Weekly review

The market experienced a bustling week characterized by substantial gains across major indices. The Dow Jones Industrial Average achieved a new record high on Thursday, extending its momentum into Friday's session. Simultaneously, the S&P 500 closed above 4,700, marking its highest level since January 2022. This marked the seventh consecutive winning week for the major indices. The surge in stocks followed the revelation that the Federal Open Market Committee (FOMC) unanimously decided to maintain the target range for the fed funds rate at 5.25-5.50%. Accompanying this decision was an updated Summary of Economic Projections, revealing an improved growth outlook for 2023, a lowered inflation outlook for 2023 and 2024, and a median estimate of three rate cuts in 2024, up from the previous estimate of two. During his press conference, Fed Chair Powell acknowledged discussions within the FOMC regarding when it would be appropriate to start easing policy restraint. However, New York Fed President Williams, a FOMC voter, contradicted Powell's remarks in a CNBC interview, stating that the Fed is not currently discussing rate cuts, deeming it premature to consider the timing. Atlanta Fed President Bostic, a 2024 FOMC voter, anticipated two rate cuts in 2024, starting in the second half of the year. The fed funds futures market initially priced in two rate cuts for 2024 but adjusted to six cuts, with the first expected in March. In response to the Fed's dovish stance, other central banks, including the ECB, Bank of England, Swiss National Bank, and Hong Kong Monetary Authority, maintained their respective rates. Notably, ECB President Lagarde and officials from other banks signaled a divergence from rate cuts after Powell's disclosure about FOMC discussions. The Treasury market saw a robust rally following the Fed's dovish pivot, with the 2-year note yield dropping 28 basis points to 4.46% and the 10-year note yield plunging 30 basis points to 3.93%. Equities received additional support as the 10-year note yield fell below 4.00%. Various sectors benefited from the positive market conditions, with the Invesco S&P 500 Equal Weight ETF (RSP) surging 3.9%. The S&P 500 gained 2.5% for the week, with only the communication services sector registering a loss (-0.1%). The real estate sector, sensitive to interest rates, jumped 5.3%, while top-performing sectors included materials (+4.0%), consumer discretionary (+3.5%), and industrials (+3.6%). Economic data aligned with the narrative of a soft landing, as the November Consumer Price Index met expectations, and the Producer Price Index indicated welcome disinflation. Retail sales rebounded in November, and weekly jobless claims remained below recession levels. The latter part of the week saw increased trading volume at the NYSE and Nasdaq, attributed in part to a significant quarterly options and futures expiration on Friday, along with a rebalance of the S&P 500 and Nasdaq 100.

On Monday, the major indices exhibited mixed trading patterns during the early session. The relatively lackluster price movements were attributed, in part, to ongoing consolidation efforts and a cautious "wait-and-see" approach among investors anticipating a busy week. Key events on the horizon included the release of the November Consumer Price Index on Tuesday, the Federal Open Market Committee (FOMC) meeting on Wednesday, and the November Retail Sales Report on Thursday. Additionally, the European Central Bank (ECB) and the Bank of England had scheduled policy meetings on Thursday. Market participants adopted a hesitant stance ahead of two Treasury note sales, a $50 billion 3-year note auction, and a $37 billion 10-year note auction, both of which experienced weak demand. Despite lackluster results, Treasuries rebounded from their intraday high yields, coinciding with increased buying activity in the stock market. Around 1:00 p.m. ET, the major indices began a steady climb, concluding the day near their highest levels. Notably, there was no notable U.S. economic data released on Monday.

On Tuesday, the major indices closed the session near their daily highs, with the S&P 500 and Dow Jones Industrial Average each gaining 0.5%, while the Nasdaq Composite recorded a 0.7% increase. The trading day commenced with relatively subdued price movements as investors initially responded to the November Consumer Price Index (CPI). While the report generally aligned with expectations, market participants briefly fixated on the persistent nature of core CPI. The mega-cap sector's relative strength provided some support to overall index performance, and a broad range of stocks contributed to Tuesday's gains. Ongoing buying activity during this seasonally robust market period was bolstered by early resilience to selling efforts and a fear of missing out on potential further gains. Despite some initial volatility in response to the CPI data, the Treasury market experienced relative calm. Notably, Oracle (ORCL) stood out as a notable loser following its mixed fiscal Q2 earnings report and in-line fiscal Q3 guidance. The economic data for Tuesday included a November NFIB Small Business Optimism index of 90.6 (versus the prior 90.7), and the November CPI showed a 0.1% increase (in line with the consensus, with the November Core CPI posting a 0.3% rise (matching the consensus of 0.3%). The report underscored the "sticky" nature of core CPI, particularly due to the resilience of the shelter index (+0.4%). This aspect is expected to give the Federal Reserve reason for caution in considering rate cuts in the near term, and it may prompt the Fed to maintain its stance of possible rate hikes if progress in combating inflation falters.

On Wednesday, the stock market experienced a robust rally, with the Dow Jones Industrial Average surging over 500 points to achieve a new record high, while the S&P 500 closed above 4,700, marking its highest level since January 2022. Despite some encouraging disinflation observed in the November Producer Price Index, stocks initially traded cautiously as investors awaited the Federal Open Market Committee's (FOMC) latest policy decision. Market participants displayed limited conviction until it was revealed that the committee unanimously voted to maintain the target range for the fed funds rate at 5.25-5.50%. Following this announcement, buying activity intensified, leading to strong responses in both stocks and bonds. This reaction suggested that market participants believe the Fed is now more aligned with the optimistic rate-cut expectations prevailing in the market. Additionally, rate cut expectations were adjusted in response to the Fed's latest decisions. The broad-based rally included the outperformance of small-cap stocks. Wednesday's economic data encompassed a Weekly MBA Mortgage Applications Index increase of 7.4% (compared to the prior 2.8%), November Producer Price Index at 0.0% (matching the consensus of 0.1%) with a prior revision to -0.4% from -0.5%, and November Core Producer Price Index at 0.0% (compared to the consensus of 0.2%), emphasizing the continued disinflationary perspective, particularly evident in the unchanged index for processed goods for intermediate demand and the 1.4% decline in the index for unprocessed goods for intermediate demand in November.

