With the Thanksgiving holiday coming this week, I wanted to take a moment and express my thanks for all our clients, partners, and our community.
We had the pleasure of being the event sponsor for the Serving Our Kids charity golf tournament last weekend to help raise funds for food delivery to food insecure children here in the valley.
Here in the Long home we plan on eating way too much food this week and watching our 49ers battle the Seahawks of Seattle on Thursday! What plans do you have for the Thanksgiving Holiday?
Happy Thanksgiiving from your Diazo Wealth Team!
And now onto the weekly recap:
It was another winning week for the stock market. The S&P 500, which flirted with 4,100 in late October, closed above the 4,500 level on Friday. The positive bias was partially driven by a recognition that there wasn't a lot of selling activity after the big run, along with a fear of missing out on further gains during a seasonally strong time of year for the market.
Mega cap stocks contributed to index performance, but the broader market experienced more robust buying interest. The market-cap weighted S&P 500 rose 2.2% this week while the Invesco S&P 500 Equal Weight ETF (RSP) jumped 3.4%. Also, the Vanguard Mega Cap Growth ETF (MGK) logged a 2.1% gain.
The bulk of this week gains followed the October Consumer Price Index on Tuesday, which corroborated the notion that the Fed is done raising rates. That report, along with the October Producer Price Index, the October Retail Sales, the weekly initial jobless claims, and the October Housing Starts data, all seemed consistent with a soft landing scenario for the economy.
The fed funds futures market priced out the probability of any additional rate hikes by the Fed, and now sees a 61.7% probability of the first rate cut in May 2024, according to the CME FedWatch Tool.
Treasury yields took a sharp turn lower in response to the data and the idea that the Fed is done raising rates. The 2-yr note yield fell 15 basis points this week to 4.90%. The 10-yr note yield declined 19 basis points to 4.44%.
The rate-sensitive S&P 500 sectors registered some of the largest gains, but all 11 sectors traded higher this week. The real estate (+4.5%), financials (+3.3%), and utilities (+3.0%) sectors were standouts in that respect. The consumer staples (+0.6%) and energy (+0.9%) sectors were the only ones to gain less than 1.0%.
Market participants were digesting another batch of earnings news. Walmart (WMT) and Target (TGT) headlined the calendar, both making mention of a more cautious-minded consumer. Still, Target registered a big gain after reporting results. Gap (GPS), Ross Stores (ROST), and Macy's (M) were also standout winners after reporting earnings.
Leading chip equipment maker Applied Materials (AMAT) also reported earnings and logged a decline following aReutersreport that it is the subject of a DOJ criminal probe over shipments to China's top chipmaker, SMIC.
In other news, Congress passed a continuing resolution to avoid a government shutdown, and President Biden and President Xi agreed to resume high-level, direct military talks, and bilateral cooperation in combating global illicit drug manufacturing and trafficking.
Looking ahead, markets will be closed on Thursday and close at 1:00 p.m. ET on Friday in observance of Thanksgiving.
| INDEX | STARTED WEEK | ENDED WEEK | CHANGE | % CHANGE | YTD % |
|---|---|---|---|---|---|
| DJIA | 34283.10 | 34947.28 | 664.18 | 1.9 | 5.4 |
| Nasdaq | 13798.10 | 14125.48 | 327.38 | 2.4 | 35.0 |
| S&P 500 | 4415.24 | 4514.02 | 98.78 | 2.2 | 17.6 |
| Russell 2000 | 1705.32 | 1797.77 | 92.45 | 5.4 | 2.1 |
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The data provided is for informational purposes only and is not an endorsement of any security, mutual fund, sector, or index. The information contained here is not guaranteed as to accuracy or completeness. All economic and performance information is historical and does not guarantee future results.
The Dow Jones Industrial Average is a price-weighted index comprising 30 widely traded blue chip U.S. common stocks. The NASDAQ Composite Index is a market-value-weighted index of all common stocks listed on the NASDAQ stock exchange. The S&P 500 Index tracks the performance of 500 of the largest publicly traded companies in the United States. The MSCI Europe, Australasia, and Far East (EAFE) Index tracks the performance of publicly traded large- and mid-cap stocks of companies in those regions. The Cboe Volatility Index (VIX) shows the market’s expectation of 30-day volatility and is constructed using the implied volatilities of a wide range of S&P 500 Index options. Weekly and year-to-date figures for the VIX show percentage changes, not investment returns. The Russell 2000 Index tracks the performance of approximately 2,000 publicly traded small-cap companies in the United States. It is not possible to invest directly in an index.
The Treasury yield curve is derived from available U.S. Treasury securities trading in the market and is provided directly by the U.S. Federal Reserve. The spread measures the difference in yield between two government securities. A normal (positive) yield curve occurs when longer-term rates are higher than shorter-term rates. The opposite holds true for an inverted yield curve. Year-to-date changes in U.S. Treasury bond yields are shown in basis points (bps). One hundred basis points equals one percent.
Oil prices are represented by West Texas Intermediate (WTI) crude oil.
The G20 countries comprise a mix of the world’s largest advanced and emerging economies, representing about two-thirds of the world’s population, 85% of global gross domestic product, and over 75% of global trade.