Market Update - October 25th 2024
Despite economic concerns, consumer spending remains strong, particularly among higher-income groups, helping to offset financial pressures faced by many households. Last week, mortgage applications dropped 7.2% as rates climbed to 6.52%. Retail sales rose 0.4%, showing growth but likely to slow as liquid assets decline. Meanwhile, hurricanes skewed spending patterns, boosting sales at miscellaneous stores while electronics, furniture, and gasoline sales fell. The housing market saw minor improvements, though rates remain too high for significant recovery.
This resilience suggests the Federal Reserve will cautiously proceed with a 25 basis point cut in December, already reflected in the futures market. Strong data is also pushing Treasury yields slightly higher.
In the crypto market, attention is on the U.S. election, with polls showing a narrowing gap in favour of Donald Trump, who is pro-Bitcoin. Meanwhile, Kamala Harris is shifting the Democratic Party toward a more balanced approach to crypto, promoting innovation with consumer protections, contrasting with the Biden administration's strict regulatory stance. The perceived dichotomy between Harris and Trump might not be as great as the market currently thinks.
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