The September trade deficit fell to 105 billion dollars, below expectations; Goldman Sachs raised its tracking estimate for fourth-quarter GDP growth at a quarter-on-quarter annualized rate to 1.9%. October ADP employment increased by 86 thousand, but the bank kept its nonfarm payroll forecast unchanged.
US CPI inflation rose to 3.7% year over year in September. Real wage growth continues to support spending, but lower-income households face greater pressure from energy costs. Bernstein expects consumers to remain focused on value for money, with varying effects on retail, restaurants and home improvement.
As of 2 November, prediction markets implied a probability above 70% of Democrats winning a Senate majority, up from about 60% two weeks earlier; the probability for the House exceeded 90%. Goldman Sachs believes the House outcome matters more for the policy outlook, but key Senate races remain within polling margins of error.
US real GDP grew at an annualized quarter-on-quarter rate of 3.4% in the third quarter, but investment growth was concentrated in AI, while consumption also relied on a decline in the saving rate. JPMorgan expects growth to slow in the fourth quarter and judges that the Federal Reserve will raise rates in December.
The October survey shows that US consumers’ net outlook for the economy remains negative, while expectations for household finances and short-term spending continue to improve; Morgan Stanley expects benefit cuts to weigh on consumption growth in 2027.
The US will release manufacturing and services ISM data, job openings and nonfarm payrolls during the week, and hold midterm elections; the earnings and overseas economic calendars are also busy.
The Goldman Sachs Analyst Index fell to 49.1, with its new orders component dropping to its lowest since May 2020; however, both manufacturing and services survey trackers edged up, and surveyed companies remained relatively optimistic about capital spending next year.
The ISM manufacturing index rose to 55.5 in October, but the final S&P Global manufacturing PMI was revised lower; construction spending fell 1.9% month over month in September, and Goldman Sachs maintained its fourth-quarter GDP growth tracking estimate.
Long-term US forward rates recently retreated after reaching 5.2%, close to the peak policy rate of the previous tightening cycle. Goldman Sachs says when markets confirm that the current cycle of rate hikes is over will affect whether forward rates can fall further.
Prediction markets put the probability of a Democratic House victory above 90%, but the Senate race is less certain. Goldman Sachs expects no major shift in fiscal policy over the next two years, with spending potentially rising slightly while the effective US tariff rate may still increase.
US growth was strong in the third quarter, but Citi expects a slowdown in the fourth. Its baseline forecast calls for another 25-basis-point Fed rate hike in December; if stocks continue to fall or the economy weakens, the next move could instead be a rate cut.
US third-quarter GDP growth rose to an annualized 3.4% from the previous quarter, supported by both AI investment and consumer spending. Morgan Stanley believes productivity gains allow the economy to accommodate faster growth, but an oil price shock and a broadening of demand could alter the rate-hike path.
US core inflation remains high, while investment and consumption support third-quarter growth. Nomura believes that after pausing rate hikes in October, the Fed will hike once more in December and hold rates steady throughout 2027.
Core CPI and PPI both rose faster month over month in September than in the prior month, but institutions disagree on whether price pressures will persist. After leveraged positions in US stocks were unwound, changes in earnings and interest rates became central to valuation assessments.
The Federal Reserve kept rates at 3.75%–4.00%, with two officials favoring a hike. Markets read the meeting as slightly dovish but still bet on a hike in December; Morgan Stanley expects fewer subsequent hikes than markets have priced in.
US real GDP grew at an annualized quarter-on-quarter rate of 3.4% in the third quarter, with strong consumption and investment in AI-related equipment; Goldman Sachs expects consumption to slow as fiscal stimulus fades, bringing fourth-quarter growth down to 1.8%.
Citi expects the Fed to hold rates steady in October, but Chair Warsh may continue to signal that the hiking cycle is not over; the bank’s forecast for a December hike differs from the market pricing shown in the report.
The Federal Reserve held interest rates unchanged in October after its previous hike. Goldman Sachs believes the meeting language and the chair’s remarks support a pace of hikes at every other meeting, but another hike next March remains possible if inflation exceeds the bank’s expectations.
A title insurance waiver could save eligible refinancing borrowers 500 to 1500 dollars, but its coverage may be limited; other measures also largely involve existing arrangements or constraints on implementation timing.
The October consumer confidence index rose to 91.7, far exceeding forecasts; new-home sales edged down in September but beat Goldman Sachs and market expectations.
