November Ends on a High Note
The major indices finished up on the week led by small cap indexes such as the Russell 2000. The S&P 500index rose +0.8% last week, its fifth straight weekly gain. The S&P 500 concluded its strongest month in more than a year and began December on a high note.
The S&P 500 ended the week at 4,595 up from the prior Fridays close at 4559. The index is now back up 20% YTD but remains flat to down for the 2-year period. While strong, the market has gone from oversold at the end of October to short-term “overbought” territory as we enter a normally choppy first 2 weeks in December. Volatility has “collapsed” lower, as our team previously expected, with the spot Vix Index nearing its historically low level of 12-12.5 (ex- 2017).
The fresh 2023 closing high came a day after the S&P 500 closed November with an +8.9% rise, the largest monthly increase since July 2022. Lower inflation readings during November helped temper investors’ interest-rate concerns.
The S&P 500 enters December with a year-to-date gain of +20%. Last week’s climb was led by many YTD laggards including the real estate sector, which rose +4.6%, followed by a +2.6% gain in materials and a + 2.1% rise in industrials. Other gainers included financials, consumer discretionary, utilities, consumer staples, health care and technology. Only communication services and energy fell on the week.
Crown Castle (CCI) led the real estate sector higher rising more than +14% last week as investor Elliott Investment Management made activist calls to the current management team.
The materials sector’s gainers included shares of Packaging Corp of America (PKG), which climbed +9.4% as Wells Fargo increased its price target on the containerboard company’s stock to $173 each from $147.
The decliners in communication services included shares of Google parent Alphabet (GOOGL) amid a report that Microsoft (MSFT) is looking to set up its own mobile app store in a bid to challenge the dominance of Alphabet and Apple (AAPL). Alphabet’s Class A shares fell -3.5%.
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