This report is from today's CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.
What you need to know today
Spooky October
Major U.S. indexes inched up Tuesday, but ended October in the red — giving them a three-month losing streak. Likewise, the pan-European Stoxx 600 index added 0.6%, but still logged its worst monthly performance since September 2022. BP's London-listed shares sank 4.6% after the oil company missed estimates on its third-quarter profits.
Some good, some bad
Euro zone inflation in October dropped to a two-year low of 2.9%, according to preliminary data from Eurostat. That's lower than economists' estimate of 3.1% and a marked drop from 4.3% in September. The bad news: Gross domestic product in the euro zone contracted 0.1% in the third quarter, compared with the expectation that it'd remain unchanged from the previous quarter.
Next year will be better
AMD reported third-quarter earnings and revenue that beat expectations. But the chipmaker's fourth-quarter sales forecast came in at $6.1 billion, below the $6.37 billion analysts were looking for. Nonetheless, AMD thinks 2024 will prove a better year for its artificial intelligence chip business — the firm's one of the few chipmakers capable of manufacturing the high-end chips that generative AI relies on.
Loud and clear
Markets have embraced the Federal Reserve's message of higher-for-longer interest rates, according to the CNBC Fed Survey. The 31 respondents — which include economists, strategists and analysts — believe the Fed will keep rates unchanged until September next year, when the central bank will finally start cutting rates.
[PRO] November reign
Markets were merciless in October: Stocks and bonds fell in tandem. Right now, however, both asset classes are showing signs that they might pick up in November, writes CNBC Pro's Bob Pisani. Another reason to cheer: November has been the best month for the S&P historically.
The bottom line
The last day of October was sweet for markets, but it was more trick than treat for the rest of the month.
Major indexes managed to finish the day in the green. The S&P 500 rose 0.65% — pulling it out of correction territory, the Dow Jones Industrial Average climbed 0.38% and the Nasdaq Composite was 0.48% higher.
But this final sprint couldn't help stocks outrun a dismal October, which was haunted by the 10-year Treasury yield breaching the 5% level for the first time in 16 years. On a monthly basis, the S&P fell 2.2%, the Dow 1.4% and the Nasdaq 2.8%. All three indexes declined for three consecutive months — the first time for the S&P and Dow since March 2020.
In fact, this is just the ninth time since 1928 the S&P has fallen consecutively from August to October, according to Bespoke Investment Group. But history presents a silver lining: The last two times the S&P fell during those months, it rallied 3.42% and 5.99% in the following November, the group said.
The Federal Reserve's decision on interest rates, expected Wednesday, might give stocks another boost. "If the Fed comes out and says they're probably done for the year, gives hints that they're feeling more dovish, that could be one thing that really helps," said Ross Mayfield, investment strategy analyst at Baird.
And stocks certainly do need help. Even the Magnificent Seven stocks that led most — if not all — the gains in the S&P this year have been struggling in October. Tesla, most significantly, is down 20.5% for the month, while Nvidia has dropped more than 7% and Alphabet's 5.8% lower. Only Microsoft and Amazon have advanced for the month.
But nothing lasts forever: Even cold November rain may wash away the bitter taste of the past three months.
