Month: December 2022

The Markets (as of market close December 23, 2022)

Stocks ended a turbulent week generally lower as investors digested the latest inflation data and the Federal Reserve’s possible response. Of the benchmark indexes listed here, only the Dow and the Global Dow managed to eke out gains by the end of last week. Inflation rose by only 0.1% in November, according to the latest data from the Bureau of Economic Analysis (see below). Investors are hoping this is the latest sign that inflationary pressures have peaked, which could influence the Fed to scale back its interest-rate hikes. However, news that China is experiencing another surge in COVID cases could prompt more government-imposed lockdowns, which would impact the global economy. Ten-year Treasury yields advanced the most since early April. The dollar edged lower, while gold prices climbed higher. Crude oil prices increased for the second week in a row, nearing $80.00 per barrel.

Stocks closed last Monday lower for the fourth straight session. The S&P 500 hit its lowest level in more than a month after declining 0.9%. The Nasdaq dropped 1.5%, the Russell 2000 fell 1.4%, the Dow dipped 0.5%, and the Global Dow slid 0.2%. Bond prices fell, driving the yield on 10-year Treasuries up 9.9 basis points to 3.58%. Crude oil prices rose nearly 2.0% to reach $75.67 per barrel. The dollar was flat, while gold prices fell marginally.

Last Tuesday saw stocks barely snap a four-day losing streak. The Global Dow (0.7%) and the Russell 2000 (0.5%) led the benchmark indexes listed here, followed by the Dow (0.3%) and the S&P 500 (0.1%). The tech-heavy Nasdaq ended the day flat. Ten-year Treasury yields added 10.3 basis points to close at 3.66%. The dollar slipped lower, while gold prices advanced. Crude oil prices gained marginally, ending the session at about $76.02 per barrel.

Stocks rallied for the second straight day last Wednesday. The S&P 500 rose for the second day in a row, while the Nasdaq had its best day since late November. Improvement in consumer confidence and some strong earnings supported risk sentiment. Among the benchmark indexes listed here, only the Global Dow (1.1%) did not advance at least 1.5% by the close of trading. Ten-year Treasury yields were flat, crude oil prices climbed higher for the third day in a row, the dollar advanced, while gold prices dipped marginally lower.

Wall Street saw its mini-rally end last Thursday as each of the benchmark indexes listed here lost value. Solid economic data increased worries that the Federal Reserve will extend its aggressive monetary policy longer than hoped. The Nasdaq led the declining indexes, falling 2.2%, followed by the S&P 500 (-1.4%), the Russell 2000 (-1.3%), the Dow (-1.1%), and the Global Dow (-0.7%). Ten-year Treasuries edged lower, while the dollar moved higher. Crude oil prices ended their rally, dipping minimally to $78.26 per barrel. Gold prices lost 1.4% on the day.

Stocks closed last Friday on an uptick, with each of the benchmark indexes listed here claiming gains. The S&P 500 advanced 0.6% to lead the indexes, followed by the Dow (0.5%), the Russell 2000 (0.4%), the Global Dow (0.3%), and the Nasdaq (0.2%). Ten-year Treasury yields added 8.2 basis points to close at 3.75%. The dollar edged lower, while gold prices rose nearly 0.5%. Crude oil prices gained $2.16 to close at around $79.65 per barrel.

Stock Market Indexes

Market/Index	2021 Close	Prior Week	As of 12/23	Weekly Change	YTD Change
DJIA	36,338.30	32,920.46	33,203.93	0.86%	-8.63%
Nasdaq	15,644.97	10,705.41	10,497.86	-1.94%	-32.90%
S&P 500	4,766.18	3,852.36	3,844.82	-0.20%	-19.33%
Russell 2000	2,245.31	1,763.42	1,760.93	-0.14%	-21.57%
Global Dow	4,137.63	3,650.73	3,693.09	1.16%	-10.74%
Fed. Funds target rate	0.00%-0.25%	4.25%-4.50%	4.25%-4.50%	50 bps	425 bps
10-year Treasuries	1.51%	3.48%	3.75%	27 bps	224 bps
US Dollar-DXY	95.64	104.81	104.33	-0.46%	9.09%
Crude Oil-CL=F	$75.44	$74.31	$79.65	7.19%	5.58%
Gold-GC=F	$1,830.30	$1,802.90	$1,805.20	0.13%	-1.37%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