On Thursday, the stock market continued its positive momentum following Wednesday's rally. The Russell 2000 surged by 2.7%, while the Nasdaq Composite (0.2%), S&P 500 (0.3%), and Dow Jones Industrial Average (0.4%) posted more modest gains, influenced by the relative weakness in mega-cap constituents. Despite an air pocket in the early afternoon that briefly brought the three major indices below Wednesday's closing levels, with no specific catalyst identified, stocks eventually rebounded, reaffirming the overall positive bias. This trend was seen as an extension of Wednesday's post-FOMC surge, with buyers responding favorably to a perceived more dovish policy/tone from the Federal Open Market Committee (FOMC) and Fed Chair Powell. Following the Fed's lead, other central banks opted to keep their respective rates unchanged. The Treasury market also sustained its rally on Thursday. In terms of economic data, the Weekly Initial Claims came in at 202K, surpassing the consensus of 222K, while Weekly Continuing Claims totaled 1.876 million. The level of initial jobless claims, considered a leading indicator, remains far from recessionary levels. November Retail Sales showed a 0.3% increase, beating the consensus of -0.1%, and November Retail Sales excluding auto posted a 0.2% gain, surpassing the consensus of 0.0%. These figures support a soft landing outlook, with the rebound in sales reflecting consumers' ongoing willingness to spend on goods. Additionally, November Export Prices declined by 0.9%, November Export Prices excluding agriculture dropped by 1.0%, November Import Prices decreased by 0.4%, and November Import Prices excluding oil rose by 0.2%. Finally, October Business Inventories showed a marginal decline of 0.1%, differing from the consensus of a 0.1% increase.

On Friday, the stock market concluded the week on a somewhat mixed note, with the Nasdaq Composite rising by 0.4%, and the Dow Jones Industrial Average gaining 0.2%. However, the S&P 500 closed nearly unchanged from Thursday, while the Russell 2000 experienced a decline of 0.8%. A brief spike in afternoon trade was likely linked to the significant quarterly options and futures expiration on Friday, resulting in elevated volume at the NYSE and Nasdaq. Increased activity was also associated with a rebalance of the S&P 500 and Nasdaq 100. Mega-cap stocks, growth stocks, and semiconductor stocks exhibited relative strength, contrasting with the broader market's downward trend. Selling efforts were driven in part by a prevailing sense that stocks are overbought in the short term, although the selling remained modest considering the substantial gains of recent weeks. The S&P 500 closed 14.6% higher than its late October low. The negative bias was also influenced by New York Fed President Williams, a Federal Open Market Committee (FOMC) voter, seemingly contradicting Fed Chair Powell's remarks earlier in the week in a CNBC interview. In response to the commentary from Fed President Williams, Treasuries experienced volatility, but the market eventually stabilized as the session progressed. Turning to Friday's economic data, the December Empire State Manufacturing came in at -14.5 (compared to the consensus of 3.0), indicating a contraction. November Industrial Production showed a 0.2% increase, in line with the consensus, with the prior figure revised to -0.9% from -0.6%. November Capacity Utilization was 78.8%, slightly below the consensus of 79.1%. The report highlighted that industrial production benefited from the end of the UAW strike, boosting manufacturing output. Excluding motor vehicles and parts, the manufacturing index decreased by 0.2%. Additionally, the December S&P Global US Manufacturing PMI - Preliminary figure was 48.2 (versus the prior 49.4), indicating contraction, while the December S&P Global US Services PMI - Preliminary figure was 51.3 (compared to the prior 50.8), suggesting expansion in the services sector.

The week's market performance saw the TSX closing at 20,519, reflecting a 0.9% increase and contributing to a year-to-date (YTD) gain of 5.8%. The Dow Jones Industrial Average closed at 37,305, marking a 2.9% weekly increase and a YTD gain of 12.5%. Similarly, the S&P 500 Index concluded the week at 4,719, with a 2.5% weekly rise and a substantial YTD gain of 22.9%. The NASDAQ exhibited a 2.8% weekly increase, closing at 14,814, and recording an impressive YTD gain of 41.5%. The MSCI EAFE* closed at 2,197, experiencing a 2.8% weekly gain and contributing to a YTD increase of 13.0%. The 10-year Treasury Yield settled at 3.91%, reflecting a modest 0.3% decline for the week but maintaining a flat YTD change of 0.0%. Meanwhile, the 10-year GoC Yield closed at 3.12%, showing a 0.3% weekly decrease and a YTD decline of -0.2%. Oil prices were observed at $71.66 per barrel, indicating a 0.6% increase for the week but reflecting a YTD decrease of -10.7%. Bonds closed at $98.73, with a notable 1.9% weekly gain and a YTD increase of 5.2%. Canada Investment Grade Bonds* experienced a 1.7% weekly gain, contributing to a YTD increase of 6.1%. The Canadian/USD Exchange rate closed the week at $0.75, reflecting a 1.6% weekly increase and a YTD change of 1.3%.

Previous update:

The major indices concluded the week with modest gains, lacking strong commitment from buyers or sellers amid growing concerns that the market is currently overbought in the short term. The S&P 500 closed on Friday at 4,604, representing an 11.8% increase from its October 27 low of 4,117 and establishing a new 52-week high for the index. Notably, mega-cap stocks exhibited relative strength, enabling the S&P 500 to secure a 0.2% gain, while the Invesco S&P 500 Equal Weight ETF (RSP) remained nearly unchanged from the previous Friday. The Vanguard Mega Cap Growth ETF (MGK) posted a 0.9% gain, with Alphabet (GOOG) standing out as a winner, surging 2.5% for the week and over 5.0% during Thursday's session following the introduction of its Gemini AI model. This boost propelled the communication services sector to a 1.4% gain, while the consumer discretionary sector also performed well, rising by 1.1%. However, the energy sector experienced the most significant decline, falling by 3.3%, paralleling a 3.5% drop in oil prices to $71.18 per barrel. The materials (-1.7%) and consumer staples (-1.3%) sectors also recorded noticeable downturns.

Throughout the week, market participants navigated through various crosscurrents. Renewed concerns about global growth surfaced following Moody's downgrade of China's credit outlook to Negative from Stable, linked in part to worries about structurally weaker growth prospects. Additionally, the October JOLTS - Job Openings Report revealed the lowest number of job openings (8.733 million) since March 2021. Despite these concerns, some economic data aligned with the narrative of a soft landing for the economy, offering positive news for earnings but potentially dampening expectations for rate cuts. The ISM Non-Manufacturing Index for November increased to 52.7% from 51.8%, while weekly jobless claims remained consistent with a robust labor market. The November Employment Situation report was generally solid, and the preliminary University of Michigan Index of Consumer Sentiment for December surpassed expectations.

The fed funds futures market no longer predicts a rate cut in March after this week's data, but it still indicates a significant likelihood of a cut in May (78.5% on Friday), according to the CME FedWatch Tool. Treasuries closed the week with losses, driven primarily by the jobs report released on Friday. The 2-year note yield surged by 18 basis points to 4.74%, and the 10-year note yield increased by two basis points to 4.25%, putting renewed pressure on the 2s10s spread, which tightened by 16 bps to -49 bps. In other financial developments, cryptocurrencies experienced significant upward movements during the week, with Bitcoin reaching $44,241.

