Good morning,
This past week in the markets was a thrilling ride. Kicking off with a cautious tone on Monday and culminating in tight-range trading by Friday, it was a week characterized by a diverse array of responses to economic indicators, corporate earnings, and geopolitical developments.
The pivotal factors shaping the week’s direction were the market’s reaction to the Consumer Price Index (CPI) data and the anticipation of the Federal Reserve potentially hitting the brakes on interest rate hikes.
Table of Contents
The S&P 500’s Flirtation with 4,500
Mega Cap Stocks and the Broader Market
The Fed’s Rate Hike Pause
Treasury Yields Take a Dip
Sector Performances
Earnings and Other News
CALENDAR & MOVERS
Earnings Highlights
COMMODITIES
ENERGY
GOLD AND PRECIOUS METALS
CRYPTOCURRENCY
THE S&P 500’S FLIRTATION WITH 4,500
The S&P 500, a bit of a show-off, flirted with the 4,100 mark in late October and then, like a high school crush, decided to go all the way, closing above 4,500 on Friday. Talk about playing hard to get! This surge was partially fueled by a mix of low-selling activity post-run and a classic case of FOMO (Fear of Missing Out) during a traditionally bullish season for the market.
MEGA CAP STOCKS AND THE BROADER MARKET
While mega-cap stocks did their bit, the broader market wasn’t just twiddling its thumbs. It saw a more robust buying interest. The market-cap weighted S&P 500 rose 2.2%, and the Invesco S&P 500 Equal Weight ETF (RSP) jumped 3.4%. The Vanguard Mega Cap Growth ETF (MGK) also saw a decent 2.1% gain.
THE FED’S RATE HIKE PAUSE
The bulk of these gains came after the October Consumer Price Index report, which hinted that the Federal Reserve might be putting the brakes on rate hikes. This was music to the ears of investors, as the Fed funds futures market now sees a 61.7% probability of the first rate cut in May 2024.
TREASURY YIELDS TAKE A DIP
In response to this data and the idea that the Fed might be done with rate hikes, Treasury yields took a nosedive. The 2-year note yield fell 15 basis points to 4.90%, and the 10-year note yield declined 19 basis points to 4.44%.
SECTOR PERFORMANCES
In the sector circus, real estate, financials, and utilities were the star performers, while consumer staples and energy were more like the underperforming clowns, gaining less than 1.0%.
Real Estate: Leading the sector gains with a 4.5% increase.
Financials: Not too shabby, with a 3.3% rise.
Utilities: Powered up with a 3.0% gain.
Consumer Staples and Energy: Lagging behind, with modest gains of 0.6% and 0.9%, respectively.
EARNINGS AND OTHER NEWS
Walmart (WMT) and Target (TGT): These retail giants talked about a more cautious consumer but still managed to pull a rabbit out of the hat, with Target registering a significant gain post-earnings.
Chip Equipment Maker Drama: Applied Materials (AMAT) reported earnings but then faced a downturn following a Reuters report about a DOJ criminal probe over shipments to China’s top chipmaker, SMIC.
Congress and Presidential Moves: Congress passed a resolution to avoid a government shutdown. Presidents Biden and Xi agreed to resume high-level talks and cooperate in combating global illicit drug manufacturing and trafficking.
CALENDAR & MOVERS
Tuesday, Existing Home Sales (MoM) (October)
Wednesday, Durable Goods Orders (MoM) (October)
Earnings
The upcoming holiday-shortened week is set to be bustling with a host of earnings reports, peaking just before Thanksgiving. Nvidia (NVDA) takes center stage, riding high on an AI-driven surge. Joining the earnings parade are Lowe’s (LOW), Analog Devices (ADI), Autodesk (ADSK), Best Buy (BBY), Baidu (BIDU), Deere (DE), and DICK’S Sporting Goods (DKS), each ready to reveal their financial health.
On the economic front, the week will be heavily influenced by global flash PMIs for November and the report on durable goods orders. Additionally, interest rate analysts will be keenly awaiting the Federal Reserve’s minutes from the FOMC meeting and insights from the European Central Bank’s latest meeting.
EARNINGS HIGHLIGHTS
Monday, November 20: The spotlight shines on Zoom Video (NASDAQ:ZM) and BellRing Brands (BRBR) as they report their earnings.
Tuesday, November 21: A busy day with Nvidia (NVDA), Lowe’s (LOW), Medtronic (MDT), Analog Devices (ADI), Autodesk (ADSK), Best Buy (BBY), Baidu (BIDU), DICK’S Sporting Goods (DKS), Burlington Stores (BURL), HP (HPQ), Nordstrom (JWN), and Jack in the Box (JACK) all stepping into the earnings spotlight.
Wednesday, November 22: Attention turns to Deere (DE) as they round out the midweek earnings announcements.
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Have a great week!
Irving Wilkinson
Editor
AlphaBetaStock.com
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