Dow Rises As Q3 GDP Data Exceeds Expectations | Daily Analysis Market

Key events:

USA - Core PCE Price Index (MoM) (Sep)

Canada - GDP (MoM) (Aug)

USA - Pending Home Sales (MoM) (Sep)

The U.S. stock market fluctuated after data showed the U.S. economy grew in the third quarter after two quarters of declining output.

The Dow Jones rose 305 points, or 1 percent, while the S&P 500 fell 0.1 percent and the NASDAQ Composite fell 0.7 percent.

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Initial data from the U.S. Commerce Department on Gross Domestic Product for the latest quarter showed an increase of 2.6%. At the same time, the core PCE price index matched expectations and slowed in the second quarter.

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Third-quarter GDP can be compared to a 0.6% drop in the second quarter and a 1.6% drop in the first quarter; in addition, it also beat expectations for a 2.4% growth in the third quarter. Traditionally, declines for 2 consecutive quarters have been indicative of a recession, but the Biden administration has consistently argued that the economy is not in a recession, especially given the strength of the labor market.

Exports of industrial supplies and materials, tourism, and financial services rose and consumer spending increased. Housing investment is down.

Last week's 217,000 new jobless claims also came in below expectations. On Friday, investors will see data on a key inflation indicator monitored by the Federal Reserve.

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Shares of Meta Platforms Inc* (NASDAQ: META) fell 23% after the company reported a drop in revenue and earnings and profits amid rising costs. Facebook's parent company is downsizing amid a drop in digital advertising.

Shares of McDonald's Corporation (NYSE: MCD) rose 3% after the fast-food chain beat expectations for the quarter and said traffic was up despite higher menu prices.

Oil rose in price. WTI futures rose 1.8% to $89.56 a barrel and the Brent contract rose 1.2% to $94.89 a barrel. Gold futures fell 0.4% to $1662.

The U.S. dollar remained the most popular currency in the world in 2022, and the yuan was in the top five, surpassing several competitors, according to a study by the Bank for International Settlements (BIS), published every three years. The BIS survey compares data as of April of each year.

The report, released Thursday, said global foreign exchange trading volume hit a new record of $7.5 trillion a day in April this year, up 14 percent from 2019.

The rate of growth was among the weakest since BIS began publishing such studies in 2014, "even though the data collection coincided with increased volatility in the currency market as a result of changing expectations about the future direction of interest rates in developed countries, rising commodity prices and a spike in geopolitical tensions resulting from Russia's invasion of Ukraine," the BIS report said.

Currency swaps accounted for about 50% of global trading (49% in 2019), another 28% of spot trading (30% in 2019), and 15% of direct forward contracts.

The U.S. dollar was one of the participants in trading pairs in 88% of transactions, the same as three years ago. The second place in the list of the most popular world currencies is occupied by the euro - its share decreased to 31% from 32%. The pound sterling and the yen retained the third and fourth positions in the ranking with 17% and 13%, respectively.