Weekly stock market recap
Luke Abbott, CFA
Helping professionals across LATAM make informed investment decisions for their individual financial goals.
After last week’s record-breaking rally, U.S. stock indexes saw a pullback, with the S&P 500, Dow, and NASDAQ retreating 1% to 3%. The shift reversed from the prior week’s 5% to 6% surge following the November 5 election.
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Inflation Stays Sticky
October’s Consumer Price Index showed a slight uptick, with an annual rate of 2.6% compared to September’s 2.4%. While aligned with expectations, the data underscores ongoing challenges in bringing inflation closer to the Federal Reserve’s 2% target.
Yields Continue to Climb
The 10-year U.S. Treasury yield reached 4.50% intraday for the first time in five months before closing at 4.44% on Friday. This steady increase from mid-September’s low of 3.62% highlights growing caution in the bond market.
Small-Cap Struggles
Small-cap stocks, tracked by the Russell 2000 Index, dropped 4% this week after a 9% surge the previous week. This continued volatility underscores small-caps' year-to-date underperformance compared to their large-cap peers.
Bitcoin’s Meteoric Rise
Bitcoin reached new heights for the second straight week, trading around $91,000 by Friday after briefly touching $93,000 earlier in the week. The cryptocurrency has soared from $77,000 just one week ago.
Fed Signals Patience
Comments from Federal Reserve Chair Jerome Powell suggested a slowdown in rate cuts may be on the horizon. Powell noted, “The economy is not sending any signals that we need to be in a hurry to lower rates,” fueling speculation that the Fed may pause cuts at December’s meeting.
Retail Shows Strength
Retail sales rose a solid 0.4% in October, beating expectations. Additionally, September’s sales were revised sharply upward. Adding to the optimism, weekly unemployment claims fell to their lowest level in six months, signaling resilience in the labor market.
Earnings Exceed Expectations
With earnings season nearing its end, S&P 500 companies are on track for a 5.4% third-quarter earnings increase—outperforming the 4.2% growth analysts had expected at the start of the season.
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Luke Abbott, CFA