in Google Search, while YouTube’s ad revenue rose from $8 billion to $8.9 billion from the previous year.

Microsoft released its Q1 2025 earnings on October 30th, surpassing Wall Street expectations in both revenue and earnings per share (EPS). The company reported revenue of $65.6 billion, a 16% year-over-year increase, beating the projected $64.5 billion. Its EPS came in at $3.30, outperforming the forecasted $3.10 by $0.20.

Meta’s earnings report for Q3, released on October 30th, demonstrated better-than-expected results. Meta posted a revenue of $40.59 billion, slightly above the analyst estimate of $40.21 billion. Earnings per share (EPS) reached $6.03, significantly surpassing the forecasted $5.19, marking a strong financial performance. The company’s revenue growth of about 23% year-over-year was driven by robust advertising sales, with continued improvements in its AI-driven ad targeting tools benefiting advertisers on platforms like Facebook and Instagram​.

Amazon’s Q3 earnings were released on October 31st. Revenue reached a mammoth $158.88 billion, an 11% increase from last year, exceeding analyst forecasts of $157.4 billion. Earnings per share also beat predictions, reaching $1.43 compared to the expected $1.14, which contributed to a 3.8% rise in Amazon’s stock following the announcement. CEO Andy Jassy highlighted “triple-digit” year-over-year growth in generative AI demand. Amazon Web Services secured strategic agreements with large enterprises and introduced new AI features, contributing to its strong performance. In its retail segment, Amazon expanded its lineup of products and introduced new Kindle models, further boosting its sales.

Apple’s earnings report for its fiscal Q4 released on October 31st showed a mixed financial performance. Revenue for the quarter reached $94.9 billion, up from $89.5 billion the previous year, with growth driven largely by increased iPhone sales and ongoing strength in its services division. iPhone revenue alone hit $46.2 billion, reflecting solid consumer interest, especially for the new iPhone 15 models, which outperformed prior expectations despite supply chain challenges. The company also announced a $0.25 per share dividend for investors, reflecting Apple’s continued commitment to returning value to shareholders, despite its faltering market outlook in the far east.

Commodity Market

Gold prices continued breaching all time highs, peaking at $2,792.70/oz on October 30th. Total demand for Gold including OTC, gained 5% year on year to 1,313 tons in Q3. Central bank net buying slowed to 186 tons, whilst OTC demand almost doubled year on year to 137 tons. Gold ETFs saw net inflows of 95 tons, whereas mine production hit an all-time third quarter high in 2024 increasing by 6% year on year according to the World Gold Council. During a presentation they noted an orderly US political transition and China stimulus as downside risks for Q4, which makes a strong case for the sharp 4% decline which occurred yesterday November 6th following the Trump election victory.

Oil markets reverted to gloom as consumption fell short of forecasts and eight members of OPEC+, pushed back their planned increase of 180,000 barrels per day (bpd) in December by another month following the poor Asian demand outlook. Bearish sentiment continues to grip the market, as brent crude prices fell 12% from an intra-month peak on October 7th of $80.93 /bbl to $71.12 /bbl on October 29th. Israeli PM Benjamin Netanyahu’s obedience to the US government’s demands not to strike oil facilities in Iran was met favourably by markets and saw speculators unwind bullish bets across crude futures contracts.

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