• The final estimate for third-quarter gross domestic product showed the economy accelerated at an annual rate of 3.2%, exceeding expectations. GDP declined 1.6% and 0.6%, respectively, in the first and second quarters. The increase in GDP was driven in part by advances in exports; federal, state, and local government spending; consumer spending; and nonresidential fixed investment that were partly offset by decreases in residential fixed investment and private inventory investment. Imports, which are a negative in the calculation of GDP, decreased. The personal consumption expenditures price index, a measure of inflation, increased 4.3% in the third quarter, lower than the 7.1% advance in the second quarter.
• Personal income and disposable (after-tax) income rose 0.4% in November, according to the latest data from the Bureau of Economic Analysis. Consumer spending, as measured by personal consumption expenditures, rose 0.1%. Consumer prices edged up 0.1% in November. Prices, less food and energy, increased 0.2%. Since November 2021, consumer prices have increased 5.5%, lower than the 12 months ended in October (6.1%).
• The housing sector continued to weaken in November. Sales of existing homes fell for the tenth consecutive month after declining 7.7% in November. Year over year, sales are down 35.4%. Single-family homes sales also dropped in November, falling 7.6% from the previous month and 35.2% since November 2021. According to the National Association of Realtors®, the rapid increase in mortgage rates coupled with low inventories have hurt housing affordability and brought sales activity to levels resembling those that existed during the COVID-19 lockdown. Total housing inventory in November represented a supply of 3.3 months, unchanged from October. The median existing home price for all housing types in November was $370,700, a decrease of 2.2% from October ($378,800) but 3.5% above the November 2021 price ($358,200). The median existing single-family home price was $376,700 in November, down from $384,600 in October but up from the November 2021 price of $365,000.
• Sales of new single-family homes increased for the second straight month in November, advancing 5.8% above the revised October rate. However, sales are down 15.3% from November 2021. Inventory of available single-family homes for sale stood at 8.6 months, down from the October rate of 9.3 months. The median sales price of new single-family homes sold in November was $471,200 ($484,700 in October), while the average sales prices was $543,600 ($533,400) in October.
• The number of issued building permits and housing starts declined in November from the previous month. Authorized building permits were 11.2% below the October rate and 22.4% under the November 2021 pace. In November, issued building permits for single-family home construction were 7.1% under the October figure. Housing starts in November were 0.5% below the October estimate and 16.4% under the November 2021 rate. Single-family housing starts were 4.1% less than the previous month’s tally. Home completions rose by 10.8% in November and were 6.0% higher than the prior year’s total.  In November, single-family home completions were 9.5% above the October rate. 
• New orders for manufactured durable goods decreased 2.1% in November following three consecutive monthly increases. Excluding transportation, new orders increased 0.2%. Excluding defense, new orders decreased 2.6%. Transportation equipment drove the decrease in new orders, falling 6.3% following three consecutive monthly increases.
• Retail prices for regular gasoline continued to slide last week. According to the U.S. Energy Administration, the national average retail price for regular gasoline was $3.120 per gallon on December 19, $0.119 per gallon below the prior week’s price and $0.175 lower than a year ago. Also as of December 19, the East Coast price decreased $0.107 to $3.118 per gallon; the Gulf Coast price fell $0.086 to $2.641 per gallon; the Midwest price declined $0.123 to $2.911 per gallon; the West Coast price dropped $0.164 to $3.983 per gallon; and the Rocky Mountain price decreased $0.141 to $3.086 per gallon. Residential heating oil prices averaged $4.606 per gallon on December 19, $0.261 above the previous week’s price and $1.262 per gallon more than a year ago.
• For the week ended December 17, there were 216,000 new claims for unemployment insurance, an increase of 2,000 from the previous week’s level, which was revised up by 3,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended December 10 was 1.2%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended December 10 was 1,672,000, a decrease of 6,000 from the previous week’s level, which was revised up by 7,000. States and territories with the highest insured unemployment rates for the week ended December 3 were Alaska (2.3%), Puerto Rico (2.1%), California (2.0%), New Jersey (2.0%), Montana (1.7%), Minnesota (1.7%), New York (1.6%), Rhode Island (1.6%), Massachusetts (1.5%), and Washington (1.5%). The largest increases in initial claims for unemployment insurance for the week ended December 10 were in Connecticut (+471), the District of Columbia (+237), Nevada (+157), Kentucky (+153), and Illinois (+138), while states with the largest decreases were in New York (-7,134), California (-4,830), Georgia (-4,273), Texas (-3,954), and Pennsylvania (-2,669).

Eye on the Week Ahead

There is very little economic data released during the week between Christmas and New Year’s Day. In addition, trading is customarily muted as investors take a break while preparing for the new year.

The Markets (as of market close December 16, 2022)

Wall Street saw stocks end last week lower as investors worried that the Federal Reserve’s push to slow rising inflation may lead the economy into a recession. Early in the week, investors were buoyed by softer-than-expected inflation data, which preceded the Fed’s expected 50-basis-point interest-rate hike. However, Federal Reserve officials were clear that interest rate increases will continue until it is evident that inflation has been controlled. After beginning last week on a high note, equities endured three straight days of losses. The Nasdaq, the Global Dow, and the S&P 500 each fell more than 2.0%. The Russell 2000 and the Dow also declined. Crude oil prices advanced, but remain subdued on recession fears. Ten-year Treasury yields slid lower by the end of the week. The dollar and gold prices dipped lower.

Stocks rallied to kick off the week last Monday as investors awaited upcoming inflation data and the results from the Federal Reserve meeting. Bargain hunters took advantage of depressed stock values from the previous week. Among the benchmark indexes listed here, the Dow jumped 1.6%, followed by the S&P 500 (1.4%), the Nasdaq (1.3%), the Russell 2000 (1.2%), and the Global Dow (0.3%). Crude oil prices ($73.45 per barrel), the dollar, and 10-year Treasuries (3.61%) climbed higher. Gold prices slid lower.

Last Tuesday, investors tried to gauge the impact a lower-than-expected consumer price index (see below) might have on the Federal Reserve’s aggressive policy to corral inflation. Stocks ended higher following a volatile session. The Global Dow (1.1%) and the Nasdaq (1.0%) led the benchmark indexes listed here, followed by the Russell 2000 (0.8%), the S&P 500 (0.7%), and the Dow (0.3%). Yields on 10-year Treasuries fell 11.0 basis points to close at 3.50%. Crude oil prices climbed to their highest levels in more than a week reaching $75.43 per barrel on cold weather forecasts. The dollar fell by more than 1.0%, while gold prices gained more than $30.00 to hit $1,822.40 per ounce.

Stocks ended a two-day rally last Wednesday after the Federal Reserve hiked interest rates by another 50 basis points, while indicating that its “restrictive policy” will continue for some time in order to ensure price stability. The Nasdaq slid 0.8%, followed by the S&P 500 and the Russell 2000, which declined 0.6%. The Dow dropped 0.4% and the Global Dow edged down 0.3%. Ten-year Treasury yields ended flat. Crude oil prices continued to advance, reaching $77.39 per barrel by late afternoon. The dollar and gold prices fell. While Fed Chair Jerome Powell indicated that the Fed intends to maintain its aggressive policy aimed at bringing inflation down, he did say that the cycle could be near an end.

Last Thursday saw stocks continue to fall, with each of the benchmark indexes listed here falling at least 1.5%. The Nasdaq slid 3.2%, the Russell 2000 lost 2.6%, the S&P 500 dipped 2.5%, the Global Dow declined 2.4%, and the Dow fell 2.3%. Ten-year Treasury yields fell to 3.45%. Crude oil prices ended a mini-rally, falling to $76.14 per barrel. The dollar advanced, while gold prices declined.

Stocks fell for the third consecutive session last Friday. Each of the benchmark indexes listed here ended the day in the red, with the S&P 500 dropping 1.1%, while the Global Dow and the Nasdaq slid 1.0%. The Dow fell 0.9% and the Russell 2000 declined 0.6%. Ten-year Treasury yields added 3.2 basis points to reach 3.48%. Crude oil prices retreated, ending the week at about $74.32 per barrel. The dollar and gold prices advanced.

