Due to the Thanksgiving holiday in the US, the coming week will be a shorter one for US markets - closed on Thursday and closed at 13:00 on Friday. Nevertheless, among other US macroeconomic data, Existing Home Sales and Composite PMI will be released, in addition to German GDP growth data, which may clarify whether the EU's largest economy continued to contract in Q3 2023.
Table of contents:
- US Existing Home Sales (October)
- Germany Gross Domestic Product (GDP) QoQ (Q3)
- US Composite Purchasing Managers Index PMI (November)
- Stocks to watch
Tuesday 21.11. 15:00 GMT, US Existing Home Sales (October)
Existing Home Sales is an economic indicator published by the National Association of Realtors that measures the number of existing single-family home sales in absolute numbers and as a percentage change compared to the previous month. A high number would indicate that the housing activity may be high, leading to strong economic growth. Although a lagging indicator, existing home sales are closely watched by investors as they represent consumer demand driven by factors like interest rates, unemployment, and household income. Existing Home Sales are reported for the national overall as well as a breakdown in four regions: West, Midwest, South, and Northeast.
In September 2023, sales of pre-owned homes in the United States experienced a 2% decline compared to the previous month, reaching a seasonally adjusted annualized rate of 3.96 million units, marking the second time (after May 2020) this figure dropped below 4 million units since October 2010. However, this result slightly exceeded market expectations, which anticipated 3.89 million units. The decline is consistent with other reports over the same period, with rising mortgage rates discouraging potential first-time buyers and preventing homeowners from selling properties acquired at lower mortgage rates.
Specifically, single-family home sales saw a 1.9% decrease to 3.53 million, and co-op sales dipped by 2.3% to 430,000 units. Concurrently, the median prices for existing home sales surged by 2.8% year-on-year to 394,300 USD. Despite the significant price increase, the total housing inventory at the end of the month rose by 2.7% to 1.13 million units.
According to consensus forecasts, October's data on Existing Home Sales are expected to decrease further to 3.92 million units.
Source: Tradingeconomics.com
A higher-than-expected reading may have a bullish effect on the USD, while a lower-than-expected reading could be bearish for the USD.
Impact: USD
Friday 24.11. 07:00 GMT, Germany Gross Domestic Product (GDP) QoQ (Q3)
Gross domestic product (GDP) indicates the total value of goods and services produced in a country for a certain period. GDP is an important indicator of the health of an economy because it gives an overall picture of how well or poorly it is doing. If the GDP growth is higher than expected, the economy is in good shape and growing faster than expected. On the other hand, if the GDP growth is lower than expected, the economy performs weaker than anticipated. Furthermore, if the GDP growth is negative for two consecutive quarters, it may be considered a technical recession due to contracting economic output.
According to an initial estimate, the German economy contracted by 0.1% in the third quarter, reversing the upwardly revised 0.1% expansion in the previous three months and beating market forecasts of a 0.3% contraction. The main factor contributing to the decline in GDP was a fall in private consumption, influenced by rising interest rates and persistently high inflation. Conversely, there was growth in equipment investment over the period. On an annual basis, GDP contracted by 0.3%, in contrast to the previous period when it was unchanged and against market expectations of a 0.7% decline.
Source: Tradingeconomics.com
A higher-than-expected reading may have a bullish effect on the EUR, while a lower-than-expected reading could be bearish for the EUR.
Impact: EUR
Friday, 24.11. 14:45 GMT, US Composite Purchasing Managers Index PMI (November)
The Composite PMI index is a monthly indicator produced by S&P Global that measures economic activity based on original survey data collected from a representative panel of around 800 companies based in the US manufacturing and service sectors. As reported by purchasing managers, the PMI provides insight into the manufacturing and service industries' activity levels. This measure provides an understanding of the state of US manufacturing and service industries, as it is assumed that purchasing managers have access to first-hand data on the performance of their companies. A reading above 50 indicates expansion, while a reading below 50 indicates contraction.
The S&P Global US Composite PMI for October 2023 was adjusted slightly downward to 50.7, a decrease from the initial estimate of 51.0 and higher compared to the 50.2 recorded in the preceding two months. This updated figure suggested a modest increase in business activity among private sector firms, with manufacturers and service providers witnessing a faster rise in output despite challenging demand conditions. The ongoing decline in new orders and exports persisted, although employment levels saw growth, primarily propelled by the service sector. Regarding prices, both input and output cost inflation rates decelerated to a three-year low.
Source: Tradingeconomics.com
A higher-than-expected reading may have a bullish effect on the USD, while a lower-than-expected reading could be bearish for the USD.
Impact: USD
Stocks to watch
NVIDIA (NVDA) announcing its earnings results for the quarter ending on 10/2023. Forecast EPS: 3.35. Positive earnings surprise in 9 out of the last 10 reports. Time: Tuesday, November 21, after the market closes.
Deere&Company (DE) announcing its earnings results for the quarter ending on 10/2023. Forecast EPS: 7.55. Positive earnings surprise in 9 out of the last 10 reports. Time: Wednesday, November 22.
PDD Holdings DRC (PDD) announcing its earnings results for the quarter ending on 10/2023. Forecast EPS: 8.91. Positive earnings surprise in 7 out of the last 10 reports. Time: Thursday, November 23.
Santa Zvaigzne-Sproge, CFA, Head of Investment Advice Department at Conotoxia Ltd. (Conotoxia investment service)
Materials, analysis, and opinions contained, referenced, or provided herein are intended solely for informational and educational purposes. The personal opinion of the author does not represent and should not be constructed as a statement, or investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
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