The major stock market averages posted a nice rally last Friday, as Treasury yields calmed/cooled. The Dow Jones Industrial Average gained nearly 400 points (about 1.2%), while the NASDAQ Composite and Standard & Poor’s 500 Indices added 2.1%, and 1.6% respectively. All 11 S&P sectors gained ground, with the technology sector showing leadership. Microsoft rallied 2.5% to a new all-time high, Apple increased 2.3%, Netflix rose 2.8%, Nvidia added 3%, and Meta Platforms rose 2.6%.
For the week – the Dow rose .7% to 34,283, the NASDAQ increased 2.4% to 13,798, and the S&P advanced 1.3% to 4,415 – marking the second consecutive weekly gain for the three major averages. Equity prices bounced around last week, being pushed/pulled primarily by volatility in Treasury yields (which have eased a bit from 16-year highs), along with comments from Fed Chair Jerome Powell, indicating another interest rate hike may be coming to help fight inflation.
Looking to the week ahead, get ready for retail week. Major retailers scheduled to report earnings results this week include Home Depot, Target, TJX Companies, Gap, Macy’s, BJ’s Wholesale Club, and Walmart. Further, we’ll get a macro look at retail, with the release of retail sales data. The U.S. Census Bureau reports October Retail Sales data on Wednesday. Consensus estimates are consumer spending declined .4% on a month over month basis. Markets will be watching all these numbers closely to gauge the health of the economy and buying power of consumers.
Also, this week, investors will be keeping a close eye on the Consumer Price Index for October. Consensus expectations are the U.S. Bureau of Labor Statistics will report a 3.3% year-over-year increase, following a 3.7% increase in September. Inflation data is a key factor for the Federal Reserve in determining monetary policy. We expect news from the Federal Reserve to be a primary driver of market direction, especially now that earning season is wrapping up and largely in the rearview mirror. Looking a bit further out, we are beginning to think about a Santa Claus Rally, but more on that later in the year!
As always, please contact us with any questions or if you would like to set up a meeting.
All the best – Southport Station Financial Management, LLC