Approaching the Holidays and a Pause

This Monday morning, markets are marginally higher on the back of technology and energy stocks rallying.  Last week’s bond-friendly data included a decline in retail sales ahead of the holiday shopping season.  This should cause a sharp deceleration in Q4 real GDP growth to the 1-2% level from the grossly overstated almost 5% in the third quarter.  A friendly, but not unexpected by the OHFG team, U.S. CPI report that sent the S&P 500 up +2.2% last week and +18% so far in 2023 off a very depressed 2022 level.

Interest rates dropped -21 bps last week to near two-month lows. The 2-year rate at 4.90% is below 5% on speculation of Fed rate cuts next year. Oil prices are up this morning although still below $77. OPEC+ will meet on November 26 to discuss possible output cuts with the price down nearly -20% since September to four-month lows.

Last week’s data showed US seasonally adjusted consumer price index, a closely followed measure of inflation, slowed to a flat reading in October, missing expectations for a 0.1% gain. Core CPI (excludes food and energy prices) rose by 0.2%, smaller than the consensus estimate for a 0.3% increase.

The US producer price index, meanwhile, fell -0.5% sequentially last month on a seasonally adjusted basis when a 0.1% increase was expected. Excluding food and energy, monthly PPI was flat month over month after rising 0.2% in September and was below the 0.3% gain analysts had modeled.

Chipmaker Nvidia’s earnings on Tuesday are a focal point of this Holiday shortened week.  The Fed Minutes for the last policy meeting, due Tuesday, are likely to message that the FOMC: isn’t wanting to raise rates again; but it’s more likely to lift rates than cut them if need be; and, it’s unlikely to cut them for some time.

The S&P 500 ended the week at 4,514, up from last Friday’s closing level of 4,415. The index is now up +8.7% for the month of November, putting the S&P 500 on track for its largest monthly gain this year. Recall it fell hard into the end of October.

“Stock Talk” can be found by clicking on this link and subscribing to its own content. Alternatively, you can type “Stock Talk with Chris” in the You Tube search box, and you should be directed to the new content.  The investment content will be a “sub-channel” under our current OHFG channel.  Please subscribe if you are interested.

Watch the Oak Harvest Weekly Stock Talk: The End is Near!?

Week Ending November 10, 2023 (Cumulative Total Returns)