On Monday, the major indices experienced mixed price movements initially, but later adhered to relatively narrow trading ranges for the majority of the session. The performance of mega-cap stocks and semiconductor shares had a notable impact on the indices, with NVIDIA (NVDA) particularly influential. The Vanguard Mega Cap Growth ETF (MGK) and the PHLX Semiconductor Index both recorded declines of 1.1% and 1.2%, respectively. The S&P 500, weighed down by market-cap considerations, concluded with a 0.5% loss, while the equal-weighted S&P 500 managed a slight 0.1% gain. In contrast, there was a rotation of funds into other sectors, providing some support to the broader market. Airlines, particularly boosted by Alaska Air's (ALK) plan to acquire Hawaiian Holdings (HA) for $18.00 per share, stood out as winners. The US Global Jets ETF (JETS) surged 4.2%. Additionally, on Monday, strength was observed in banks, retailers, and homebuilders, with the SPDR S&P Bank ETF (KBE) rising 1.2%, the SPDR S&P Retailer ETF (XRT) increasing by 1.1%, and the SPDR S&P Homebuilder ETF (XHB) climbing 0.7%.

On Tuesday, trading exhibited a negative bias, with a 7-to-3 margin favoring decliners in the A-D line at the NYSE, and the equal-weighted S&P 500 closing down by 0.9%. Mega-cap stocks, benefiting from safe-haven buying, provided support to the major indices. Investors turned to mega caps amid renewed concerns about global growth, contributing to lower Treasury yields on Tuesday. Moody's downgrade of China's credit outlook to Negative from Stable, tied to worries about structurally weaker growth prospects, and the October JOLTS - Job Openings Report showing the lowest number of job openings (8.733 million) since March 2021 fueled concerns about an economic slowdown. These factors overshadowed a slight increase in the ISM Non-Manufacturing Index for November to 52.7% from 51.8%. Except for mega caps, most sectors participated in Tuesday's retreat. In terms of economic data on Tuesday, the November S&P Global US Services PMI - Final was 50.8, up from the prior 50.6, indicating a pickup in activity in the largest sector of the U.S. economy. The November ISM Non-Manufacturing PMI reached 52.7%, surpassing the consensus of 52.4%, supporting the view of a soft landing. The October JOLTS - Job Openings reported 8.773 million, with the prior figure revised to 9.350 million from 9.553 million, showcasing the lowest job openings since March 2021.

On Wednesday, the trading session commenced with a predominantly positive tone. Despite relative weakness in the mega-cap space, which constrained index performance, there was more robust buying activity beneath the surface during the early part of the session. The market-cap-weighted S&P 500 reached a 0.5% gain at its peak but ultimately closed with a 0.4% loss. In contrast, the Invesco S&P 500 Equal Weight ETF (RSP) achieved a 0.9% increase at its highest point but concluded the session nearly unchanged from Tuesday. The afternoon trade saw many stocks experiencing a reversal with no specific catalyst explaining the price action. Nevertheless, the market held up reasonably well, considering the rapid climb in stock prices over a relatively short period. Early in the session, advancers held a better-than-3-to-1 lead over decliners at the NYSE, but by the close, decliners had a narrow 11-to-10 lead over advancers. The initial upward moves were driven by a tendency to buy on weakness following Tuesday's losses, supported by another drop in the 10-year yield in response to Wednesday morning's economic data. Wednesday's economic data included the Weekly MBA Mortgage Applications Index, which increased by 2.8%, and the November ADP Employment Change, reported at 103K, below the consensus of 127K. The Q3 Productivity, revised to 5.2% against the consensus of 4.8%, and Q3 Unit Labor Costs, revised to -1.2% compared to the consensus of -0.8%, indicated a favorable connection between rising productivity and falling unit labor costs. Furthermore, the October Trade Balance was reported at -$64.3 billion, slightly beating the consensus of -$64.4 billion, with noteworthy differences in the paths taken by exports and imports, aligning with a narrative emphasizing weaker global activity compared to the U.S.

On Thursday, stocks rebounded following Wednesday's modest declines, with major indices closing near their best levels of the day, recording gains ranging from 0.2% to 1.4%. The S&P 500 approached the 4,600 level, reaching 4,590 at Thursday's high. Mega-cap stocks, including Alphabet (GOOG), Apple (AAPL), and Amazon (AMZN), exerted a considerable influence on index gains. Alphabet, in particular, soared more than 5% after introducing its Gemini AI model. Semiconductor stocks outperformed the broader market, with the PHLX Semiconductor Index climbing 2.8%. The equal-weighted S&P 500 closed with a 0.5% gain, reflecting relatively modest buying activity in the broader market. Advancers led decliners at the NYSE by 2-to-1 and at the Nasdaq by 3-to-2. The positive bias on Thursday was fueled by pleasing economic data aligning with the soft landing narrative. Weekly initial jobless claims remained little changed at 220,000, and continuing jobless claims decreased by 64,000 to 1.861 million. Thursday's economic data included initial jobless claims for the week ending December 2, increasing by 1,000 to 220,000, and continuing jobless claims for the week ending November 25 decreasing by 64,000 to 1.861 million. These figures, while not producing major shockwaves in the labor market, fit the narrative of a slightly loosening labor market without unraveling amid a stream of layoff announcements. Additionally, the October Wholesale Inventories came in at -0.4% versus the consensus of -0.2%, with the key takeaway emphasizing different paths taken by exports and imports, aligning with a narrative of weaker global activity compared to the U.S. Lastly, the EIA Natural Gas Inventories showed a draw of 117 bcf versus a build of 10 bcf last week, and consumer credit increased by $5.2 billion in October, falling short of the consensus of $9.0 billion, showcasing tighter lending standards and reduced borrowing demand in the face of higher interest rates.

On Friday, the major indices concluded the session near their daily highs, with the S&P 500 closing above 4,600 for the first time since March 2022, recording a gain of 0.4%. The Dow Jones Industrial Average, Nasdaq Composite, and Russell 2000 also posted gains of 0.4%, 0.5%, and 0.7%, respectively. Despite mixed early price action, the market exhibited a subdued reaction to the morning's economic data, reflecting a sense that the market is poised for consolidation. The possibility of robust data not influencing the Fed toward a rate-cut mindset tempered buyer enthusiasm. The fed funds futures market no longer anticipates a rate cut in March but still perceives a strong likelihood of a cut in May (78.5% compared to 89.0% on Thursday), according to the CME FedWatch Tool. The 2-year note yield increased by 17 basis points on the day and 18 basis points for the week, reaching 4.74%. The 10-year note yield rose by 12 basis points on the day and two basis points for the week, reaching 4.25%. Reviewing Friday's economic data, nonfarm payrolls for November increased by 199,000, surpassing the consensus of 175,000 and following a 150,000 increase in October. Nonfarm private payrolls rose by 150,000 in November, slightly below the consensus of 155,000, after a revised increase of 85,000 in October. Average hourly earnings for November increased by 0.4%, exceeding the consensus of 0.2%, following a 0.2% increase in October. The average workweek rose to 34.4 hours in November, slightly above the consensus of 34.3, from 34.3 hours in October. The unemployment rate decreased to 3.7% in November, beating the consensus of 3.9%, down from 3.9% in October. The key takeaway from the report is the recognition that the unemployment rate dropped as the participation rate increased, indicating solid hiring activity in November. The number of employed civilians increased by 747,000, while the number of unemployed civilians decreased by 215,000. Additionally, the preliminary reading for the University of Michigan Consumer Sentiment Index for December came in at 69.4, surpassing the consensus of 62.6 and exceeding the final reading of 61.3 in November. A year ago, the index stood at 59.8. Prior to this report, consumer sentiment had declined for four consecutive months. The key takeaway from the report is the link between the increase in sentiment and the decrease in inflation expectations, setting the tone for improved attitudes across various demographics and identification factors, including age, income, education, geography, and political affiliation.

