It’s a shortened holiday week that’s already testing relationships. U.S. stock futures fell, recovered, and fell anew early Tuesday, after news reports said Turkey shot down a jet fighter claimed by Russia near the Syrian border. It’s the latest in several recent global events that underline geopolitical tensions that can rattle financial markets, at the least inviting extra volatility and potentially aggravating what’s already slower global economic growth.
Those news reports say that Turkey claims the Russian warplane violated Turkey’s airspace and after several warnings, a Turkish military jet shot down the Russian jet. Turkish authorities didn’t identify the nationality of the jet, but Russia separately said one of its jets had been downed, likely by shelling from the ground, the Wall Street Journal and others are reporting.
As for markets, the news plays out against a backdrop already complicated by expectations the Federal Reserve could soon begin a rate-tightening campaign while much of the rest of the world continues to try to pump air into slow-growth economies. As such, the dollar is shooting higher once again, driving commodities prices to multi-year lows and crimping the earnings of multinational U.S. firms (more on both below).
Q3 GDP Nudged Higher. Gross domestic product—the broadest measure of the nation’s economy—rose at a revised 2.1% annual clip from July through September, data out this morning show. A month ago, an early Q3 reading pegged GDP growth at 1.5%. Street analysts credited a bigger buildup in inventories than first calculated. Spending by consumers—the main engine of the economy—rose at a 3% rate, a few ticks lower than in the first installment. A worrisome sign? Adjusted pretax corporate profits fell at a 1.1% annual rate, marking the third decline in the past four quarters.
Dollar Dents Tiffany. Tiffany TIF was out with its latest results, a report that revealed fewer little blue boxes moving out its doors. The high-end jewelry retailer said quarterly profit and sales fell relative to the year-ago comparable, with results hurt by the pinch of a strong dollar on global profits and the crimp on foreign tourist spending on jewelry in the U.S.
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