The major U.S. indexes only managed to eke out small advances on Friday, but they posted their third- consecutive week of gains. However, the futures are pointing to a mixed open for today’s session. In overnight trading, markets in Asia also lacked direction, and the European exchanges are moving in a similar fashion. Meanwhile, oil prices have moved higher, with West Texas Intermediate up about 2%, to around $77.40 a barrel.
Stocks have rallied sharply in November, with the Dow Jones Industrials up 5.7% for the month so far, while the S&P 500 has gained 7.6%, and the tech-laden NASDAQ has advanced 9.9%. A good part of the momentum can be attributed to recent data indicating that inflation is weakening. This has made investors increasingly confident that the Federal Reserve may be done raising interest rates. Indeed, market prognosticators are virtually unanimous in thinking the central bank will maintain the status quo at the next two Federal Open Market Committee (FOMC) meetings scheduled for mid-December and late January. Moreover, Wall Street analysts are leaning toward a rate cut in May, followed by further reductions in the months that follow.
The economic calendar for the holiday shortened week is relatively light. Tomorrow the National Association of Realtors is scheduled to release its figures for existing home sales in October. The consensus is calling for a slight dip to 3.90 million, versus 3.96 million the month before. The Federal Reserve is also scheduled to release the minutes from its last meeting, which will be pored over for additional insight into the lead bank’s next steps. On Wednesday morning we get the Census Bureau’s report on U.S. durable goods orders for last month, where analysts are estimating a decline of around 3%, which would mark a sharp reversal from the 4.7% increase registered in September. Also, the Department of Labor is due to announce the number of initial jobless claims filed last week. The figure is widely expected to show a small drop, to 225,000, compared to 231,000 the week before.
Summing up Friday’s market moves, the Dow Jones Industrials gained one point, or 0.01%, the S&P 500 was up five points (0.1%), and the tech-laden NASDAQ moved 11 points higher (0.1%). - Mario Ferro
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
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