Highlights
Market trends
- Stocks made big gains then retracted in the final week as investors positioned portfolios.
- Retail sales were a net gain thanks to favorable fall weather and social festivities.
- Building permits & housing starts declined slightly as warm weather days fade away.
- Manufacturers’ supplies remained stable but efforts were subdued due to elevated labor and borrowing costs for suppliers.
Economic trends
- Non-Farm Payrolls report showed a strong increase in jobs added during September.
- The Unemployment Rate decreased and labor participation increased, confirming a robust labor market.
- The September Inflation Rate (includes food & energy) came in lower at 2.4%, continuing its overall decline and supporting the FOMC’s stance on continuing rate cuts.
political trends
- Presidential candidate campaigns kept the pressure on as both Harris and Trump tried to connect with voters, and investors shuffled their money before election day.
- Middle eastern hostilities and the subversive nature of BRICS movements have everyone watching commodities markets closely.
A successful U.S. dockworkers’ strike kicked off the month of October, setting the tone for change with action. This month saw hot equities and bonds market activity in the midst of both domestic and foreign political tensions.
Markets
Hot Equities & Bonds Activity
The stock market opened this year’s fourth quarter trading activity with momentum. The Information Technology and Financials sectors did the heavy lifting, pushing the S&P 500 index to an all time high of 5878.46. The question remains: will the allure of the 6,000 price point manifest in the market before the year’s end?
Bonds markets also saw increased activity thanks to higher yields pushing bond prices lower. An increase in Treasuries supply helped as the Federal Reserve shed matured assets from its balance sheet. The Federal Reserve is currently engaged in a Quantitative Tightening (QT) effort to remove capital from the national market in order to tame inflation.1, 2
The increased dual market activity may be spurred by upcoming large-impact national events. It’s possible investors are positioning their portfolios in anticipation of November’s key political and fiscal decisions: the next President of the United States (POTUS) and the next Federal Open Market Committee (FOMC) interest rate decision.
Economy
Fall Fever & Signs of Recovery
The cozy season kicked off with September retail reports consistent with seasonal consumer spending trends. Consumers spent money on hobbyist activities, such as gardening, as well as social experiences like dining out. Sales declined on larger household purchases such as appliances and furniture. Perhaps consumers are waiting for those Black Friday deals before making bigger purchases.3
In the housing market, mortgage rates increased during the month of October to a high of 6.72%. Preliminary September building permits and housing starts declined slightly, consistent with builders’ transition to cooler climate expectations.4, 5, 6
Buyers seemed to remain mostly on the sidelines with existing home sales continuing to decline (-1%) and new home sales increasing ever so slightly (4.1%), mostly in the Northeast part of the country. Though the housing market stagnates, it is poised to transition from a seller’s market to a buyer’s market. Adequate supply is present, all that’s needed is a buyer-friendly financing environment.7, 8
Manufacturers and suppliers are waiting for a friendlier borrowing environment, too. National reporting reflected a slight contraction in manufacturing industries with a PMI of 47.2. Industry supplies remained adequate, but no one is overproducing in anticipation of strong demand.9
With the September year-over-year (YoY) inflation rate coming in at 2.4%, well on track for the FOMC’s strict 2% target, companies and consumers are optimistic for the Fed’s continuation with a rate cut plan. We the People are tentatively hopeful for an economically favorable 2025.10
Politics
Tensions at Home & Abroad
October’s volatility extended from the markets to the political arena, both at home and abroad. On U.S. soil, longshoremen on the east coast stood firm in their advocation for a wage increase. The International Longshoremen’s Association (ILA) strike lasted only three days before contract negotiations were reinitiated. The magnitude of the strike’s economic implication was quickly recognized and addressed by corporate America.
While dockworkers advocated for their wellbeing, both presidential candidates advocated for their credibility. The weeks leading up to voting day are critical to leave a lasting impression with American voters. Donald Trump seemed to shine in this regard by appearing as a guest on the Joe Rogan Experience podcast. Joe Rogan’s podcast has built a reputation on delivering credible and transparent information to its audience – a smart move for Trump to associate himself with this image. In contrast, Kamala Harris fought an uphill sociopolitical battle. Between her appearance as a guest on the gossip-centered Call Her Daddy podcast and Harris’s previous associations with Joe Biden, Harris left Americans with a less credible impression.
International political tensions also increased with Israel and Iran executing destructive arms activities against one another. The warfare has everyone watching oil commodities markets closely for any sign of adverse impact to oil prices. In a time where everyone is vying for self-empowerment, nations are no exception. Reports of alliances strengthening among the emerging B.R.I.C.S. group trickled into the media as well this past month. In spite of drought and war, Russia is becoming the first choice as a wheat supplier for more countries in Asia and Africa. The combination of a better product (higher protein content and cheaper price) and common political interests is adding strength to the emerging global power to rival Western Allies.11
market plan
How I’m Playing the Markets
Going into November, I’m continuing to actively trade the equities markets. I stick to momentum plays in all market phases for two reasons: it’s my strongest skill at this time, and also my highest probability strategy.
I’m staying actively invested in the short-term bonds market, specifically 4-week treasuries. I’m keeping watch of the yield curve to stay invested in the best debt instrument for my portfolio.
The real estate market is unfavorable for buyers at this time, so I will continue to remain uninvested in this market.
I’ve not yet been introduced to trading commodities markets, so I have no plans to trade these instruments next month.
Overall, November will see my portfolio continue to rely on short-term capital gain strategies. Best of luck to you investors and traders – stay profitable!
Upcoming Events
nov
4
Presidential Election of the United States
K. Harris
vs.
D. Trump
nov
7
FOMC Interest Rate Decision
0.5% cut
vs.
0.25% cut
nov
28
Thanksgiving – Markets CLOSED
About the Author
Michelle Salene
Michelle is an active participant in U.S. capital markets.
Michelle began retail real estate investing in 2017. She later started retail equities trading in 2022, and retail bond investing in 2023.
In 2024, Michelle opened Salene Capital, Inc., a private proprietary firm, to conduct her trading activities.
Legal Disclaimer: All content and statements provided are for informational purposes only and are not investment advice. The statements herein are the opinion of the author only. The author is not responsible for readers’ financial nor personal investment decisions. All information should be individually and independently evaluated prior to making financial investing and trading decisions.