The Toronto Stock Exchange (TSX) concluded the week at 20,333 points, experiencing a slight decline of 0.6%, while showcasing a 4.9% gain year-to-date. In the U.S., the Dow Jones Industrial Average remained unchanged, closing at 36,248 points, with a year-to-date increase of 9.4%. The S&P 500 Index posted a modest 0.2% gain for the week, closing at 4,604 points, and achieving a substantial year-to-date growth of 19.9%. Similarly, the NASDAQ exhibited a 0.7% increase, ending the week at 14,404 points, and boasting an impressive 37.6% gain year-to-date. The MSCI EAFE* index recorded a 0.4% gain, closing at 2,138 points, with a year-to-date growth of 10.0%. The 10-year Treasury Yield remained steady at 4.23%, showing no change for the week and a 0.3% uptick year-to-date. In the Canadian market, the 10-year GoC Yield experienced a marginal decrease of 0.1%, settling at 3.37%, with a minimal 0.1% increase year-to-date. Oil prices declined by 3.9%, closing the week at $71.20 per barrel and indicating an 11.3% decrease year-to-date. Bond prices settled at $96.93, reflecting a slight 0.1% increase for the week and a 3.3% gain year-to-date. Canada Investment Grade Bonds* showed a solid 0.8% increase for the week, contributing to a 4.7% gain year-to-date. The Canadian/USD Exchange rate experienced a 0.5% decrease, closing the week at $0.74, with a marginal year-to-date decline of 0.3%.

Previous update:

The stock market concluded November with robust gains, carrying the positive momentum into December. The S&P 500 reached a new 52-week high at the close on Friday, nearly touching the 4,600 level during the day. Notably, mega-cap stocks showed relatively muted performance this week, with the Vanguard Mega Cap Growth ETF (MGK) recording a modest 0.1% gain compared to the S&P 500's 0.8% rise. In contrast, the equal-weighted S&P 500 surged by 2.5%. Among the S&P 500 sectors, only communication services (-2.5%) and energy (-0.1%) experienced declines, while the real estate sector (+4.6%) led the gains, followed by materials (+2.6%), industrials (+2.1%), and financials (+2.1%).

The positive market action this week may be attributed to a combination of the fear of missing out on further gains in the seasonally strong period and key factors such as interest rates and reconsideration of rate cuts in H1 2024. The 2-year note yield, particularly sensitive to changes in the fed funds rate, saw a significant 39 basis points decline to 4.56% this week, while the 10-year note yield dropped 24 basis points to 4.23%. The CME FedWatch Tool indicates an increased probability of a rate cut in May (89.0%), compared to the previous week's 47.8%.

Despite some Fed officials pushing back on the idea of rate cuts in H1 2024, including Richmond Fed President Barkin, Fed Governor Bowman, and Fed Chair Powell, investors remain optimistic. Economic data releases this week align with a soft landing scenario, featuring a robust November Consumer Confidence Index, an upward revision of Q3 real GDP to 5.2%, moderation in income and spending, disinflation in the PCE Price Indexes in October, a strong Chicago PMI for November, and relatively low initial jobless claims.

Earnings reports were also a focus, with positive responses to better-than-expected results from software enterprise companies like Snowflake (SNOW) and Elastic (ESTC), as well as Dow component Salesforce (CRM). Additionally, news of additional voluntary cuts by OPEC+ countries, reducing total output by 2.2 million barrels per day from January 1 to March 2024, impacted WTI crude oil futures, leading to a 1.5% decline this week, closing at $74.07/bbl.

On Monday, the stock market displayed limited activity, particularly in the absence of significant movements until the last hour of trading. The major indices showed a mixed disposition, with neither buyers nor sellers demonstrating strong conviction. The Invesco S&P 500 Equal-Weight ETF (RSP) experienced a 0.2% decline. The Nasdaq Composite exhibited a slight performance advantage, receiving additional support from select mega-cap names, which contributed to maintaining the S&P 500 at a relatively steady position compared to Friday's closing level. Notably, the S&P 500 traded within a narrow 14-point range between its high and low throughout the day, reflecting cautious market dynamics. This deliberate move was evident in the modest changes observed in the S&P 500 sectors. Treasury yields took a downward turn at the start of the week, influenced by a weaker-than-expected October New Home Sales Report and a $55 billion 5-year note auction that surpassed some soft demand seen in the $54 billion 2-year note auction. Monday's economic data revealed a 5.6% month-over-month decrease in new home sales for October, reaching a seasonally adjusted annual rate of 679,000 units. Despite a significant drop in median and average selling prices, new home sales were up 17.7% year-over-year. The report indicated a notable slump in new home sales activity in October, driven by affordability pressures arising from high mortgage rates and generally elevated prices.

Moving to Tuesday, the major indices closed the session with minimal changes from the session's outset, signaling a relative stability considering the market's upward trajectory since late October. This lack of significant change represented a positive outcome for the bulls and a potential disappointment for those anticipating a more substantial pullback. Fed Governor Waller's acknowledgment that the policy rate could be lowered if inflation continues to decline provided support to the market, leading indices to their best levels of the day. However, this buying interest waned later in the day, revealing signs of buyer exhaustion after the substantial run from late October lows. Fed Governor Bowman, also an FOMC voter, offered a counterpoint to the rate-cut excitement by expressing willingness to support raising rates if data show progress on inflation has stalled or is insufficient to bring inflation back down to 2 percent. Despite her perspective, the fed funds futures market appeared to place more emphasis on Mr. Waller's remarks.

The 2-year note yield, sensitive to changes in the fed funds rate, showed a similar reaction, largely ignoring a $39 billion 7-year note auction characterized by weak demand. The drop in rates served as a supportive influence for stocks, which lacked clear leadership. Tuesday's economic data included the Conference Board's Consumer Confidence Index for November, which checked in at 102.0, surpassing the consensus estimate of 100.0. Although advertised as an uptick in confidence, the report carried a disclaimer, as the increase stemmed from a downwardly revised number for the prior month. The key takeaway highlighted improvements in confidence regarding future business conditions, job availability, and incomes for the next six months, aligning with the market's prevailing soft landing outlook. Additionally, the September FHFA Housing Price Index and the September S&P Case-Shiller Home Price Index reported positive month-over-month increases, contributing to the broader economic landscape.

