November 25, 2022, Weekly Equity Market Recap. All three US equity indexes ended the week higher on the short holiday week. The Dow led up +1.78%, followed by the S&P 500 +1.53% while the tech-heavy Nasdaq lagged but still finished up +0.72%. The equity markets were buoyed by Fedspeak where the minutes from the November Fed meeting showed that the central bank anticipates slowing the pace of interest rate hikes going forward. The market is also looking for signs of a slowing economy to boost hopes of a less hawkish Fed and the week showed some sluggish signs. The number of Americans filing new claims for unemployment benefits rose more than expected and U.S. business activity contracted for a fifth straight month in November.
November 18, 2022, Weekly Equity Market Recap. All major equity index averages posted losses for the week, led by the Nasdaq -1.57%, followed by the S&P 500 -0.69% - the Dow Jones finishing about flat. We can expect choppiness with Fed hikes hitting economic and earnings growth ahead. Fedspeak was rather muted on the week except for Collins who said services inflation is still too high. However, recent CPI and PPI data indicate that inflation has finally peaked, and price spikes are likely behind us. There is also a push and pull between bouts of good and bad economic news. For example, there has been mass layoffs announced in tech companies while bellwether companies like Amazon (laying off 10k+) and Federal Express (furloughing drivers) have sent negative economic signals. Increases in interest rates are also hurting housing, with existing home sales falling for a ninth straight month in October; marking a two-year low pace of 4.4 million. In contrast, consumer balance sheets are still in good shape with around $1.7 trillion in excess savings and this was reflected with retail sales rising to a seasonally adjusted 1.3% in October compared with September.
November 11, 2022, Weekly Equity Market Recap. The S&P 500 surged 5.9% for the week on news that US consumer prices rose 7.7% in October, marking the slowest pace of annual increase since January. The CPI inflationary rate was down from 8.2% in September and lower than the 7.9% estimated by economists. Investors have been waiting for signs of when inflation might start to abate, which would show the Fed that the rate increase actions are starting to taper down consumer prices. Equity markets also got a boost from China relaxing its strict anti-COVID measures, which have been damaging the world’s second-largest economy. The S&P 500 is still off by roughly 16 percent this year while the Nasdaq is down around 28% on the year.
November 5, 2022, Weekly Equity Market Recap. After a two-week winning streak, all the major averages finished down. The S&P and Nasdaq fell 3.35% and 5.65%, respectively, while The Dow shed 1.4%. The U.S. Federal Reserve raised interest rates Wednesday by 75 basis points for the fourth straight meeting while hinting at a potential slower pace in the future as the central bank continues to try to tame multi-decade highs in inflation. The rate hike brings the central bank’s policy rate, the federal funds rate, to a new range of 3.75% to 4% — its highest level since 2008 — from a current range between 3% and 3.25%. Fed Chairman Jerome Powell said the interest-rate peak will likely be higher than the 4.50% to 4.75% committee members previously anticipated and said 'very premature' to talk about pause. This statement suggests that more than another 0.75% of rate increases are likely to be expected before the Fed halts its series of interest rate hikes. For example, Powell said the central bank expects further rate hikes at some level will be appropriate to attain a level that is “sufficiently restrictive” to get inflation back down to its 2% goal. The U.S. economy added more jobs than expected in October, but job unemployed rose to 3.7%. Corporate earnings have mostly held up but teetering toward degrading into a recession.
November 18, 2022, Weekly Equity Market Recap. All major equity index averages posted losses for the week, led by the Nasdaq -1.57%, followed by the S&P 500 -0.69% - the Dow Jones finishing about flat. We can expect choppiness with Fed hikes hitting economic and earnings growth ahead. Fedspeak was rather muted on the week except for Collins who said services inflation is still too high. However, recent CPI and PPI data indicate that inflation has finally peaked, and price spikes are likely behind us. There is also a push and pull between bouts of good and bad economic news. For example, there has been mass layoffs announced in tech companies while bellwether companies like Amazon (laying off 10k+) and Federal Express (furloughing drivers) have sent negative economic signals. Increases in interest rates are also hurting housing, with existing home sales falling for a ninth straight month in October; marking a two-year low pace of 4.4 million. In contrast, consumer balance sheets are still in good shape with around $1.7 trillion in excess savings and this was reflected with retail sales rising to a seasonally adjusted 1.3% in October compared with September.
November 11, 2022, Weekly Equity Market Recap. The S&P 500 surged 5.9% for the week on news that US consumer prices rose 7.7% in October, marking the slowest pace of annual increase since January. The CPI inflationary rate was down from 8.2% in September and lower than the 7.9% estimated by economists. Investors have been waiting for signs of when inflation might start to abate, which would show the Fed that the rate increase actions are starting to taper down consumer prices. Equity markets also got a boost from China relaxing its strict anti-COVID measures, which have been damaging the world’s second-largest economy. The S&P 500 is still off by roughly 16 percent this year while the Nasdaq is down around 28% on the year.
November 5, 2022, Weekly Equity Market Recap. After a two-week winning streak, all the major averages finished down. The S&P and Nasdaq fell 3.35% and 5.65%, respectively, while The Dow shed 1.4%. The U.S. Federal Reserve raised interest rates Wednesday by 75 basis points for the fourth straight meeting while hinting at a potential slower pace in the future as the central bank continues to try to tame multi-decade highs in inflation. The rate hike brings the central bank’s policy rate, the federal funds rate, to a new range of 3.75% to 4% — its highest level since 2008 — from a current range between 3% and 3.25%. Fed Chairman Jerome Powell said the interest-rate peak will likely be higher than the 4.50% to 4.75% committee members previously anticipated and said 'very premature' to talk about pause. This statement suggests that more than another 0.75% of rate increases are likely to be expected before the Fed halts its series of interest rate hikes. For example, Powell said the central bank expects further rate hikes at some level will be appropriate to attain a level that is “sufficiently restrictive” to get inflation back down to its 2% goal. The U.S. economy added more jobs than expected in October, but job unemployed rose to 3.7%. Corporate earnings have mostly held up but teetering toward degrading into a recession.