Here are the most important news for investors to start their day:
1. November Success
Saying goodbye to November might be tough. As the month wraps up, the three major stock indices seem set to end a three-month losing streak, making it their best month this year. The bond market is playing a role, with the yield on the 10-year Treasury note dropping below 4.3% for the first time in a couple of months.
This is happening even after the revised gross domestic product (GDP) number turned out higher than expected, coming in at a 5.2% annual rate. Looking ahead, investors will keep an eye on the personal consumption expenditure report for October, an important measure of inflation for the Federal Reserve.
2. What’s It Going to Take?
With stock markets doing well again, interest rates decreasing, and the economy showing signs of slowing down, the big question is when the Federal Reserve will lower its benchmark rate again.
Many in the market expect this to happen next year. However, achieving this may require a more significant economic slowdown, including a decrease in employment. Chief fixed income strategist at Charles Schwab, points out that this cycle is different, and there’s more caution from the Fed, especially given the high inflation. In a different economic cycle, they might have already started cutting rates.
3. Go Away’ Message from Elon Musk
Elon Musk has a blunt message for companies that stopped advertising on his social media platform, X: “Go away.” Musk, who also leads Tesla and SpaceX, recently supported an antisemitic comment and has brought attention to fringe, racist views on his platform, formerly known as Twitter.
Major companies like Disney and Apple were among those that halted advertising on X. Musk has been on an apology tour following his support for the antisemitic post. This week, he visited Israel, meeting with Prime Minister Benjamin Netanyahu during a ceasefire in the nation’s conflict with the Palestinian militant group Hamas.
Musk attempted to clarify his post on Wednesday, saying, “I’m sorry for that tweet or post. I tried my best to clarify, six ways to Sunday, but at least I think over time it will be obvious that, in fact, far from being antisemitic, I am, in fact, philosemitic.”
4. Only Five Years Left
Nvidia is experiencing significant success in the field of artificial intelligence, with its revenue tripling in the third quarter due to high demand for its AI chips. The company’s CEO, Jensen Huang, anticipates even more growth as technology continues to advance.
Speaking at the DealBook Summit on Wednesday, he mentioned that if artificial general intelligence (AGI) is defined as a computer capable of completing tests in a way that’s “fairly competitive” with human intelligence, then “within the next five years, you’re going to see, obviously, AIs that can achieve those tests.” Nvidia’s stock has risen more than 200% this year.
5. Ford’s Latest Update
In response to its crosstown competitor General Motors, which provided a business update on Wednesday, Detroit-based automaker Ford shared its own status on Thursday morning. Similar to GM, Ford has reinstated its guidance for 2023 but has adjusted its expectations for earnings and free cash flow.
Before the six-week United Auto Workers strike, Ford was on track to meet its guidance for the year. However, the company withdrew its outlook when the labor stoppages occurred. With a new contract in place with the UAW, Ford now anticipates a total impact of $8.8 billion over the life of the deal, which concludes in spring 2028.
Summary
The key updates for investors include a positive outlook for November in the stock market, potential Federal Reserve rate changes amid economic shifts, Elon Musk’s controversial stance on his social media platform, Nvidia’s impressive growth in artificial intelligence, and Ford’s financial adjustments following a labor strike.
