Financial markets experienced a historically strong November as the S&P 500 Index returning 8.9% for the month, the second-best November return dating back to 1980. Big tech led the way, reinstating the trend from the first half of 2023 and rebounding from a challenging third quarter. The S&P 500 is now up 19.7% on the year heading into December. The bond market rallied as well, with the 10-Year Treasury yield ending the week at 4.22%, down from a recent high of nearly 5% (bond prices move inversely to interest rates). (Source: John Hancock)
The November rally was fueled by favorable economic data that has led to increased investor conviction that the Fed is not only finished raising interest rates, but that rate cuts are on the horizon in 2024. Last week, it was reported that inflation based on the Fed's preferred inflation gauge, PCE, continued to moderate in November to an annual rate of 3.0%, only 1.0% above the Fed’s target level. Additionally, consumer spending rose at an annual rate of just 0.2%, the lowest level in five months. Despite third quarter GDP being revised upward to 5.2% from the original 4.9% estimate, a cooldown is expected when fourth quarter GDP data is reported in early 2024. (Source: The Wall Street Journal)
This week's focus will be squarely on the Friday jobs report after the unemployment rate ticked up to 3.9% last month after adding only 150,000, down from an average monthly gain of 258,000 over the previous 12 months.
UBER ADDED TO S&P - Uber, the ride-hailing and food delivery company that went public in 2019, will be added to the S&P 500 Index and Seap Air Corp will be removed. Uber shares rallied 5% on Friday on the news. Uber turned their food delivery service profitable and reduced costs over the past few years, generating $221 million in profit in the third quarter and over $1 billion in profit over the past year. (Source: CNBC)
ELON'S POTTY MOUTH - Speaking at the New York Times Dealbook Summit, Musk faced questions about his amplification of an antisemitic tweet and the subsequent advertiser boycott of the X (formerly Twitter) platform. Musk did not mince words by saying to boycotting advertisers, “If someone is going to blackmail me with advertising or money go (expletive) yourself." It was estimated that X will lose $75 million from the advertising boycott. (Source: Associated Press)
LOSING A LEGEND - Billionaire investor Charlie Munger, Warren Buffet's partner at Berkshire Hathaway, passed away at 99. Munger joined the firm in 1978 as vice chairman and helped build one of the most successful investment firms to ever exist. Munger's estimated net worth at the time of passing was $2.7 billion after donating at least $550 million to charity over his lifetime. (Source: The Wall Street Journal)
FLORIDA STATE SNUBBED - The final year of the four-team college football playoffs are set with Michigan, Texas, Washington, and Alabama. Florida State, who went 13-0 this year and won their conference championship over the weekend, was left out. They are the first undefeated power conference champion to miss out on the playoffs. Next year, the college football playoffs expand to 12 teams. (Source: CBS Sports)
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