Stock Market Indexes

Market/Index	2021 Close	Prior Week	As of 12/16	Weekly Change	YTD Change
DJIA	36,338.30	33,476.46	32,920.46	-1.66%	-9.41%
Nasdaq	15,644.97	11,004.62	10,705.41	-2.72%	-31.57%
S&P 500	4,766.18	3,934.38	3,852.36	-2.08%	-19.17%
Russell 2000	2,245.31	1,796.66	1,763.42	-1.85%	-21.46%
Global Dow	4,137.63	3,732.00	3,650.73	-2.18%	-11.77%
Fed. Funds target rate	0.00%-0.25%	3.75%-4.00%	4.25%-4.50%	50 bps	425 bps
10-year Treasuries	1.51%	3.56%	3.48%	-8 bps	197 bps
US Dollar-DXY	95.64	104.97	104.81	-0.15%	9.59%
Crude Oil-CL=F	$75.44	$71.53	$74.31	3.89%	-1.50%
Gold-GC=F	$1,830.30	$1,807.90	$1,802.90	-0.28%	-1.50%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

• The Federal Open Market Committee hiked the federal funds rate by 50 basis points to a target rate range of 4.25%-4.50%, ending a string of 75 basis-point rate increases. In support of its decision, the Committee noted that spending and production have experienced modest growth, job gains have been robust, the unemployment rate remaines low, and inflation levels remain elevated due to supply and demand imbalances related to the pandemic, higher food and energy prices, broader price pressures, and the ongoing Russia/Ukraine war. Reiterating its stated goals of maximum employment and inflation at the rate of 2.0% over the longer run, the FOMC expects that the pace of ongoing rate increases will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments. The Committee will adjust its stance if risks emerge that could impede the attainment of the aforementioned goals.
• Inflationary pressures finally may be easing. The consumer price index for November advanced 0.1% after increasing 0.4% in the previous month. Prices less food and energy rose 0.2% in November, the smallest increase since August 2021. Over the 12 months ended in November, the CPI has increased 7.1%, the slowest 12-month pace since December 2021. Among the items contributing to the November increase were prices for food (0.5%), fuel oil (1.7%), apparel (0.2%), and shelter (0.6%). In November, prices decreased in medical care services (-0.7%), used cars and trucks (-2.9%), energy (-1.6%), and gasoline (-2.0%).
• Retail sales fell 0.6% in November after advancing 1.3% in October. Year to date, retail sales are up 6.5%. Retail trade sales slid 0.8% last month but are 5.4% above the November 2021 rate. In November, the decline in retail sales was broad based, with sales notably declining at motor vehicle and parts dealers (-2.3%); furniture and home furnishings stores (-2.6%); electronics and appliance stores (-1.5%); building material, garden equipment, and supplies dealers (-2.5%); gasoline stations (-0.1%); clothing and clothing accessories stores (-0.2%); department stores (-2.9%); and nonstore, or online, retailers (-0.9%). Retail sales increased at food and beverage stores (0.8%), food and drinking places (0.9%), and health and personal care stores (0.7%).
• In another sign that inflationary pressures may have peaked, both import and export prices declined in November. Import prices dipped 0.6% following a 0.4% decrease in October. Despite the recent decreases, prices for U.S. imports rose 2.7% over the past year, the smallest 12-month advance since January 2021. Export prices dropped 0.3% after decreasing 0.4% the previous month. Export prices haven’t recorded an increase since June 2022. Prices for U.S. exports advanced 6.3% from November 2021 to November 2022, the smallest 12-month increase since February 2021.
• Total industrial production fell for the second consecutive month in November after declining 0.2% in October. Decreases of 0.6% for manufacturing and 0.7% for mining were partly offset by a rebound of 3.6% for utilities following three months of declines. Since November 2021, total industrial production is up 2.5%.
• The Treasury budget deficit for November was $248.5 billion, well above the October monthly deficit of $87.9 billion and the November 2021 deficit of $191.3 billion. In November 2022, total government receipts were $252.1 billion ($318.5 billion in October), while government expenditures totaled $500.6 billion ($406.4 billion in October). For the first two months of fiscal year 2023, the deficit sits at $336.4 billion compared to the $356.4 billion deficit over the same period in fiscal year 2022.
• Prices at the pump finally dipped below their 2021 levels last week. According to the U.S. Energy Administration, the national average retail price for regular gasoline was $3.239 per gallon on December 12, $0.151 per gallon below the prior week’s price and $0.076 lower than a year ago. Also as of December 12, the East Coast price decreased $0.129 to $3.225 per gallon; the Gulf Coast price fell $0.081 to $2.727 per gallon; the Midwest price declined $0.178 to $3.034 per gallon; the West Coast price dropped $0.222 to $4.147 per gallon; and the Rocky Mountain price decreased $0.177 to $3.227 per gallon. Residential heating oil prices averaged $4.558 per gallon on December 12, $0.297 below the previous week’s price but $1.208 per gallon more than a year ago.
• Claims for unemployment insurance declined during the last reporting period. For the week ended December 10, there were 211,000 new claims for unemployment insurance, a decrease of 20,000 from the previous week’s level, which was revised up by 1,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended December 3 was 1.2%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended December 3 was 1,671,000, an increase of 1,000 from the previous week’s level, which was revised down by 1,000. States and territories with the highest insured unemployment rates for the week ended November 26 were Alaska (2.2%), California (2.1%), New Jersey (2.1%), Puerto Rico (2.0%), Montana (1.7%), Minnesota (1.7%), New York (1.6%), Massachusetts (1.5%), Rhode Island (1.5%), and Washington (1.5%). The largest increases in initial claims for unemployment insurance for the week ended December 3 were in California (+15,306), New York (+8,777), Texas (+8,639), Georgia (+7,806), and Illinois (+5,083), while the only decrease was in Connecticut (-139).

Eye on the Week Ahead

As December and 2022 wind down, the latest economic data likely will influence the market and economy heading into 2023. This week, the final estimate of third-quarter gross domestic product is scheduled for release. The previous estimate showed the economy expanded at an annual rate of 2.9%. The latest data on the housing sector is also available this week with the release of the November reports on new and existing home sales. The November report in personal income and outlays will be released at the end of the week. The Federal Reserve often takes note of personal consumption expenditures (consumer spending) and the personal consumption expenditures price index, an indicator of inflation.