On Wednesday, both the S&P 500 and Nasdaq Composite closed near their daily lows, recording marginal declines primarily influenced by relative weakness in the mega-cap space. In contrast, the Dow Jones Industrial Average saw a slight gain of 0.04%, while the Russell 2000 and S&P Mid Cap 400 posted increases of 0.6% and 0.4%, respectively. Although an underlying positive bias persisted throughout the session, buyer enthusiasm diminished as the day progressed. The equal-weighted S&P 500, reflecting a broader market view, achieved a 0.4% gain, reaching as much as 1.1% at its peak. The drop in Treasury yields provided support for stocks during this seasonally robust market period. This movement was partly driven by positive inflation data from Germany, Spain, and Australia, coupled with speculation that the Fed might consider rate cuts in the first half of 2024. Other contributing factors to the positive market sentiment included an upward revision of Q3 real GDP to 5.2% from 4.9%, General Motors (GM) announcing a $10 billion share buyback program and a 33% dividend increase, and favorable responses to earnings results from CrowdStrike (CRWD), NetApp (NTAP), Intuit (INTU), Workday (WDAY), and Foot Locker (FL). Wednesday's economic data included the Weekly MBA Mortgage Applications Index, revealing a 0.3% increase, and the Q3 GDP - Second Estimate, which was revised upward to 5.2% from 4.9%. The latter indicated a robust U.S. economy in the third quarter despite higher interest rates, driven by a strong labor market and disinflation supporting healthy consumer spending. Additionally, October Advanced International Trade in Goods, Advanced Retail Inventories, and Advanced Wholesale Inventories were reported.

Moving to Thursday, the Dow Jones Industrial Average stood out as a relative outperformer, recording a 1.5% climb. This was attributed, in part, to a substantial gain in Salesforce (CRM) following impressive earnings results and outlook on Wednesday. In contrast, the S&P 500 and Nasdaq Composite spent most of the session in negative territory due to lagging mega-cap constituents. The Vanguard Mega Cap Growth ETF (MGK) closed with a 0.1% loss, while the Nasdaq Composite fell 0.2%. In the last half hour of trading, an increase in buying activity left the S&P 500 near its daily high with a 0.4% gain. The broader market's outperformance followed economic data showcasing a moderation in income and spending, disinflation in the PCE Price Indexes in October, a much stronger-than-expected Chicago PMI for November, and a relatively low level of initial jobless claims. Treasury yields experienced a backup in response to this data, tempering some buyer enthusiasm in the stock market. Thursday's economic data included October Personal Income, October Personal Spending, October PCE Prices, and October PCE Price - Core. The key takeaway from the report highlighted disinflation in the PCE Price Indexes, a positive development, while the core PCE increase remained above the Fed's 2.0% target. Weekly Initial Claims and Weekly Continuing Claims were also reported, indicating relatively subdued layoff activity but a challenging job market environment. Furthermore, November Chicago PMI and October Pending Home Sales data were released, contributing to the overall economic landscape.

On Friday, the S&P 500 achieved its highest level since March 2022, falling just short of crossing the 4,600 mark at its peak, closing slightly below that level. The Nasdaq Composite and Dow Jones Industrial Average posted gains of 0.6% and 0.8%, respectively, while the Russell 2000 saw a substantial jump of 3.0%. Despite a lackluster start with the three major indices trading near Thursday's closing levels, buying activity gained momentum simultaneously in the stock market and Treasury market. The 2-year note yield experienced a 14 basis points drop to 4.56%, and the 10-year note yield settled 13 basis points lower at 4.23%, largely in response to the morning's economic releases. Notably, the S&P Global U.S. Manufacturing PMI remained unchanged from the flash November reading, the ISM Manufacturing Index indicated contracting activity at a steady pace similar to October, and the Construction Spending report for October exceeded expectations. Market participants also reacted to Fed Chair Powell's Friday speech, which, lacking any surprises, contributed to an overall positive sentiment. The fear of missing out on additional gains during this seasonally robust market period played a role in the upside ride. Reviewing Friday's economic data, the November S&P Global US Manufacturing PMI finalized at 49.4, matching the prior figure. The November ISM Manufacturing Index came in at 46.7%, slightly below the consensus of 47.5%, with little overall change in the strength of the manufacturing sector. The Production Index fell into contraction at 48.5% after showing slight expansion in October. October Construction Spending surpassed expectations at 0.6%, compared to the consensus of 0.3%, indicating continued growth in construction spending, particularly with a robust 71.2% year-over-year increase in manufacturing spending. This positive economic development aligns with analysts' concerns about potential sudden economic weakness.

The Dow Jones Industrial Average closed at 36,246, marking a weekly gain of 2.4% and a year-to-date increase of 9.3%. The S&P 500 Index concluded the week at 4,595, recording a 0.8% weekly rise and showing a substantial year-to-date growth of 19.7%. Similarly, the NASDAQ saw a 0.4% weekly uptick, bringing the year-to-date performance to an impressive 36.7%. The TSX closed at 20,449, experiencing a notable 1.7% weekly increase and holding a 5.5% gain year-to-date. The MSCI EAFE exhibited a marginal 0.1% weekly change, contributing to a 9.3% year-to-date growth. In the bond market, the 10-year Treasury Yield settled at 4.21%, reflecting a minor 0.3% weekly decline but maintaining a positive 0.3% year-to-date change. The 10-year GoC Yield mirrored these movements, closing at 3.43% with a weekly decrease of 0.3% and a modest year-to-date increase of 0.1%. Oil prices experienced a 1.7% weekly dip, closing at $74.24 per barrel, while displaying a year-to-date decline of 7.5%. Bonds, on the other hand, demonstrated a 1.7% weekly rise, closing at $96.80, and contributing to a 1.9% year-to-date increase. Canada Investment Grade Bonds showed a 1.2% weekly increase and a 3.0% year-to-date growth. The Canadian/USD Exchange rate closed the week at $0.74, registering a 0.6% weekly uptick and a minimal 0.2% year-to-date change.

Previous update:

This week saw a reduced number of trading days due to the Thanksgiving Day holiday on Thursday, resulting in lighter trading volume. However, this did not deter the market's overall positive trend. Major indices experienced another winning week, supported by widespread buying interest. Mega-cap stocks, particularly exemplified by the Vanguard Mega-Cap Growth ETF (MGK) and the Invesco S&P 500 Equal-Weight ETF (RSP), played a leading role in this success.

All S&P 500 sectors recorded gains, with health care, consumer staples, and communication services sectors performing the best, while energy, utilities, and information technology sectors were relative laggards. NVIDIA (NVDA) drew attention as a key story stock, reporting strong quarterly results but sparking discussions about potential impacts of export curbs to China on future sales. The market, however, displayed resilience, with NVIDIA's softer finish not significantly affecting broader market sentiment.

