While many retired clergy choose to enjoy their well-deserved season of rest, some seek ways to continue nurturing their spiritual calling.
Stocks rose notably in November following three straight months of declines. The Nasdaq led the benchmark indexes listed here, followed by the S&P 500, the Russell 2000, the Dow, and the Global Dow. Overall, indexes enjoyed their best month since late 2022 and the best November in three years. Signs of
waning inflationary pressure powered investor optimism that the Federal Reserve may be done raising
The most recent inflation data showed price growth slowed in October. Both the Consumer Price Index and
the personal consumption expenditures price index showed annual rates of inflation receded (see below).
The Federal Reserve met in November and maintained the federal funds target rate range at its current
5.25%-5.50%. While noting that inflation appears to be slowing, the Fed left future interest rate hikes on the
table should inflation turn less favorable. The Fed next meets in mid-December. It will be interesting to see
whether some of the members hint at a possible interest rate reduction heading into 2024. However, while
inflation has begun to trend lower, it remains above the Fed's target of 2.0% and the economy has shown
resiliency, all of which supports the Fed's apparent cautious approach.
The economy has proven resilient despite an autoworkers strike, the ongoing war in Ukraine, and the
Israel-Hamas conflict. Third-quarter gross domestic product expanded at an annualized rate of 5.2%,
according to the second estimate. Consumer spending, which makes up about 70.0% of the economy,
rose, with increased spending in durable goods, nondurable goods, and services. Gross domestic income
rose 1.5% in the third quarter. Rising income should help expand the economy moving into the fourth
Job growth slowed in October, with only 150,000 new jobs added. Wages continued to rise, increasing
4.1% over the last 12 months. Along with declining job growth, unemployment claims increased from a year
ago (see below), reaching their highest level since late 2021.
The third quarter saw U.S. companies enjoy their biggest year-over-year gain in earnings since the second
quarter of 2022. With almost all of the S&P 500 companies reporting, overall earnings are estimated to be
more than 6.0% above earnings totals from a year ago. More than 80.0% of quarterly reports exceeded
analysts' earnings expectations. In addition, third-quarter corporate profits in the U.S. surpassed the
previous quarter by 4.1%, according to Trading Economics.
Sales of both new and existing homes retreated in October, primarily due to lack of inventory, high prices,
and advancing mortgage rates. Sales of existing homes are down nearly 14.5% over the past 12 months,
although sales of new single-family homes have increased nearly 18.0%.
Industrial production contracted in October following two months of gains. (see below). Conversely,
manufacturing expanded in October, according to the latest survey from the S&P Global US Manufacturing
Purchasing Managers' Index™, driven by an increase in new orders. The services sector also saw business
accelerate in October.
Ten of the 11 market sectors ended November higher, with the exception of energy, which fell about 1.7%.
Last month saw real estate, information technology, financials, communication services, and consumer
discretionary climb by more than 11.0%.
Bond prices advanced in November, with the 10-year Treasury bond enjoying its best month since 2011.
|AS OF 11/30
Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.
Eye on the Month Ahead
Investors will focus on corporate earnings and the labor market in August. The Federal Open Market Committee does not meet in August, so there will be no change to the Federal Funds target rate. Manufacturing, which has slowed during the summer months, looks to pick up steam in August.
Data sources: Economic: Based on data from U.S. Bureau of Labor Statistics (unemployment, inflation); U.S. Department of Commerce (GDP, corporate profits, retail sales, housing); S&P/Case-Shiller 20-City Composite Index (home prices); Institute for Supply Management (manufacturing/services). Performance: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI, Cushing, OK); http://www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.
The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 largest, publicly traded companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. The U.S. Dollar Index is a geometrically weighted index of the value of the U.S. dollar relative to six foreign currencies. Market indices listed are unmanaged and are not available for direct investment.
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