The Markets (as of market close December 9, 2022)

Stocks couldn’t maintain momentum from the previous two weeks, ultimately closing last week in the red. The small caps of the Russell 2000 gave back over 5.0%, while the Nasdaq dropped 4.0%. The S&P 500 fell 3.4%, the Dow declined 2.8%, and the Global Dow dipped 1.7%. Ten-year Treasury yields gained 6.0 basis points, and the dollar inched higher. Crude oil prices fell nearly 11.0%, closing at about $71.50 per barrel, which is below their 2021 closing values. Investors reacted poorly to a higher-than-expected producer price index last Friday and may anticipate a similar result when the consumer price index is released early this week.

Wall Street got off to a rough start last Monday as stocks suffered their worst daily decline in nearly a month. Energy and tech shares closed lower, helping to drag down the benchmark indexes listed here. The small caps of the Russell 2000 fell 2.8%, the Nasdaq lost 1.9%, the S&P 500 dropped 1.8%, the Dow dipped 1.4%, and the Global Dow declined 0.9%. Yields on 10-year Treasuries rose 9.3 basis points to 3.75%. Crude oil prices declined nearly 3.3%, falling to $77.33 per barrel. The dollar advanced, while gold prices lost 1.6% to close the session at $1,780.50 per ounce.

Stocks continued to trend lower last Tuesday. The Nasdaq dropped 2.0%, followed by the Russell 2000 (-1.5%) and the S&P 500 (-1.4%). The Dow and the Global Dow fell 1.0%. Crude oil prices declined 3.4%, hitting $74.33 per barrel even with OPEC+ countries cutting production and China tentatively easing COVID restrictions. The yield on 10-year Treasuries declined 8.6 basis points to 3.51%. The dollar inched higher, while gold prices rebounded.

Last Wednesday saw stocks close generally lower for the third consecutive day. Once again, the Nasdaq led the declines in the benchmark indexes, falling 0.5%. The Global Dow and the Russell 2000 lost 0.3%, while the S&P 500 lost for the fifth straight day after sliding 0.2%. The Dow ended the day flat. Crude oil prices, 10-year Treasury yields, and the dollar lost value. Crude oil prices fell to $72.40 per barrel, the lowest closing price since late December 2021. The yield on 10-year Treasuries declined 10.5 basis points to hit 3.40%. The dollar slipped marginally, down 0.42% against a basket of currencies. Gold prices rose $17.60 to $1,800.00 per ounce.

Wall Street rebounded last Thursday, likely attributable to bargain hunters and dip buyers. Tech shares moved higher, helping to drive the Nasdaq up 1.1%. The S&P 500 rose 0.8%, ending its longest losing streak in two months. The Russell 2000 added 0.6%, while the Dow and the Global Dow gained 0.6% and 0.5%, respectively. Ten-year Treasury yields climbed higher for the first time in the last three sessions, gaining 8.3 basis points to hit 3.49%. Crude oil prices slid lower, ending the session at about $71.84 per barrel. The dollar declined, while gold prices inched higher.

A late move away from risk pulled stocks lower last Friday as bond yields surged. The Dow dropped 0.9%, followed by the Nasdaq and the S&P 500, which lost 0.7%. The Russell 2000 led the declining indexes listed here, falling 1.2%. The Global Dow managed to break even. Ten-year Treasury yields added 7.6 basis points to reach 3.56%. Crude oil eked out a minimal gain. The dollar and gold prices advanced.

Stock Market Indexes

Market/Index	2021 Close	Prior Week	As of 12/9	Weekly Change	YTD Change
DJIA	36,338.30	34,429.88	33,476.46	-2.77%	-7.88%
Nasdaq	15,644.97	11,461.50	11,004.62	-3.99%	-29.66%
S&P 500	4,766.18	4,071.70	3,934.38	-3.37%	-17.45%
Russell 2000	2,245.31	1,892.84	1,796.66	-5.08%	-19.98%
Global Dow	4,137.63	3,797.60	3,732.00	-1.73%	-9.80%
Fed. Funds target rate	0.00%-0.25%	3.75%-4.00%	3.75%-4.00%	0 bps	375 bps
10-year Treasuries	1.51%	3.50%	3.56%	6 bps	205 bps
US Dollar-DXY	95.64	104.50	104.97	0.45%	9.76%
Crude Oil-CL=F	$75.44	$80.13	$71.53	-10.73%	-5.18%
Gold-GC=F	$1,830.30	$1,811.80	$1,807.90	-0.22%	-1.22%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

• Prices producers received for goods and services sold rose 0.3% in November, the same increase as in October and September. For the 12 months ended in November, producer prices have risen 7.4%, down from 8.0% over the 12 months ended in October. In November, producer prices rose 0.4% excluding food and energy, and 0.3% excluding food, energy, and trade services. For the year ended in November, producer prices excluding food and energy rose 6.2%, down from 6.7% for the year ended in October. For the third month in a row, prices for services accounted for most of the overall producer price increase in November. Prices for services climbed 0.4%, while prices for goods inched up 0.1%.
• Business activity in the services sector contracted for the second consecutive month in November. The S&P Global US Services PMI Business Activity Index registered 46.2 in November, down from 47.8 in October. A reading of 50 or above indicates business growth. A decline in new orders and client demand led to the decrease in business activity for service providers. The rate of contraction is the fastest since August. Although firms remained keen to pass on higher costs to clients through a further hike in selling prices during November, the pace of increase moderated.
• The international trade in goods and services report, released December 6, is for October. The goods and services trade deficit advanced $78.2 billion, or 5.4%, in October. Exports declined 0.7%, while imports rose 0.6%. The October increase in the goods and services deficit reflected an increase in the goods deficit of $6.1 billion and an increase in the services surplus of $2.1 billion. Year to date, the goods, and services deficit increased $136.9 billion, or 19.9%, from the same period in 2021. Both imports and exports increased 19.8%. The third-quarter figures show goods and services surpluses, in billions of dollars, with South and Central America ($28.2), Netherlands ($15.2), Singapore ($11.6), Brazil ($7.6), Australia ($7.1), Hong Kong ($6.8), United Kingdom ($6.4), Switzerland ($5.4), Belgium ($2.0), and Ireland ($0.3). Deficits were recorded with China ($94.9), Mexico ($35.2), Vietnam ($29.4), European Union ($25.6), Germany ($17.8), Canada ($15.0), Japan ($13.9), Taiwan ($13.0), India ($11.1), Italy ($10.5), South Korea ($9.0), Malaysia ($8.8), France ($2.7), Israel ($2.6), and Saudi Arabia ($0.5).
• According to the U.S. Energy Administration, the national average retail price for regular gasoline was $3.390 per gallon on December 5, $0.144 per gallon below the prior week’s price but $0.049 higher than a year ago. Also as of December 5, the East Coast price decreased $0.114 to $3.354 per gallon; the Gulf Coast price fell $0.107 to $2.808 per gallon; the Midwest price declined $0.162 to $3.212 per gallon; the West Coast price dropped $0.223 to $4.369 per gallon; and the Rocky Mountain price decreased $0.135 to $3.404 per gallon. Residential heating oil prices averaged $4.861 per gallon on December 5, $0.281 below the previous week’s price but $1.540 per gallon more than a year ago.
• Claims for unemployment insurance edged higher during the last reporting period. For the week ended December 3, there were 230,000 new claims for unemployment insurance, an increase of 4,000 from the previous week’s level, which was revised up by 1,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended November 26 increased 0.1 percentage point to 1.2%. The advance number of those receiving unemployment insurance benefits during the week ended November 26 was 1,671,000, an increase of 62,000 from the previous week’s level, which was revised up by 1,000. States and territories with the highest insured unemployment rates for the week ended November 19 were Alaska (2.0%), Puerto Rico (1.8%), New Jersey (1.7%), California (1.6%), Montana (1.5%), New York (1.4%), Massachusetts (1.3%), Rhode Island (1.3%), Nevada (1.2%), and Oregon (1.2%). The largest increases in initial claims for unemployment insurance for the week ended November 26 were in Wisconsin (+1,542), Connecticut (+817), Ohio (+578), Tennessee (+278), and Massachusetts (+130), while the largest decreases were in California (-11,198), Illinois (-4,968), Georgia (-4,632), Texas (-4,611), and Florida (-2,425).