Earnings results in the retail sector, including Dick's Sporting Goods, Nordstrom, Best Buy, Kohl's, Lowe's, Burlington Stores, and American Eagle Outfitters, contributed to positive overall market sentiment. Economic data presented a mixed picture, with October existing home sales at the slowest pace since August 2010, while initial jobless claims for the week ending November 18 surprisingly decreased to 209,000.

In the bond market, the 2-year note yield increased by five basis points to 4.95%, and the 10-year note yield increased by three basis points to 4.47%. Looking ahead, the upcoming week is expected to feature important economic data, including October New Home Sales, November Consumer Confidence, the second estimate for Q3 GDP, October Personal Income and Spending, Initial Jobless Claims, and the November ISM Manufacturing Index. Additionally, high-profile earnings reports are anticipated from companies such as Zscaler, CrowdStrike, Hewlett Packard Enterprise, Intuit, NetApp, Workday, Dollar Tree, Foot Locker, Five Below, Okta, PVH, Salesforce, and Snowflake.

On Monday, the major indices closed near session highs, registering gains ranging from 0.5% to 1.1%. The day's market movement was driven by mega-cap stocks, a surge in enthusiasm for artificial intelligence (AI), a positive response to a $16 billion 20-year bond auction, and sustained buying activity in a seasonally robust period. Notably, Microsoft (MSFT) experienced a 2.1% increase, buoyed by news of hiring OpenAI's former CEO Sam Altman to lead its AI team, while AI chip leader NVIDIA (NVDA) gained 2.3% ahead of its earnings report scheduled for Tuesday's close. Other semiconductor stocks joined the rally, forming a significant leadership group. The Vanguard Mega Cap Growth ETF (MGK) and the PHLX Semiconductor Index posted gains of 1.2% and 1.5%, respectively. In contrast, the Invesco S&P 500 Equal Weight ETF (RSP) saw a modest 0.4% gain, while the market-cap weighted S&P 500 rose by 0.7%. Trading volume was slightly lighter than average at the beginning of the holiday week, as the stock market is set to close on Thursday for Thanksgiving and will have an early closure at 1:00 p.m. ET on Friday. Two S&P 500 sectors closed with slight declines, while nine sectors finished higher. The information technology (+1.5%) and communication services (+1.1%) sectors led the gains, driven by strength in their respective mega-cap constituents. However, the utilities sector experienced the most significant decline, dropping by 0.3%. Despite continued rebound action in WTI crude oil futures, the energy sector was a relative underperformer, gaining only 0.1% for the day. Treasuries recorded gains following the $16 billion 20-year bond auction, with the 2-year yield remaining unchanged at 4.90%, and the 10-year note yield falling by two basis points to 4.42% after sitting at 4.47% just ahead of the auction results. In separate news, Kohl's (KSS) and Best Buy (BBY) trailed the day's market action ahead of their quarterly results scheduled for release before Tuesday's opening. The economic data for the day showed October Leading Indicators at -0.8%, slightly below the consensus of -0.7%, with a prior reading of -0.7%.

On Tuesday, the S&P 500 closed the session near its daily high, experiencing a modest loss of 0.2%. This negative trend was influenced, in part, by profit-taking activities following substantial gains since late October. Despite this, there was a lack of strong conviction from sellers, considering the seasonally strong period for the market. Both the NYSE and Nasdaq witnessed lower-than-average trading volumes. Even with the day's modest declines, the S&P 500 and Nasdaq Composite remain up 8.2% and 10.5%, respectively, for the month. Index performance was weighed down by relative weakness in certain mega-cap names, particularly NVIDIA (NVDA), which saw a 0.9% loss ahead of its market-moving earnings report after the close. Amazon (AMZN) also experienced a notable decline of 1.5%, attributed to reports of Jeff Bezos selling some stock. However, both NVDA and AMZN rebounded from their lowest levels as the broader market recovered from session lows. Market participants were digesting a mixed set of earnings reports from retailers. Lowe's (LOW), Best Buy (BBY), and American Eagle Outfitters (AEO) traded down after reporting earnings, while Dick's Sporting Goods (DKS) and Burlington Stores (BURL) closed higher post their results. Seven of the S&P 500 sectors recorded losses, with the health care sector (+0.6%) leading the gainers and the information technology sector (-0.8%) experiencing the most substantial decline. Separately, the FOMC Minutes for the Oct. 31 - Nov. 1 meeting indicated the committee's belief that the Fed can proceed cautiously but may consider tightening monetary policy if incoming data suggests a stall in progress toward aligning inflation with the Fed's 2.0% target. The market's reaction to the minutes was muted, as the information presented was largely in line with previous expectations. In the bond market, the 2-year note yield settled three basis points lower at 4.87%, while the 10-year note yield remained unchanged at 4.42%. This followed the news that existing home sales in October proceeded at their slowest annual sales pace (3.79 million) since August 2010. The key takeaway from the report highlighted that existing home sales continue to be constrained by high mortgage rates, elevated selling prices, and limited inventory.

On Wednesday, the market closed with gains, offering investors more reasons for gratitude ahead of the Thanksgiving Day holiday. Boosted by another strong earnings report from NVIDIA (NVDA), despite a sell-the-news response, and positive factors like an encouraging initial jobless claims report and a four-day pause in fighting between Israel and Hamas, the major indices added to their monthly gains. The day's advances, though modest, were supported by broad-based buying interest and a general lack of selling interest at the index level. Advancers outnumbered decliners, with the NYSE seeing a 9-to-5 margin and the Nasdaq a 13-to-8 margin. Both the Invesco S&P 500 Equal-Weight ETF (RSP) and the Vanguard Mega-Cap Growth ETF (MGK) gained 0.5%. Despite individual laggards like Deere (DE), Guess? (GES), Urban Outfitters (URBN), Nordstrom (JWN), and Autodesk (ADSK) following their earnings reports, and Tesla (TSLA) breaking below its 50-day moving average, the market overall maintained a positive disposition. Every sector finished higher except for the energy sector, which saw a marginal decline of 0.1%. The energy sector faced challenges throughout the day, influenced by a fluctuating session for oil prices and news that OPEC+ was delaying its meeting until November 30. Trading volume was light, as expected ahead of the holiday. The stock market will be closed on Thursday for Thanksgiving and will conclude trading early at 1:00 p.m. ET on Friday. In terms of economic data, initial jobless claims for the week ending November 18 decreased by 24,000 to 209,000, beating the consensus of 227,000. Continuing jobless claims for the week ending November 11 also decreased by 22,000 to 1.840 million. Durable goods orders for October declined 5.4% month-over-month, missing the consensus of -3.1%. Excluding transportation, durable goods orders were flat month-over-month. The final reading for the University of Michigan Consumer Sentiment Index for November came in at 61.3, surpassing the consensus of 60.9. However, it marked the fourth consecutive month of decline. The MBA Mortgage Applications Index was up 3.0% week-over-week, with refinance applications up 2% and purchase applications up 3%.

