Weekly Update – November 20, 2023
The Week on Wall Street
Stocks extended their November rally last week as investors cheered lower-than-forecast inflation data.
The Dow Jones Industrial Average gained 1.94%, while the Standard & Poor’s 500 added 2.24%. The Nasdaq Composite index rose 2.37% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, increased 3.36%.1,2,3
Stocks March Higher
A better-than-anticipated consumer inflation number on Tuesday sent bond yields sharply lower, igniting a powerful, exceptionally broad-based rally that saw 91% of all New York Stock Exchange volume advancing in price and a similarly substantial advance (85%) on the NASDAQ. Small-cap stock performance was solid, surging 5.2%, more than double the advance of the S&P 500.4
Further gains came the following day as wholesale price inflation rose even slower than consumer prices. The rally paused in the final days of trading as stocks digested their gains and investors assessed weak retail sales and industrial production reports and a rise in continuing jobless claims.
Inflation Cools
Two inflation reports released last week, the Consumer Price Index (CPI) and the Producer Price Index (PPI), showed continued inflation progress. Consumer prices were flat in October from the previous month, while the 12-month increase was 3.2%. Both were below market forecasts. Core CPI (excluding food and energy) also moderated, rising just 0.2% in October and 4.0% from a year ago–below forecast. The climb in the annual core CPI was the lowest in two years.5
Producer prices confirmed the disinflationary picture, as wholesale prices declined 0.5% in October (versus a +0.1% forecast). It was the biggest decline in 3 ½ years. Over the last 12 months, wholesale prices rose just 1.3%.6
THIS WEEK: KEY ECONOMIC DATA
Tuesday: Existing Home Sales. FOMC Minutes.
Wednesday: Durable Goods Orders. Jobless Claims. Consumer Sentiment.
Friday: Purchasing Managers’ Index Composite Flash.
THIS WEEK: COMPANIES REPORTING EARNINGS
Monday: Agilent Technologies, Inc. (A)
Tuesday: Nvidia Corporation (NVDA), Lowe’s Companies, Inc. (LOW), Analog Devices, Inc. (ADI)
Wednesday: Deere & Company (DE)
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1. The Wall Street Journal, November 17, 2023.
2. The Wall Street Journal, November 17, 2023.
3. The Wall Street Journal, November 17, 2023.
4. CNBC, November 14, 2023.
5. CNBC, November 14, 2023.
6. CNBC, November 14, 2023.