November 4, 2023 Market Update

The U.S. stock market surged in the week of trading through Friday, November 3rd on renewed expectations that the Federal Reserve’s interest-rate hikes are done.  The S&P 500 Index jumped 5.9%, marking the first weekly gain in the past three and lifting the benchmark to its highest close since October 17th.  

The change in outlook triggered heavy buying in the bond market.  The Vanguard Total Bond Market ETF (BND), for example, jumped 1.9% for the week – easily its biggest weekly gain this year.  Correspondingly, the 10-year Treasury yield fell to end the week at 4.55%, the lowest level since late-September (prices and yields move inversely). 

There were no major market-influencing surprises last week, but there were several developments worth noting:

• All major asset classes, other than cash, declined in October, marking the third straight month of losses for most of the major markets around the world and the longest consecutive monthly decline since the pandemic.  

• The central bank left interest rates unchanged again at its policy meeting on Wednesday, while Friday’s payrolls report was softer than expected as U.S. employers added just 150,000 jobs in October, as compared to September’s gain of 297,000.  The two events revived forecasts that the rate-hiking cycle that started in March 2022 has ended.

• U.S. home prices increased in August for the seventh consecutive month.  Mortgage rates are around 8.5% and have resulted in fewer homeowners looking to trade up.  As a result, there are fewer homes for sale, which in turn is driving up prices of the few homes that are on the market.

• Consumer confidence, as measured by the Conference Board’s Consumer Confidence Survey, fell in October to its lowest level since May.

That’s all for now.  Have a great weekend and invest wisely my friends.