Equities saw a 3rd consecutive week of higher returns and more broad-based, at that.
All major indices and all investment styles are positive year-to-date. Some asset classes and select sectors that had been all but forgotten in 2023 made significant strides last week. Small Cap equities had their 2nd best week of the year, while Basic Materials was up more than 4% and Utilities were up more than 3% for the week. Much of the move higher in equities and the broadening of participation has to do with the perception that the Fed is done raising interest rates. There is now a 100% probability, according to current Fed Futures, that there will be no rate hike at the Fed’s final meeting in December.
In addition, last week’s release of October CPI and PPI put a dent in the theory that inflation is “sticky.”
Both consumer prices and producer prices were lower than expected last month and were lower on a year-over-year basis. In fact, some of the key commodities—Corn, Wheat, Soybeans, & Rice—that many will use in their holiday meals over the next several weeks are lower year-over-year. It’s likely that the positive momentum in equities will continue through year-end. Recent long positions taken by hedge funds and CTAs in U.S. equities over the last 10 days is the highest since 2014. Volatility should be lower during this holiday-shortened week of trading.
Disclosures
The information contained herein is for informational purposes only and is developed from sources believed to be providing accurate information. The opinions expressed are those of the author, are for general information, and should not be considered a solicitation for the purchase or sale of any security. The decision to review or consider the purchase or sell of any security should not be undertaken without consideration of your personal financial information, investment objectives and risk tolerance with your financial professional.
Forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.
Any market indexes discussed are unmanaged, and generally, considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general.
Past Performance does not guarantee future results.
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