Eye on the Week Ahead

This week, the Federal Open Market Committee meets for the last time in 2022. While there’s no doubt the FOMC will hike interest rates in its ongoing effort to slow rising inflation, will the Committee scale back the increase to 50 basis points? The results of the November CPI, which is released during the FOMC meeting, may provide some indication of the course the Committee may take in December and over the next few months.

The Markets (as of market close December 2, 2022)

Wall Street extended its rally for the second consecutive week as each of the benchmark indexes listed here posted gains. As is most often the case lately, the market experienced plenty of volatility last week. Ultimately, a hotter-than-expected labor report reignited inflation concerns and the continuation of an aggressive monetary policy by the Federal Reserve. Average hourly earnings have steadily increased over the past three months, while solid monthly job gains have shown that there are more positions to be filled. Investors not only dealt with inflation concerns and the Fed’s response, but traders had to assess the impact of the ongoing Russia/Ukraine war and China’s response to rising COVID cases. Despite the tumult, stocks continued to advance. Ten-year Treasury yields fell as bond prices climbed higher. Crude oil prices rallied from a three-week lag, advancing 5.0%. The dollar slid lower, while gold prices posted gains for the second week in a row.

Last Monday, Wall Street reacted negatively to the likelihood of more interest-rate hikes and the potential economic impact of China’s COVID-related lockdowns. The small caps of the Russell 2000 dropped 2.1% to lead the declining benchmark indexes. The Nasdaq fell 1.6%, while the S&P 500 and the Dow lost 1.5%. The Global Dow slid 1.4%. Ten-year Treasury yields inched up 1.2 basis points to 3.70%. Crude oil prices and the dollar advanced marginally, while gold prices fell 0.8%. Investors were discouraged to hear several Federal Reserve officials indicate that more work has to be done to curb inflation, including more substantial interest-rate increases. China’s response to rising COVID cases has led to demonstrations, which has added to that country’s uncertain economic situation.

Stocks ended mixed last Tuesday, with the Nasdaq (-0.6%) and the S&P 500 (-0.2%) declining, while the Russell 2000 (0.4%) and the Global Dow (0.2%) eked out gains. The Dow ended the session flat. The yield on 10-year Treasuries climbed 4.5 basis points to close at 3.74%. Crude oil prices, gold prices, and the dollar advanced. Investors may have tempered their enthusiasm for risk in anticipation of Federal Reserve Chair Jerome Powell’s speech on Wednesday.

News that the Federal Reserve may soften the pace of interest-rate hikes sent stocks higher last Wednesday. The Nasdaq surged 4.4% and the S&P 500 gained 3.1% to lead the benchmark indexes listed here. The Russell 2000 advanced 2.6%, followed by the Dow (2.2%) and the Global Dow (1.7%). Crude oil prices rose for the first time in several sessions following a report that U.S. reserves declined and that China may lessen COVID-related restrictions. Long-term bond prices advanced, pulling yields lower. Ten-year Treasury yields slid 4.5 basis points to 3.70%. The dollar slid lower, while gold prices increased.

Stocks closed last Thursday mixed following the prior day’s rally as investors awaited the latest jobs report due out the following day. Of the benchmark indexes listed here, only the Nasdaq (0.1%) and the Global Dow (0.9%) closed in the black. The Dow (-0.6%) led the declining indexes, followed by the Russell 2000 (-0.3%) and the S&P 500 (-0.1%). Ten-year Treasury yields dropped 17.4 basis points to 3.52% as bond prices jumped higher. The dollar declined, while gold prices climbed notably higher, gaining $57.20 to reach $1,817.10 per ounce. Crude oil prices advanced minimally, closing at about $81.33 per barrel.

Last Friday saw stocks close with mixed results. The Russell 2000 gained 0.6%, while the Dow and the Global Dow barely eked out gains. The Nasdaq slid 0.2% and the S&P 500 dipped 0.1%. The much anticipated jobs report (see below) came in better than expected, adding to the likelihood that the Federal Reserve will keep tightening even if the pace of interest-rate hikes slows. Ten-year Treasury yields fell for the third straight session, down 2.3 basis points to close at 3.50%. Crude oil prices scaled back after a brief rally, dipping $1.10 to end the session at about $80.13 per barrel. The dollar and gold prices declined.

