|AUTHOR: Jason Roque, CFP®, APMA®, AWMA®
TITLE: Investment Adviser Rep – CCO
TAGS: S&P 500, FRB, Microsoft, Goods Orders, Black Friday
We are Thankful for four straight weeks of market gains. Should more of the same be expected through year end?
Monday S&P 500 0.74% | NASDAQ 1.13%
20-year Treasury bonds led the day, with an oversubscribed auction. The move shifted rates lower and gave the markets room to run. Lower rates expectations favor growth stocks, which led to the NASDAQ’s outperformance. Helping matters was the aggressive response from Microsoft to the firing of Sam Altman. They were ready to scoop him up and any OpenAI employees that wanted to jump ship.
Tuesday S&P 500 0.20% | NASDAQ 0.59%
The earnings season is all but over, but Nvidia reported earnings on the day. The company beat expectations on both earnings and revenue, however, the stock dragged markets lower. Their forward guidance on the effect of restrictions on selling to China soured the outlook. Existing home sales continued to weaken as they fell 4.1% in October. Elevated rates likely played an elevated role in the effect on housing. Additionally, Federal Reserve Board (FRB) minutes from the last meeting were released. They were promising in that rates may be at their ceiling, however this was not enough to lift markets.
Wednesday S&P 500 0.41% | NASDAQ 0.46%
Durable goods fell more than expected on the day. This, however, had a minimal impact as core durable goods were even on the month. Core durable goods strips out the volatile transportation factor. An OPEC+ meeting was cancelled as an agreement on production cuts could not be reached. This sent oil lower along with inflation expectations.
Thursday S&P 500 0.00% | NASDAQ 0.00%
Friday S&P 500 0.06% | NASDAQ 0.11%
It was a light trading day with markets on shortened hours and little economic data on the day. Black Friday brought positive consumer spending, but the target of their spending was sharply focused on discount goods. This signals a more cautious consumer. The consumer is expected to spend more this year than last, albeit with a keen eye for deals.
Conclusion S&P 500 1.00% | NASDAQ 0.89%
This ended up being the fourth consecutive weekly gain for markets–although the gains were more moderate than in past weeks. The path for a year-end rally is forming:
- The FRB is projected to leave rates unchanged.
- Black Friday sales signaled a resilient consumer.
- Inflationary pressures (oil) appear to be abating.
Should this pattern hold, the Santa Claus rally could come early…
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