The S&P 500 Jumps As Positive Inflation News Takes Threat Of Near-Term Rate Hikes Off Table
The S&P 500 (Index: SPX) had one of its best weeks in 2023. The index rose nearly 2.2% to 4510.54. Since bottoming on 27 October 2023, the index has flirted with recording its fastest comeback ever after going into a correction, rising 9.5% in the weeks since.
There is one and only one story behind the past week's rise in stock prices. The October 2023 consumer price inflation report released on Tuesday, 14 November 2023 came in slightly lower than expected with indications U.S. inflation will continue trending downward. That change was enough to take the prospect of additional rate hikes by the Federal Reserve off the table, at least for the near-term, which boosted the outlook for publicly-traded companies in the U.S.
Other market-moving news headlines during the week did little to alter that updated expectation, with the outcome being seen as a jump in the S&P 500 on Tuesday followed by a relatively flat trajectory for stock prices afterward. The latest update to the dividend futures-based model's alternative futures chart captures that action:
(Click on image to enlarge)
Here is our summary of the week's market moving news headlines.
Monday, 13 November 2023
- Signs and portents for the U.S. economy:
- Bigger trouble developing in Asia, Pacific region:
- Signs of stimulus gaining traction in China:
- BOJ minions get some good news for a change:
- S&P 500 takes a pause ahead of U.S inflation data
Tuesday, 14 November 2023
- Signs and portents for the U.S. economy:
- Fed minions expected to start cutting rates in May 2024:
- Bigger trouble developing in China:
- BOJ minions thinking about really ending never-ending stimulus:
- Bigger trouble developing in the Eurozone:
- Nasdaq posts best day since April; S&P, Dow also rise as stocks rip big gains after CPI
Wednesday, 15 November 2023
- Signs and portents for the U.S. economy:
- Bigger stimulus, mixed economic growth signs developing in China:
- Bigger trouble developing in Japan, as BOJ minions signal end may come next year for never-ending stimulus:
- Bigger trouble developing in the Eurozone:
- Nasdaq, S&P, Dow close in the green as more economic data fuels soft landing hopes
Thursday, 16 November 2023
- Signs and portents for the U.S. economy:
- Santa's sleigh to be lighter as people buy fewer toys
- Investment funds stocking up on US farmland in safe-haven bet
- Oil prices slip on US crude build and China demand worries
- Mortgage rates fall for a third week - Freddie Mac
- US labor market loosening as weekly jobless claims hit three-month high
- US import prices post largest drop in seven months
- Fed minions create uncertainty about their next actions, but say they'll keep shrinking their balance sheet:
- Bigger trouble, stimulus developing in China:
- Bigger trouble developing in Japan:
- Cisco, Walmart drag down Nasdaq, S&P, Dow; yields fall as traders parse economic data
Friday, 17 November 2023
- Signs and portents for the U.S. economy:
- Fed minions are apparently meditating about many things:
- Fed officials find a bit of Zen on way to next policy decision
- Fed's Collins: Not ready to say the rate hike cycle is over
- Fed's Barr says tougher capital plan would have limited impact on borrowing costs
- Fed's Goolsbee expects easing shelter inflation to seal path to 2%
- Boston Fed's Collins: Central bank needs better view of full employment
- Bigger trouble developing in Brazil:
- BOJ minions say they won't consider stopping never-ending stimulus until they hit 2% inflation target:
- Bigger inflation developing in the Eurozone, ECB minions focusing on lowering their cost of paying interest on bank reserves, don’t want anyone to think they might cut rates soon:
- S&P 500 closes up slightly, traders digest earlier gains, Fed comments
The CME Group's FedWatch Tool anticipates the Fed will hold the Federal Funds Rate steady in a target range of 5.25-5.50% through next April (2024-Q2). Starting from 1 May (2024-Q2), 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, which is six weeks earlier than expected a week ago.
The Atlanta Fed's GDPNow tool's estimate of real GDP growth for the current quarter of 2023-Q4 dipped slightly to +2.0% from the +2.1% annualized growth it projected a week ago.
Image credit: Prompt: Microsoft Bing Image Creator. "bull running out of a gate, golden hour, nikon 35, highly detailed, photorealistic, 4k".
More By This Author:
Fall 2023 Snapshot Of Expected Future S&P 500 EarningsFall 2023 Snapshot Of The Future For S&P 500 Dividends
September 2023 Snapshot Of Who Owns The US National Debt
Disclosure: Materials that are published by Political Calculations can provide visitors with free information and insights regarding the incentives created by the laws and policies described. ...
more