Stock Market Indexes

Market/Index	2021 Close	Prior Week	As of 12/2	Weekly Change	YTD Change
DJIA	36,338.30	34,347.03	34,429.88	0.24%	-5.25%
Nasdaq	15,644.97	11,226.36	11,461.50	2.09%	-26.74%
S&P 500	4,766.18	4,026.12	4,071.70	1.13%	-14.57%
Russell 2000	2,245.31	1,869.19	1,892.84	1.27%	-15.70%
Global Dow	4,137.63	3,751.92	3,797.60	1.22%	-8.22%
Fed. Funds target rate	0.00%-0.25%	3.75%-4.00%	3.75%-4.00%	0 bps	375 bps
10-year Treasuries	1.51%	3.69%	3.50%	-19 bps	199 bps
US Dollar-DXY	95.64	105.96	104.50	-1.38%	9.26%
Crude Oil-CL=F	$75.44	$76.28	$80.13	5.05%	6.22%
Gold-GC=F	$1,830.30	$1,754.00	$1,811.80	3.30%	-1.01%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

• There were 263,000 new jobs added in November, in line with average growth over the prior three months (282,000). By comparison, 647,000 new jobs were added in November 2021. Job growth has averaged 392,000 in 2022, evidencing a slowdown in the number of new jobs added over the second half of the year. In November, notable job gains occurred in leisure and hospitality, health care, and government. Employment declined in retail trade and in transportation and warehousing. The unemployment rate, at 3.7%, was unchanged in November and has sat within a range of 3.5% to 3.7% since March. The number of unemployed persons slid by 48,000 to 6.0 million in November. Both the labor force participation rate and the employment-population ratio dipped one percentage point to 62.1% and 59.9%, respectively. In November, average hourly earnings rose by $0.18, or 0.6%, to $32.82. Over the past 12 months, average hourly earnings have increased by 5.1%. In November, the average work week declined by 0.1 hour to 34.4 hours.
• The second estimate of gross domestic product revealed that the economy accelerated at an annualized rate of 2.9% in the third quarter. The initial estimate showed the GDP advanced 2.6%. GDP decreased 0.6% in the second quarter. The increase in GDP reflected increases in exports, consumer spending, nonresidential (business) fixed investment, state and local government spending, and federal government spending that were partly offset by decreases in residential fixed investment and private inventory investment. Imports, which are a negative in the calculation of GDP, decreased. Personal consumption expenditures, a measure of consumer spending, rose 1.7% in the third quarter, while the personal consumption expenditures price index, a measure of inflation, increased 4.3%.
• Personal income advanced a notable 0.7% in October, according to the latest data from the Bureau of Economic Analysis. Consumers were apparently undeterred by rising prices and interest rates as personal consumption expenditures advanced 0.8% in October. The personal consumption expenditures price index, a measure of inflation, advanced 0.3% in October and 6.0% for the last 12 months, down from 6.2% for the 12 months ended in September. Core prices, excluding food and energy, rose 0.2% in October and 5.0% since October 2021, down 0.2 percentage point from the same period ended in September.
• In October, the number of job openings edged down 353,000 to 10.3 million, according to the latest Job Openings and Labor Turnover Summary. In October, job openings decreased in state and local government (excluding education), nondurable goods manufacturing, and federal government. The number of job openings increased in other services and in finance and insurance. In October, the number and rate of hires changed little at 6.0 million and 3.9%, respectively. In October, the number of total separations, which include quits, layoffs, and discharges, changed little at 5.7 million, and the rate was unchanged at 3.7%.
• The manufacturing sector weakened in November, according to the S&P Global US Manufacturing PMI™. The purchasing managers’ index posted 47.7 in November, down from 50.4 in October, marking the first decline in the manufacturing sector since June 2020. The downturn in operating conditions was widespread, with decreases in production, output, and new orders. Employment growth slowed as backlogs of work waned.
• According to the latest data from the Census Bureau, the international trade in goods deficit increased 7.7% to $99.0 billion in October. Exports fell $4.7 billion, or 2.6%, while imports increased $2.4 billion, or 0.9%.
• According to the U.S. Energy Administration, the national average retail price for regular gasoline was $3.534 per gallon on November 28, $0.114 per gallon below the prior week’s price but $0.154 higher than a year ago. Also as of November 28, the East Coast price decreased $0.070 to $3.468 per gallon; the Gulf Coast price fell $0.106 to $2.915 per gallon; the Midwest price declined $0.145 to $3.374 per gallon; the West Coast price dropped $0.187 to $4.592 per gallon; and the Rocky Mountain price decreased $0.097 to $3.539 per gallon. Residential heating oil prices averaged $5.147 per gallon on November 28, $0.284 below the previous week’s price but $1.784 per gallon more than a year ago.
• Claims for unemployment insurance declined during the last reporting period. For the week ended November 26, there were 225,000 new claims for unemployment insurance, a decrease of 16,000 from the previous week’s level, which was revised up by 1,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended November 19 remained at 1.1%. The advance number of those receiving unemployment insurance benefits during the week ended November 19 was 1,608,000, an increase of 57,000 from the previous week’s level. States and territories with the highest insured unemployment rates for the week ended November 12 were Puerto Rico (2.1%), Alaska (2.0%), New Jersey (2.0%), California (1.8%), New York (1.4%), Massachusetts (1.3%), Montana (1.3%), Rhode Island (1.3%), Minnesota (1.2%), Washington (1.2%), and Oregon (1.2%). The largest increases in initial claims for unemployment insurance for the week ended November 19 were in Illinois (+6,586), California (+4,423), Georgia (+3,717), Michigan (+3,031), and Minnesota (+2,896), while the largest decreases were in Montana (-318), North Carolina (-133), and Arkansas (-131).

Eye on the Week Ahead

The Producer Price Index for November is available at the end of this week. The PPI is a measure of the change in prices received by producers of goods and services, and is an indicator of inflation. October saw producer prices rise by 0.2%, which was below expectations. For the year, producer prices fell from 8.5% for the 12 months ended in September to 8.0% for the year ended in October.

The Markets (as of market close November 30, 2022)

A late rally at the end of the month helped push stocks higher in November, marking the second monthly advance in a row. Each of the benchmark indexes posted solid monthly gains, led by the Global Dow, which advanced nearly 11.0%. The large caps of the S&P 500 and the Dow rose more than 5.0%. The Nasdaq climbed 4.4%, while the Russell 2000 added 2.2%.

