GDP, Earnings, Jobs, and Other Measures Exceeding Expectations

Happy Friday, Fireside Charts readers! We hope you all had a happy and safe Halloween, with plenty of candy to show for your trick-or-treating efforts. Now let’s shake off the sugar comas and take a look at the data: Wednesday’s rate cut wasn’t much of a surprise, so most of the chatter around the announcement has focused on the implication that the committee may be eyeing the pause button… and market expectations for a fourth cut this year adjusted accordingly. Could the surprise out-performance from GDP (0.3% above expectations) and today’s job’s report (50k+ above expectations!) indicate they may be on the right track? And could commodities soon join GDP, jobs, and Japanese industrial production on the pleasant surprise bandwagon? They’ve been on the decline since 2011 as equities have surged, but they look to be testing the trendline.

1. As expected, the Fed cut interest rates by another 0.25% on Wednesday. They did indicate a “pause” leaving some powder dry for the next rainy day…

Source: WSJ Daily Shot, as of 10/31/19

2. We also enjoyed a solid, and better-than-expected, GDP report.

Source: WSJ Daily Shot, as of 10/31/19

3. Earnings have been down this year but continue to be better than expected.

Source: FactSet, as of 10/31/19

4. While this has been a decade of U.S. large cap equities, commodities have languished. Are some trends getting ready to reverse or is this another head-fake?

Source: Lyons Fund Management, as of 10/31/19

5. Alas, China remains in a manufacturing contraction…

Source: WSJ Daily Shot, as of 10/31/19

6. Sweden is tiny. China is not…

Source: Gavekal Data, as of 10/29/19

7. Another positive surprise!

Source: WSJ Daily Shot, as of 10/31/19

8. Media/Data site fivethirtyeight did a fairly rigorous study on the most popular Halloween candies and these are the winners:

Source: FiveThirtyEight, as of 10/27/19

9. And the losers:

Source: FiveThirtyEight, as of 10/27/19