Economic data showed that industrial profits were trending lower in China. Policy stimulus could have a major impact on China’s economy, where demand is closely tied to global growth. But the details of any supportive fiscal policy are unlikely to be released until after a policy meeting concludes on November 8. China’s annual growth target is roughly 5%. Growth for the third quarter of 2024 was 4.6% with ongoing property sector weakness.

• The National Bureau of Statistics announced that industrial profits fell by 27.1% in September year-over-year. This represents the sharpest decline since the beginning of 2020. Industrial profits fell by 17.8% in August.
• Soft demand and complications in the real estate market might have contributed to the weakness. Other notable segments under pressure include materials and automobiles.
• Producer prices for September fell by 2.8% year-over-year. Prices declined by 1.8% in August. Deflationary pressures and softer demand suggest that economic stimulus might be welcome. The manufacturing purchasing managers’ index will be released on Thursday.
• Stimulus efforts announced to boost growth. Domestic demand is the target of stimulus that is expected to be announced by China in November. Trade policies between the US and China have been a hot topic in the US presidential election race, which concludes next week on November 5.

In North America, earning results from five of the “Magnificent 7” this week will help give investors a sense of the market environment. In Europe, manufacturing sentiment and inflation will be in focus in an important week ahead of the US election. More data, including US jobs growth and the Personal Consumption Expenditures Index, will help the US Federal Reserve Board assess economic conditions ahead of its interest-rate decision on November 7.

If you would like to discuss this economic and market update or have questions about your finances and investments, please feel free to contact me anytime.