Investors welcomed news from Federal Reserve Chair Jerome Powell, who announced that the pace of interest-rate hikes can slow as soon as December, which likely means a 50-basis point increase, ending the string of 75-basis point rate hikes. The Fed may be taking note of the fact that the labor market has begun to cool (see the employment report below), while consumer price increases are showing signs of moderation. Nevertheless, prices remain elevated entering the holiday shopping season. However, business conditions remained generally positive, and consumers continued to spend, despite rising interest rates and decreasing levels of confidence (see report below).

Despite the relative good news from the Federal Reserve, Wall Street faced the ramifications of political unrest in China over that nation’s COVID-related restrictions. The issues in China are likely to have a negative impact on the global economy, particularly the U.S. economy, as China is a main source of the global supply-chain system, which is still trying to recover from the pandemic.

A drop in U.S. crude supplies boosted crude oil prices at the end of November. Nevertheless, prices ended the month lower for the fifth loss in the last six months. China’s COVID restrictions impacted the demand for crude oil, helping to keep prices muted. Prices at the pump declined in November. The national average retail price for regular gasoline was $3.534 per gallon on November 28, down from $3.742 on October 31 but $0.154 higher than a year ago.

Bond prices rose in November, pulling yields lower. Ten-year Treasury yields fell 37 basis points. The Treasury yield curve, often seen as a warning sign of an impending recession, recorded its steepest inversion in over 40 years as the 10-year Treasury yield dropped 0.78 percentage point below the two-year yield. The dollar slid lower against a basket of world currencies. Gold prices rose 9.0% in November, ending a streak of seven consecutive monthly declines.

Stock Market Indexes

Market/Index	2021 Close	Prior Month	As of November 30	Monthly Change	YTD Change
DJIA	36,338.30	32,732.95	34,589.77	5.67%	-4.81%
Nasdaq	15,644.97	10,988.15	11,468.00	4.37%	-26.70%
S&P 500	4,766.18	3,871.98	4,080.11	5.38%	-14.39%
Russell 2000	2,245.31	1,846.86	1,886.58	2.15%	-15.98%
Global Dow	4,137.63	3,432.62	3,782.87	10.20%	-8.57%
Fed. Funds target rate	0.00%-0.25%	3.00%-3.25%	3.75%-4.00%	75 bps	375 bps
10-year Treasuries	1.51%	4.07%	3.70%	-37 bps	219 bps
US Dollar-DXY	95.64	111.58	106.03	-4.97%	10.86%
Crude Oil-CL=F	$75.44	$86.10	$80.41	-6.61%	6.59%
Gold-GC=F	$1,830.30	$1,635.70	$1,783.00	9.01%	-2.58%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark the performance of specific investments.