On Friday, the market lacked excitement, trading in a relatively subdued manner with very light volume and a scarcity of the typical interest, vigor, and news catalysts witnessed during a regular trading session. The market closed at 1:00 p.m. ET, contributing to a session that, particularly for SPDR S&P 500 ETF (SPY) traders, may have seemed inactive. The market-cap weighted S&P 500 moved within a seven-point range during the session, constrained by the relative weakness of mega-cap stocks offsetting gains in other names. Specifically, the S&P 500 Equal-Weight ETF (RSP) closed 0.3% higher, while the Vanguard Mega-Cap Growth ETF (MGK) finished 0.3% lower. The market-cap weighted S&P 500 ended the session with fractional gains. NVIDIA (NVDA) faced pressure after Reuters reported the delay of its China AI chip, contributing to the Nasdaq's underperformance, along with losses in Alphabet (GOOG), Meta Platforms (META), and Microsoft (MSFT). Apple (AAPL) also experienced declines following a Reuters report suggesting a year-over-year drop in smartphone sales during China's Singles Day, contrasting with strong growth for competitors Huawei and Xiaomi. Black Friday put retail stocks in focus, with the SDPR S&P Retail ETF (XRT) closing with a 0.6% gain. S&P 500 sector performance was mostly positive, with nine sectors gaining between 0.1% and 0.5%, while communication services (-0.7%) and information technology (-0.3%) were the two losing sectors. Advancers outpaced decliners by more than a 2-to-1 margin at both the NYSE and the Nasdaq. In terms of economic data, the preliminary November S&P Global US Manufacturing PMI was 49.4, compared to the final reading of 50.0 for October, and the preliminary November S&P Global US Services PMI was 50.8, versus the final reading of 50.6 for October.

The market indices closed with positive performances for the week, featuring the Dow Jones Industrial Average gaining 1.3%, the TSX slightly decreasing by -0.2%, the S&P 500 Index advancing by 1.0%, and the NASDAQ rising by 0.9%. In the bond market, there was a marginal decrease of -0.1%, with Canada Investment Grade Bonds showing a slight increase of 0.2%. The 10-year Treasury Yield and the 10-year GoC Yield remained unchanged at 4.47% and 3.74%, respectively. Oil prices experienced a modest decline of -0.3%, closing at $75.81 per barrel. The Canadian/USD Exchange rate saw a 0.9% increase, closing at $0.74. In terms of year-to-date changes, the Dow Jones showed a positive performance, gaining 6.8%, while the TSX was up by 3.8%. The S&P 500 Index exhibited a strong YTD return of 18.7%, and the NASDAQ outperformed with an impressive YTD return of 36.2%. The MSCI EAFE had a steady YTD return of 8.1%. In the bond market, both Bonds and Canada Investment Grade Bonds showed positive YTD returns of 1.2% and 1.8%, respectively. The 10-year Treasury Yield and the 10-year GoC Yield demonstrated modest YTD returns of 0.6% and 0.4%, respectively. Conversely, Oil experienced a YTD decline of -5.5%. The Canadian/USD Exchange rate exhibited a YTD return of -0.4%.

Previous update:

The market had a successful week, with the S&P 500 surpassing the 4,500 mark after hovering around 4,100 in late October. The positive trend was influenced by a lack of significant selling activity post a substantial uptick, coupled with a fear of missing out on potential further gains during a seasonally robust period for the market. While mega-cap stocks played a role in index performance, the broader market saw more substantial buying interest. The S&P 500, weighted by market capitalization, increased by 2.2%, and the Invesco S&P 500 Equal Weight ETF (RSP) surged by 3.4%, while the Vanguard Mega Cap Growth ETF (MGK) recorded a gain of 2.1%.

The momentum in the market was largely attributed to the October Consumer Price Index, which suggested that the Federal Reserve had concluded its rate hikes. Various economic indicators, including the October Producer Price Index, October Retail Sales, weekly initial jobless claims, and October Housing Starts data, supported the notion of a soft landing scenario for the economy. Consequently, the fed funds futures market eliminated the likelihood of further rate hikes and now anticipates a 61.7% probability of the first rate cut in May 2024, according to the CME FedWatch Tool.

Following this data, Treasury yields saw a significant decline, with the 2-year note yield falling 15 basis points to 4.90% and the 10-year note yield decreasing by 19 basis points to 4.44%. The S&P 500 sectors sensitive to interest rates, such as real estate (+4.5%), financials (+3.3%), and utilities (+3.0%), experienced notable gains. All 11 sectors traded higher during the week, with consumer staples (+0.6%) and energy (+0.9%) being the only ones to gain less than 1%.

Market participants were focused on earnings reports, with Walmart (WMT) and Target (TGT) noting a more cautious consumer sentiment. Despite this, Target saw significant gains after reporting results, and companies like Gap (GPS), Ross Stores (ROST), and Macy's (M) were standout winners. However, Applied Materials (AMAT), a leading chip equipment maker, faced a decline following reports of a Department of Justice (DOJ) criminal probe related to shipments to China's top chipmaker, SMIC. In other news, Congress passed a continuing resolution to avert a government shutdown, and Presidents Biden and Xi agreed to resume high-level, direct military talks, along with bilateral cooperation in combating global illicit drug manufacturing and trafficking. Looking ahead, the markets will be closed on Thursday and will close early at 1:00 p.m. ET on Friday in observance of Thanksgiving.

Monday, the major indices ended the session with little change following Friday's rally, as early selling pressure, driven by a perceived need for market consolidation, initially pushed stocks slightly lower. However, a recovery ensued, with the S&P 500 finding support around the 4,400 level after reaching a low of 4,393. Ahead of the release of the October Consumer Price Index on Tuesday, both buyers and sellers exhibited a lack of conviction. Notably, Boeing (BA) stood out as a winner in the DJIA, buoyed by news of multiple orders at the Dubai Airshow and reports that China might end its freeze of Boeing with a new 737 Max deal. The market's upward trajectory coincided with a pullback in Treasury yields from intraday highs. Monday's economic data was limited to the October Treasury Budget, revealing a deficit of $66.6 billion, attributable to outlays ($470.0 billion) exceeding receipts ($403.4 billion). It's important to note that the Treasury Budget data is not seasonally adjusted, preventing a direct comparison with the September deficit of $170.7 billion.

