Small Caps Lead US Stock Losses, Treasuries Rise

US stocks fell, with small caps bearing the brunt of selling, and Treasuries advanced as markets struck a tone of caution at the start of a week stuffed with catalysts. The S&P 500 fell by 0.3% to 2,572.83. The Dow Jones Industrial Average lost 85.45 points (0.4%) to 23,348.74.

US Consumer Spending Rises Most Since 2009 on Car Buying

US consumer spending rose in September by the most since August 2009 as motor vehicle purchases surged in the aftermath of two hurricanes, Commerce Department figures showed. Stagnant inflation-adjusted incomes and the smallest saving rate in almost a decade indicate outlays may cool. Purchases rose 1% from prior month (est. 0.9% gain) after a 0.1% increase.

Euro Area Economic Confidence Surges to Highest in 17 Years

Euro area economic confidence surged to its highest in almost 17 years, reflecting an improved outlook for a region that not long ago was blighted by record joblessness and a double-dip recession. The index of industry and consumer sentiment rose to 114 in October from a revised 113.1 the previous month, the European Commission said. That’s the gauge’s fifth consecutive monthly increase and the strongest reading since Jan 2001.

German Inflation Slows in Evidence of Euro Area Price Struggle

German inflation slowed more than predicted in October, evidence that backs the European Central Bank’s case for keeping stimulus flowing to entrench price stability in the euro area. Consumer prices rose an annual 1.5%, the Federal Statistics Office said. That’s weaker than September’s 1.8% and below the 1.7% median forecast in a Bloomberg survey.

Spain’s Economy Maintained Momentum Before Crisis in Catalonia

The Spanish economy extended its strong performance in the third quarter, keeping up the momentum that’s now at risk from the crisis in Catalonia. Output expanded 0.8% in 3Q17, in line with a Bank of Spain estimate, the National Statistics Institute said. While the pace is down from 0.9% in 2Q17, it’s still above the 0.5% average forecast for the euro area.

Japan Retail Sales Rise for 11th Consecutive Month

Japanese spent more at retail stores last month, but that may not have been enough to cause a seventh-straight quarter of private consumption growth. Retail sales rose 2.2% yoy in September. The median forecast in a Bloomberg survey called for a 2.3% increase.

Singapore Unveils Plan to Create 4,000 Finance Sector Jobs

Singapore wants to bolster its status as a wealth management and foreign exchange center as part of plans to create more financial-sector jobs and mitigate the effect of rapid changes in technology. The Monetary Authority of Singapore (MAS) said it aims to create 4,000 net new jobs in financial services and financial technology, and achieve real growth in the sector of 4.3% annually, faster than the overall economy.

Oil Extends Two-year High as Saudis, Russia Back Prolonged Cuts

Brent crude extended its rally to a two-year high as OPEC and Russia signaled they’ll prolong supply cuts, while instability in Iraq’s Kurdish region persisted. Brent for December settlement rose US$0.46 to US$60.90 a barrel.

Source: Affin Hwang Research - 31 Oct 2017