Weekly Update – November 18, 2024
The Week on Wall Street
Stocks fell last week as the postelection rally lost momentum amid an inflation uptick and cautious comments from Fed officials.
The Standard & Poor’s 500 Index fell 2.08 percent, while the Nasdaq Composite Index declined 3.15 percent. The Dow Jones Industrial Average lost 1.24 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, dropped by 2.38 percent.1,2
Rally Fizzles, Data Rattles
Stocks began the week with modest gains as all three major indexes hit record highs. On Tuesday, stocks took a breather with monthly inflation pending.3
News that the Consumer Price Index (CPI) ticked up slightly in October injected some uncertainty into the markets. The Producer Price Index released the following day showed wholesale inflation ticked up last month. While both the CPI and PPI aligned with expectations, investors hoped for better news.
Comments from Fed Chair Powell that the Fed wasn’t “in a hurry” to cut rates were a bit unexpected, which put stocks under more pressure.4,5
Stocks dropped again on Friday as strong October retail sales seemed to reinforce Powell’s comments about Fed rate adjustments. News that Boston Fed President Susan Collins expressed doubts about what the Fed might do in December, putting further pressure on stocks.6
Tug-O-War
The inflation data that came in last week—retail and wholesale—show that the path to the Fed’s stated goal of 2 percent inflation may prove bumpy.
For the past couple of years, inflation has been the focus of the Fed’s efforts to manage rising prices by tightening the money supply. Ironically, strong retail sales numbers—while a sign of a strong economy—send a mixed message to investors. Confident consumers tend to spend money, which may take some pressure off the Fed as it looks to manage economic activity.
THIS WEEK: KEY ECONOMIC DATA
Monday: Fed Official Austan Goolsbee speaks. Housing Market Index.
Tuesday: Housing Starts and Permits.
Wednesday: Treasury Buyback Announcement.
Thursday: Existing Home Sales. Weekly Jobless Claims. Fed Official Beth Hammack speaks.
Friday: Consumer Sentiment.
THIS WEEK: COMPANIES REPORTING EARNINGS
Tuesday: Walmart Inc. (WMT), Lowe’s Companies, Inc. (LOW), Medtronic (MDT)
Wednesday: NVIDIA Corporation (NVDA), The TJX Companies, Inc. (TJX), Palo Alto Networks, Inc. (PANW), Target Corporation (TGT)
Thursday: Intuit Inc. (INTU), Deere & Company (DE)
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1. The Wall Street Journal, November 15, 2024
2. Investing.com, November 15, 2024
3. CNBC.com, November 12, 2024
4. The Wall Street Journal, November 13, 2024
5. The Wall Street Journal, November 14, 2024
6. CNBC.com, November 15, 2024