Tuesday, the major indices closed with substantial gains, finishing near their daily highs with above-average trading volume. The S&P 500, which had approached the 4,100 level on October 27, traded above 4,500 at its peak before settling just below that mark. The Russell 2000 saw a notable surge of 5.4%, bringing the index into positive territory for the year. Equities responded to a significant decline in interest rates following the October Consumer Price Index (CPI), which exceeded expectations and reinforced the market's belief that the Federal Reserve has concluded its rate hikes. The fed funds futures market adjusted, eliminating the probability of further rate hikes and now indicating a 65.4% chance of the first rate cut in May 2024, according to the CME FedWatch Tool. The buying activity was broad-based, encompassing various sectors, with notable individual performance from Home Depot (HD) following favorable Q3 results. In a review of Tuesday's economic data, the October CPI showed no change (compared to the consensus of 0.1%), with the Core CPI at 0.2% (versus the consensus of 0.3%). The key takeaway from the report is that inflation is moving in a positive direction, reinforcing the market's belief that the Fed is unlikely to raise the target range for the fed funds rate further.

Wednesday witnessed a positive performance in the stock market, with the major indices posting modest gains, extending a rally that commenced after Tuesday's CPI data. The S&P 500 closed slightly above the 4,500 level, registering a 0.2% gain, an impressive feat considering the index's 9.4% surge since October 27. The prevailing belief that the Federal Reserve has concluded its rate hikes contributed to the positive sentiment, further supported by economic data aligning with a soft landing scenario for the economy. The upbeat atmosphere was bolstered by Target's (TGT) substantial gain following better-than-expected earnings results, coupled with lingering concerns of missing out on additional gains during a seasonally strong market period. Despite the encouraging economic data, Treasuries faced some selling after significant gains the previous day. A review of Wednesday's economic data reveals a 2.8% increase in the Weekly MBA Mortgage Applications Index, October Retail Sales showing a -0.1% change (compared to the consensus of -0.3%), and October Retail Sales ex-auto at 0.1% (against the consensus of -0.2%). The report underscores that it is not adjusted for inflation, revealing a noticeable decline in consumer demand for goods in October compared to September. Additionally, October PPI reflected a -0.5% change (compared to the consensus of 0.1%), and October Core PPI was at 0.0% (against the consensus of 0.3%). The report signals a significant moderation in wholesale prices, expected to remain subdued unless there is a future surge in energy prices. The index for unprocessed goods for intermediate demand was down by 1.4%. Lastly, November's Empire State Manufacturing came in at 9.1 (compared to the consensus of -5.0), and September Business Inventories were at 0.4% (matching the consensus of 0.4%).

On Thursday, the S&P 500, closing above the 4,500 mark, and the Nasdaq Composite achieved marginal gains, primarily supported by mega-cap stocks. The broader market underwent routine consolidation, with losses being relatively modest compared to recent substantial gains. Notably, negative reactions to disappointing earnings and guidance from Walmart (WMT), Cisco (CSCO), and Palo Alto Networks (PANW) provided a rationale for market participants to capitalize on profits. Oil prices experienced a decline, reaching $72.92 per barrel, a 4.8% decrease, driven by concerns about a slowdown and technical selling, especially after closing below their 200-day moving average. In a review of Thursday's economic data, the Weekly Initial Claims came in at 231K (compared to the consensus of 220K), with the prior figure revised to 218K from 217K. Weekly Continuing Claims were reported at 1.865 million, revised from 1.833 million. The report aligns with the Federal Reserve's preferred scenario of observing softening in the labor market, with initial claims at their highest since August and continuing jobless claims at their highest since November 2021. Additionally, the October Export Price Index showed a -1.1% change, with the prior figure revised to 0.5% from 0.7%. The October Export Prices ex-agriculture saw a -1.0% change, and the prior figure was revised to 0.7% from 1.0%. The October Import Price Index reported a -0.8% change, revised from 0.4% to 0.1%, while October Import Prices ex-oil showed a -0.2% change. The November Philadelphia Fed Index came in at -5.9 (compared to the consensus of -7.5), and October Industrial Production reported a -0.6% change, with the prior figure revised from 0.3% to 0.1%. The October Capacity Utilization was 78.9% (against the consensus of 79.4%), revised from 79.5% to 79.7%. The report noted that the UAW strike adversely affected industrial production, but the resolution could turn motor vehicle and parts production into a positive factor for November. Lastly, the November NAHB Housing Market Index reported a value of 34 (compared to the consensus of 40), with the prior figure at 40.

On Friday, trading activity saw the major indices confined to relatively narrow ranges, with stocks closing the session below their highs, where the S&P 500 had briefly surpassed the 4,500 level. The Russell 2000 led index level gains, surging by 1.4%, driven by strength in its energy components as oil prices experienced a rebound. However, relative weakness in certain mega-cap stocks limited the progress of other major indices. The market-cap weighted S&P 500 saw a modest 0.1% increase, while the Invesco S&P 500 Equal Weight ETF (RSP) closed with a 0.5% gain. Positive contributions to the broader market came from significant gains in Ross Stores (ROST) and Gap (GPS) following their earnings reports. On the flip side, Applied Materials (AMAT) stood out as a losing stock after reporting earnings, with a Reuters report revealing it is under investigation by the Department of Justice (DOJ) regarding shipments to China's top chipmaker, SMIC, leading to a notable impact on overall market sentiment. In a review of Friday's economic data, total housing starts showed a 1.9% month-over-month increase but were down 4.9% year-over-year, reaching a seasonally adjusted annual rate of 1.372 million (compared to the consensus of 1.365 million). Building permits, considered a leading indicator, rose by 1.1% month-over-month but were down 4.4% year-over-year, with a seasonally adjusted annual rate of 1.487 million (compared to the consensus of 1.445 million). The key takeaway from the report is that building activity, particularly for much-needed single-family units, remains subdued in the face of higher costs and financing rates. Single-unit starts and permits experienced marginal increases, while the number of single-family units under construction and completed both declined on a monthly basis.

Closing the week, the TSX reached 20,173 points, marking a 2.6% increase for the week and a 4.1% gain year-to-date. The Dow Jones Industrial Average concluded at 34,947, showing a weekly rise of 1.9% and a year-to-date increase of 5.4%. The S&P 500 Index closed at 4,514, reflecting a 2.2% weekly gain and a substantial 17.6% year-to-date increase. In the realm of bonds, Canada Investment Grade Bonds saw a 0.9% weekly rise and a 1.6% gain year-to-date. The NASDAQ closed at 14,125, indicating a 2.4% weekly increase and an impressive 35.0% gain year-to-date. The MSCI EAFE reached 2,080 points, with a 3.4% weekly increase and a 7.0% gain year-to-date. The 10-year Treasury Yield settled at 4.43%, experiencing a minor 0.2% decrease for the week but showing a 0.6% rise year-to-date. The 10-year GoC Yield reached 3.68%, with a weekly decrease of 0.2% and a 0.4% gain year-to-date. Oil prices declined to $75.94 per barrel, marking a 1.6% decrease for the week and a notable 5.4% decrease year-to-date. Bonds reached $95.24, reflecting a 1.4% weekly increase and a 0.6% gain year-to-date. The Canadian/USD Exchange closed at $0.73, exhibiting a 0.8% weekly increase but showing a 1.3% decrease year-to-date.