November Rally Continues on Positive Inflation Data:
Stocks continued their November rally last week as investors celebrated the release of lower-than-forecast inflation data. This positive news fueled investor optimism, driving further gains for stocks.
Over the last month, The Dow Jones Industrial Average returned 5.86%, while the S&P 500 returned 7.32%. The Nasdaq Composite Index returned 9.65%.
Source: Charles Schwab & Co, Inc.
Stocks March Higher
A better-than-anticipated consumer inflation number on Tuesday sent bond yields sharply lower, igniting a powerful, exceptionally broad-based rally that saw 91% of all New York Stock Exchange volume advancing in price and a similarly substantial advance (85%) on the NASDAQ. Small-cap stock performance was solid, surging 5.2%, more than double the advance of the S&P 500.1
Further gains came the following day as wholesale price inflation rose even slower than consumer prices. The rally paused in the final days of trading as stocks digested their gains and investors assessed weak retail sales and industrial production reports and a rise in continuing jobless claims.
Two inflation reports released last week, the Consumer Price Index (CPI) and the Producer Price Index (PPI), showed continued inflation progress. Consumer prices were flat in October from the previous month, while the 12-month increase was 3.2%. Both were below market forecasts. Core CPI (excluding food and energy) also moderated, rising just 0.2% in October and 4.0% from a year ago–below forecast. The climb in the annual core CPI was the lowest in two years.2
Producer prices confirmed the disinflationary picture, as wholesale prices declined 0.5% in October (versus a +0.1% forecast). It was the biggest decline in 3 ½ years. Over the last 12 months, wholesale prices rose just 1.3%.3
This Week: Key Economic Data
Source: Bloomberg Finance L.P.
This Week: Companies Reporting Earnings
At Concord Asset Management, we design portfolios for the long run, with the ability to navigate various market cycles. However, you can have confidence that we are monitoring these market-moving events, and we will make reasonable, tactical adjustments as necessary.
Chief Investment Officer
Concord Asset Management
Footnotes and Sources
1CNBC, November 14, 2023
2CNBC, November 14, 2023
3CNBC, November 14, 2023
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