CB Leading Index Drops 0.8% In October

Key Insights

• CB Leading Index declined by 0.8% month-over-month in October, missing analyst expectations. 
• Over a six-month period, CB Leading Index decreased by 3.3%. 
• SP500 settled near multi-month highs as traders remained focused on the favorable Fed policy outlook.

On November 20, The Conference Board released CB Leading Index report for October. The report indicated that CB Leading Index declined by 0.8% month-over-month, compared to analyst consensus of -0.7%.

The Leading Economic Index declined by 3.3% over a six-month period between April 2023 and October 2023, compared to a 4.5% contraction over the previous six months from October 2022 to April 2023.

The Conference Board commented: “Among the leading indicators, deteriorating consumers’ expectations for business conditions, lower ISM Index of New Orders, falling equities, and tighter credit conditions drove the index’s most recent decline.”

The Conference Board expects that a combination of elevated inflation, high interest rates, and contracting consumer spending would push the U.S. economy into a very short recession.

U.S. Dollar Index is close to session lows near the 103.50 level as traders stay focused on the end of the rate hike cycle. The weaker-than-expected report may put additional pressure on the American currency.

Gold pulled back towards the $1970 level despite weaker dollar. It looks that demand for the safe-haven gold is declining as traders do not see strong catalysts that may push gold above the key $2000 level.

SP500 tested session highs near the 4530 level. Fed policy outlook remains the key driver for equity markets. Traders expect that Fed will start cutting rates in the first half of 2024 and ignore recession risks.

For a look at all of today’s economic events, check out our economic calendar.