Monthly markets recap: Earnings season, UK’s Autumn Budget and another NFP miss

Join us for a look back at some of the top market-moving stories from October.

October 2021 markets recap

US jobs start the month with another nonfarm payrolls miss

The US labour market didn’t exactly storm out to an early lead. October’s nonfarm payrolls report, which showed jobs data for September 2021, showed another big miss.

That marked two consecutive months of nonfarm payrolls failing to meet estimates.

October’s jobs report showed 194,000 new roles were created in the United State’s labour market. Forecasts called for 500,000 new jobs.

Government positions showed the highest drop in October’s print. The numbers showed a 123,000 fall in the government payrolls. Private payrolls, on the other hand, increased by 317,000.

The unemployment rate provided a few rays of sunlight through the jobs smog. It edged lower, with the rate currently sitting at 4.8%.

There is still a lot of work to be done in the US labour sector. Fed officials have said they still see the labour sector way below full employment levels.

The job data for October is released on Friday 5^th of November. Stay tuned to Markets.com for more updates.

 UK launches Autumn budget with big spending plans ahead

Chancellor Rishi Sunak laid out his spending plans in 2021’s Autumn Budget in October. On the whole, the outlook for the UK economy was better than some economists had predicted – but the spending needed to prop it up is going to come directly from taxpayers’ pockets, despite tax cuts.

On the whole, economic observers were disappointed. GBP/USD 0.2% slipped in intraday trading as the budget failed to set the world on fire.

Key takeaways are:

• Inflation to run at 4.4%
• UK economy to grow 6.5% this year – still below pre-pandemic levels
• Government departmental spending will hit £150bn – the highest level this summer
• £67bn to be spent on road and rail transport links
• Reduced duties on sparkling wine and draft cider – popping UK hospitality stocks like JD Wetherspoon by up to 5%

One key thing to note was the influence of Brexit on not just this budget but the UK’s fiscal health in general.

The Office of Budget Responsibility (OBR) forecast that the United Kingdom’s trade with the EU will fall 15%. That could translate into a 4% drop in overall productivity. All told, the OBR believes Brexit will do more damage than the COVID-19 pandemic. The saga of (potential) woe is only just starting.

Bank of England rate decision took on renewed focus

Our Chief Markets Analyst Neil Wilson took a stab at predicting whether the Bank of England will raise rates in November in this month.

It’s been a question that’s on everyone’s minds for a while: will the Bank of England really raise rates?

There is a lot at play that is causing some concern for the more dovish members of the Bank’s Monetary Policy Committee (MPC). They think that raising rates now might be a mistake in an era of high inflation and high taxation.

But something has to be done. Governor Bailey has made overtures about increasing the bank rate as one of the levers the BoE could use to control inflation. Sentiment still seems split amongst MPC members, despite what the Bank’s head thinks.

Volvo IPO shifts into overdrive

Volvo cars went public with shares jumping 22% in value on the launch, giving the Chinese-owned Swedish carmaker a valuation of $22bn.

The automobile manufacturer generated $2.3bn via its float.

In our preview of the Volvo IPO, we detailed how the company plans to develop going forward. It’s going green – or at least trying to. With the billions raised by its stock market debut, Volvo can now turn its attention to transforming its product range. That means new electric models and new hybrids, before going fully electric by 2030.

Volvo spin-off and Tesla rival Polestar is also set to go public in a SPAC worth upwards of $10bn.

The Volvo stock CFD is available to trade now on the Markets.com platform. Trading is risky. You may lose money. Only trade if you are comfortable taking any potential losses.

It’s earnings season

October also saw the start of third quarter earnings season on Wall Street.

The reports have been coming thick and fast. So far, it looks like Tesla and the FAANG stocks are amongst this season’s big winners.

Tesla, for example, managed to avoid the same pitfalls seemingly all major car manufacturers have fallen into across the pandemic and post a record-breaking quarter for vehicle deliveries.

Netflix was able to translate the success of its exclusive content like Squid Game into higher sub counts, coming in above Wall Street expectations.

Google parent Alphabet drew on substantial ad revenues to boost its takings in the third quarter.

And, despite revenues missing forecasts, Apple showed huge growth in some of its key segments, such as iPhone sales and its services sector.

There is still a couple of weeks of earnings season still to go. Keep visiting Markets.com for more updates.

Don’t forget to check our November preview too for the events to watch over the coming month