The S&P 500 (Index: SPX) rose nearly 0.8% to close at 4594.63 on Friday, 1 December 2023. That’s the highest close the index has reached during 2023, putting it just 4.2% below its all-time record high close of 4,796.56 from 3 January 2022.Since the late October 2023 spike in long-term U.S. Treasury yields, stock prices have risen as the outlook for economic growth the U.S. economy shows signs of slowing. In the past week, the Atlanta Fed’s GDPNow tool’s estimate of real GDP growth for the current quarter of 2023-Q4 dropped to +1.2% from last week’s projected +2.1% annualized growth following gloomy reports on new construction and manufacturing during the week that was.Combined with more data pointing to slowing demand-driven inflation, the prospects for interest rate reductions in 2024 has increased. The CME Group’s FedWatch Tool now anticipates the Fed will hold the Federal Funds Rate steady in a target range of 5.25-5.50% through next February (2024-Q1). Starting from 20 March (2024-Q1), investors expect deteriorating economic conditions will force the Fed to start a series of quarter point rate cuts at six-to-twelve-week intervals through the end of 2024.In the short term, that’s positive for stock prices because lower interest rates benefit firms that rely on debt to finance their growth and because indications of reduced earnings from slowing economic conditions have yet to register. The latest update for the alternative futures chart shows the trajectory of the S&P 500 is consistent with investors focusing their attention on either the current quarter of 2023-Q4 or the slightly more distant future quarter of 2024-Q1, as the short-term echo event affecting the dividend futures-based model projections that we discussed in last week’s edition has come to an end.latest updateOther stuff happened to influence the trajectory of stock prices, here’s our summary of the past week’s market moving headlines:Monday, 27 November 2023
- Brent falls below $80 ahead of OPEC+ meeting
- More US shoppers tack on buy now, pay later debt for Cyber Monday
- Higher mortgage rates weigh on US new home sales in October
- Fed may need four years to recoup income loss, St. Louis Fed study says
- US recession will prompt 175 basis points in Fed cuts next year, DB economists say
- China’s industrial profits growth slows, keeps stimulus calls alive
- China needs to unblock, sustain financial channels for private firms
- China’s central bank pledges to support domestic demand
- Japan’s corporate service inflation climbs in sign of broadening price pressures
- ECB’s inflation fight progressing but not yet done: Lagarde
- Wall Street gets creative as regulators demand more capital
Tuesday, 28 November 2023
- Oil benchmark Brent tops $80 ahead of OPEC+ meeting
- Fed’s Bowman says she still expects another interest rate hike
- Fed’s Waller: “Increasingly confident” policy is in the right spot
- China’s central bank head pledges to support growth, urges reforms
- Japan’s price trend gauge hits record, heightens case for BOJ exit
- Japanese firms raise monthly regular pay by record amount this year – government poll
- Euro zone corporate lending contracts as economy shrinks: ECB data
Wednesday, 29 November 2023
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US economy grows 5.2% in third quarter; higher interest rates eroding momentum
- Q3 GDP Revised Higher To 5.2% As Soaring Government Spending Offsets Lower Private Consumption
- Contracts to buy existing homes decline to a record-low in October – NAR
- WTI Extends Losses After Across-The-Board Inventory Builds, Record Crude Production
- Overly cautious Fed could lead to mild US recession next year -Vanguard
- Fed hawks and doves: The latest from US central bankers
- Ackman Flip-Flops, Now Sees First Rate Cut As Soon As March
- BOJ policymaker rules out near-term policy shift, calls for caution
- BOJ policymaker says premature to debate exit from negative rate policy
Thursday, 30 November 2023
- Oil falls over 2% after OPEC+ cuts fall short of expectations
- US consumer spending cools; labor market gradually slowing
- US existing home sales to stay subdued next year, along with prices
- Fed officials feel rate hikes likely done, but too soon to know
- China’s factories fall deeper into contraction, more policy support expected
- China factory activity surprisingly expands in November – Caixin PMI
- China factory activity surprisingly expands in November – Caixin PMI
- ECB’s Nagel: inflation trends encouraging but rate cut talk too early
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Euro zone inflation tumble pits ECB against markets
- German inflation eases to 2.3% in November
- ECB Rate-Cut Expectations Soar After EU Inflation Cools More Than Expected
- Salesforce rallies on strong forecasts, earnings
Friday, 1 December 2023
- Oil prices fall more than 2% as investors wary of OPEC+ cuts
- US manufacturing mired in weakness, economy heading for slowdown
- Powell says Fed to move ‘carefully’ on interest rates, ‘soft landing’ taking shape
- US bond investors brace for Fed rate cuts in 2024
- Fed hawks, doves, and centrists: How US central bankers’ views are changing
- BoC to cut rates starting in Q2 2024, house prices seen flat in 2024: Reuters poll
- Goldman Sachs now expects ECB’s first rate cut in Q2 2024
- US bond investors brace for Fed rate cuts in 2024
- Powell Comments Send Everything Soaring, Gold Hits All Time High, Dollar Plummets As Market Prices In Rate Cuts
Just a few more weeks to go for 2023!More By This Author:Median Household Income In October 2023 New And Revised Data Suggests Possible Negative Change In Trend For U.S. New Home Market CapLess Than Useful Data: Inflation Indices
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