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Weekly Market Recap (November 27th- December 1st)

Weekly Market Recap (November 27th– December 1st)

Market open (Monday, November 27th)- 

Dow Jones- 35,914.51 

S&P 500- 4,551.04

NASDAQ- 14,177.81

Market Close (Friday, December 1st)-

Dow Jones- 36,245.50

S&P 500- 4,594.63

NASDAQ- 14,305.03

 

The S&P 500 reached new heights in its latest closing, concluding Friday’s session at 4,594.63, with a 0.59% gain. The Dow extended its robust performance for the week, rallying .82% to settle at 36,245.50, and the Nasdaq made a 0.55% advance, ending at 14,305.03. This marked the fifth consecutive week of gains for these major benchmarks.

These Friday triumphs followed a remarkable November rally, snapping a three-month losing streak. The S&P and Nasdaq recorded impressive gains of 8.9% and 10.7%, respectively, marking their most substantial monthly upswings since July 2022. The Dow surged by 8.8%, achieving its best monthly performance since October 2022.

Traders fueled November’s impressive rally amid growing optimism that the Federal Reserve might halt rate hikes and potentially initiate cuts in the first half of the upcoming year. However, Federal Reserve Chair Jerome Powell, in an address on Friday, cautioned against premature conclusions about monetary policy being “sufficiently restrictive.”

Despite Powell’s reservations, the stock market remained bullish, with little impact on buying sentiment or market expectations regarding future Fed rate moves. Yields declined as stocks rose, interpreted by traders as a sign that the central bank may have concluded its hikes. The 10-year Treasury note yield dropped more than 13 basis points to 4.213%.

Powell’s remarks coincided with Thursday’s Personal Consumption Expenditures (PCE) report for October, which hinted at a positive trajectory in inflation. The PCE, the Fed’s preferred inflation gauge, showed a 3% increase in October compared to the same month in 2022. The core rate, excluding food and energy prices, met expectations with a 3.5% gain, the smallest year-over-year increase since April 2021.

Late Friday, market sentiment leaned heavily towards the belief that the Federal Open Market Committee (FOMC) would maintain its benchmark funds rate following the December 12–13 meeting. The market also projected an 89% chance of a quarter-point or more rate cut by the Fed by May 2024.

Friday’s market gains were spearheaded by banks and financial shares, driven by a decline in Treasury yields. This shift signals increasing investor confidence in a sustained retreat of inflation and the expectation that the Fed will abstain from further rate hikes. The 10-year Treasury note yield fell to approximately 4.21%, marking its lowest level since mid-September.

As nearly all S&P 500 companies reported results for the most recent quarter, there was an average earnings growth of 4.7% compared to the same period a year earlier. This marked the first year-over-year increase since the third quarter of 2022, showcasing a positive trend in corporate performance.

 

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