Last Week’s Summary
- S&P 500 Index rose 1.35%
- International Equities fell 0.70%
- Emerging Markets rose 0.03%
- U.S. 10-Year Treasury Yield rose to 4.65%
- Initial Jobless Claims stayed at 217k
- U. of Mich. Sentiment fell to 60.4
- U. of Mich. 1 Yr. Inflation rose to 3.2%
What to Watch for This Week
- M, 11/13/23 NY Fed 1-Yr. Inflation
- T, 11/14/23 CPI, CPI Core
- W, 11/15/23 PPI, PPI Core, MBA Mortgage Apps, Empire Manufacturing
- Th, 11/16/23 Initial Jobless Claims, Industrial Production
- F, 11/17/23 Housing Starts
Weekly Market Recap
The S&P 500’s technology sector rebounded, propelling the index to a seven-week high, despite a relatively uneventful week in the news. Many chartists viewed breaking above the key 4,400 mark and the 100-Day Moving Average as bullish signs.
The November rally in stocks continued, supported by a calm bond market and no major surprises from Federal Reserve speakers. Although Ten-Year Yields remained largely unchanged, the previous session saw a surge triggered by a weak 30-Year bond sale and Jerome Powell’s “sterner” tone on policy.
Powell emphasized that officials wouldn’t hesitate to tighten policy further if necessary, signaling a more hawkish stance compared to previous remarks. His comments led traders to factor in slightly higher odds of an additional hike, pushing back the anticipated 25-basis point rate cut from June to July.
This “sterner tone” indicates an effort to resist further easing of financial conditions, keep rate cut expectations in check, and maintain the option of additional hikes. The market will look for guidance from this week’s CPI data on whether there is a threat to Powell’s stance.
The VIX index experienced its longest slide since October 2015 this week, hovering at a level last seen in mid-September. Buoying U.S. equities, corporate earnings played a significant role, with over four in five S&P 500 companies surpassing estimates.
While oil rebounded from weekly lows, it recorded a third consecutive weekly drop, closing below $80 for the first time since July. Growing concerns over global demand and the unwinding of the Israel-Hamas war’s risk premium contributed to the decline.
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