Latest Economic Reports

• Employment: Employment rose by 261,000 in October after increasing by 263,000 in September. Monthly job growth has averaged 407,000 thus far in 2022 compared with 562,000 in 2021. In October, notable job gains occurred in health care, professional and technical services, and manufacturing. The unemployment rate increased by 0.2 percentage point to 3.7% in October, and the number of unemployed persons rose by 306,000 to 6.1 million. The unemployment rate has been in a narrow range of 3.5% to 3.7% since March. Among the unemployed, the number of workers who permanently lost their jobs remained at about 1.2 million in October. The labor force participation rate, at 62.2%, and the employment-population ratio, at 60.0%, were unchanged in October and have shown little net change since early this year. In October, average hourly earnings rose by $0.12, or 0.4%, to $32.58. Over the 12 months ended in October, average hourly earnings increased by 4.7% (5.0% for the 12 months ended in September). In October, the average work week was 34.5 hours for the fifth month in a row.
• There were 225,000 initial claims for unemployment insurance for the week ended November 26, while the total number of insured unemployment claims was 1,608,000 as of November 19. A year ago, there were 240,000 initial claims for unemployment insurance and 1,976,000 total insured unemployment claims.
• FOMC/interest rates: As expected, the Federal Open Market Committee increased the federal funds target rate range in November by 75 basis points to 3.75%-4.00%. Inflationary pressures have begun to show some signs of waning. The FOMC noted that “In determining the pace of future increases in the target range, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.” As such, while interest-rate hikes may not pause, the amount of each increase may lessen from the string of 75-basis point hikes.
• GDP/budget: Gross domestic product increased 2.9% in the third quarter, according to the second estimate released by the Bureau of Economic Analysis. The third-quarter increase follows decreases in the first quarter (-1.6%) and the second quarter (-0.6%). The increase in GDP reflected advances in exports; consumer spending; nonresidential (business) fixed investment; and federal, state, and local government spending that were partly offset by decreases in residential fixed investment and private inventory investment. Imports, which are a subtraction in the calculation of GDP, decreased. Consumer spending rose 1.7% in the third quarter after increasing 2.0% in the second quarter. Most of the increase in consumer spending was attributable to a 2.7% jump in services, while spending on durables slid 0.3%. Also dragging down GDP was a 4.1% decline in fixed investment, within which residential fixed investment dropped 26.8%, evidence of the slowdown in the housing sector. Nonresidential fixed investment jumped 5.1% in the third quarter after inching up 0.1% in the previous quarter. Exports rose 15.3% in the third quarter, while imports fell 7.3% after increasing 2.2% in the second quarter. The personal consumption expenditures price index, a measure of inflation, increased 4.3% in the third quarter following a 7.3% rise in the second quarter.
• For October, the first month of fiscal year 2023, the Treasury budget deficit came in at $87.8 billion, down from $429.7 billion in September and under the October 2021 deficit of $165.1 billion. Compared to September, government receipts in October were $318.6 billion, a decrease of $169.1 billion, while government expenditures were $406.4 billion, $511.1 billion less than in September.
• Inflation/consumer spending: Overall, while inflationary pressures continued to advance in October, there are signs that price increases are easing. The personal consumption expenditures price index, a preferred inflation indicator of the Federal Reserve, advanced 0.3% in October, the same increase as in September. For the year ended in October, prices have increased 6.0%. Prices less food and energy increased 0.2% in October and 5.0% since October 2021. Prices for durable goods fell 0.6% in October, while prices for nondurable goods rose 0.8%. Prices for services rose 0.4% in October. Food prices increased 0.4%, while energy prices advanced 2.5%. Consumer spending increased 0.8% in October. Spending on goods increased 1.1%, while consumer spending on services advanced 0.2%. Personal income and disposable (after-tax) personal income rose 0.7% in October. Wages and salaries increased 0.5% in October after advancing 0.6% in September.
• The Consumer Price Index rose 0.4% in October, the same increase as in September. For the 12 months ended in October, the CPI increased 7.7% (8.2% for the 12-month period ended in September). Both the monthly and 12-month increases were below expectations. In October, the CPI less food and energy rose 0.3%, down from the September increase of 0.6%. For the 12 months ended in October, the CPI less food and energy rose 6.3% (6.6% since September 2021). Prices for shelter (0.8%) contributed over half of the overall CPI increase in October, with prices for gasoline and food also moving higher. In October, prices for used cars and trucks declined 2.4%, prices for apparel slid 0.7%, and prices for medical services decreased 0.6%. For the 12 months ended in October, food prices increased 10.9%, energy prices rose 17.6% (fuel oil prices increased 68.5%), prices for shelter advanced 6.9%, and prices for transportation services rose 15.2%.
• Producer prices for goods and services rose 0.2% in October following a 0.4% increase in September. Producer prices increased 8.0% since October 2021 (8.5% for the 12 months ended in September). Prices less foods, energy, and trade services increased 0.2% in October and 5.4% since October 2021. October producer prices for goods moved up 0.6%, while prices for services slid 0.1%, the first decline since November 2020.
• Housing: Sales of existing homes retreated for the ninth consecutive month in October, falling 5.9% from the September estimate. Year over year, existing home sales were 28.4% under the October 2021 total. According to the latest survey from the National Association of Realtors®, rising mortgage rates and dwindling inventory have impacted sales. The median existing-home price was $379,100 in October, down from $383,500 in September but 6.6% higher than in October 2021 ($355,700). In October, unsold inventory of existing homes represented a 3.1-month supply at the current sales pace, down 0.8% from both September 2022 and October 2021. Sales of existing single-family homes fell 6.4% in October and 28.2% since October 2021. The median existing single-family home price was $384,900 in October, down from $389,600 in September but 6.2% over the October 2021 price.
• Sales of new single-family homes reversed course, climbing 7.5% in October after declining 10.9% in September. Sales are down 5.8% since October 2021. The jump in new home sales may be partly attributable to purchasers using prequalified mortgages that were locked in at a lower interest rate. Inventory sat at an 8.9-month supply in October (9.4 months in September). The median sales price of new single-family houses sold in October was $493,000 ($455,700 in September). The October average sales price was $544,000 ($516,400 in September).
• Manufacturing: Industrial production decreased 0.1% in October after inching up 0.1% (revised) in September. While manufacturing output rose 0.1%, the indexes for both mining (-0.4%) and utilities (-1.5%) declined in October. The decline in mining was attributable to a drop in oil and gas extraction, which outweighed improvements in oil and gas well drilling and in coal mining. The decline in utilities reflected a decrease in electric utilities, which more than offset an increase in natural gas utilities. Overall, industrial production was up 3.3% since October 2021. The major market groups recorded mixed results in October. Gains were registered by consumer goods, business equipment, and defense and space equipment, while losses were posted by construction supplies and materials.
• October saw new orders for durable goods beat expectations after increasing 1.0%. The October increase followed a 0.3% jump in durable goods orders in September. Excluding transportation, new orders rose 0.5% in October. Excluding defense, new orders increased 0.8%. Transportation equipment drove the October increase, climbing 2.1%. New orders for capital goods jumped 1.9% in October after increasing 0.4% the previous month.
• Imports and exports: Import and export prices declined in October, indicating inflationary pressures may be easing. According to the U.S. Bureau of Labor Statistics, import prices slid 0.2% in October after falling 1.1% the previous month. Export prices dipped 0.3% in October after declining 1.5% in September. Import prices have not recorded a monthly increase since June 2022. Despite recent declines, import prices are up 4.2% since October 2021, the smallest yearly advance since the 12 months ended February 2021. With the October decline, export prices have fallen in each of the last four months, reflecting weakness in global demand. Export prices have increased 6.9% since October 2021.
• The international trade in goods deficit was $99.0 billion in October, up 7.7% from September. Exports of goods fell 2.6% in October following a 1.9% decline in September. Imports of goods rose 0.9% in October after increasing 1.0% in September. Year to date, exports rose 10.7%, while imports increased 12.6%.
• The latest information on international trade in goods and services, released November 3, is for September and shows that the goods and services trade deficit increased by 11.6% from the August deficit. September exports slid 1.1%, while imports increased 1.5%. Year over year, the goods and services deficit increased 20.2% from the same period in 2021. Both exports and imports increased 20.2% since October 2021.
• International markets: Inflationary pressures have been soaring in Japan. Consumer prices rose in October for the 14th consecutive month, and have risen 3.7% over the last 12 months. Higher producer and import costs have been passed on to consumers, hiking prices for food, beverages, electronic appliances, and other consumer products and services. The government of the United Kingdom, in an effort to combat rising prices, indicated it would significantly tighten its fiscal policy after projecting a 9.1% inflation rate for this year. Despite that prediction, the annual rate of inflation in the eurozone fell in November for the first time since June 2021. However, the lag in inflation isn’t likely to curtail the European Central Bank from increasing interest rates further. The economy in China contracted in November as weakening economic output resulted from government-led lockdowns due to rising COVID cases. Overall for the markets in November, the STOXX Europe 600 Index rose 6.5%. The United Kingdom’s FTSE advanced roughly 6.2%. Japan’s Nikkei 225 Index advanced 1.1%, while China’s Shanghai Composite Index climbed 4.9%.
• Consumer confidence: The Conference Board Consumer Confidence Index® decreased in November for the second consecutive month. The November index stands at 100.2, down from 102.2 in October. The Present Situation Index, based on consumers’ assessment of current business and labor market conditions, declined to 137.4 in November, down from 138.7 in October. The Expectations Index, based on consumers’ short-term outlook for income, business, and labor market conditions, fell to 75.4 in November (77.9 in October).

Eye on the Month Ahead

Rising inflation, and the government’s response to it, continued to influence the market in November. The Federal Open Market Committee increased the federal funds rate by 75 basis points in November for the fourth time this year. However, indications are that the Committee may scale back interest-rate hikes beginning in December. Oversupply and waning demand drove crude oil prices lower in November. Nevertheless, prices are expected to rise again in December as the cold weather should increase demand. As to the stock market, December is usually a good month for equities, which should make for a solid fourth quarter.