Last week's economic data reinforced two key trends: inflation and consumer spending continue to moderate, providing the Federal Reserve continued justification to remain on the sideline from further rate hikes. Headline inflation (CPI) came in at 3.2% in October, down from 3.7% a year earlier, while retail sells fell modestly by -0.1%. Equity and bond markets reacted favorably, as all major equity indices gained more than 2% last week, including the S&P 500, the NASDAQ, and the Dow. Small-caps were the big winner, surging more than 5%. Within the bond market, the CPI report on Tuesday resulted in the largest daily decline in the 10-year Treasury rate in almost eight months, from 4.63% to 4.44%. (Source: The Wall Street Journal)
Newly elected House speaker Mike Johnson passed through Congress a stopgap spending bill to avoid a government shutdown, signed by President Biden on Thursday. Johnson needed to turn to Democrats for support as 95 Republicans voted against the deal. Johnson will be put to the test moving forward as he'll need to pass the remaining five of the 12 appropriations funding bills that make up the government budget through a narrow 221-213 Republican House majority. Johnson will need to act fast, as the deadlines for the next government shutdowns fall on January 19th and February 2nd. (Source: Forbes)
This week is light with economic data due to the Thanksgiving holiday. On the earnings front, tech giant Nvidia (NVDA) reports earnings along with retailers Lowe's (LOW), Best Buy (BBY), and Dick's Sporting Goods (DKS).
OpenAI LEADER OUSTED - Over the weekend it was reported that the board at OpenAI, the artificial intelligence company that kicked off the AI craze with the introduction of ChatGPT, ousted their CEO Sam Altman. Almost immediately, efforts began to reinstate Altman by large ChatGPT investors such as Microsoft, who put $13 billion into the company. Ultimately, those efforts fell short and Microsoft says they've hired Altman directly to lead their advance AI research efforts. (Source: The Wall Street Journal)
ESG OUTFLOWS - Investors flooded into ESG funds (environmental, social and governance) in 2020 and 2021, peaking at $22 billion in quarterly asset inflows in the first quarter of 2021. That trend is beginning to reverse, with ESG-focused funds facing outflows for the past four quarters, including outflows of $2.7 billion in the third quarter. (Source: The Wall Street Journal)
GEN Z WORKPLACE TAKEOVER - Generation X and Millennials are the largest cohorts in the current American workforce today, overtaking baby boomers in the early- and mid-2010s, respectively. Now, Gen Z is poised to surpass baby boomers in 2024 as they approach 20 million full time workers and more baby boomers retire. (Source: Glassdoor)
THANKSGIVING STATS - It is Thanksgiving this week, a tradition that dates back to 1621 and enshrined as a national holiday in 1863. Americans are estimated to spend $949 million on turkeys this year, with 40 million turkeys sold for the holiday. On average, Americans eat between 3,150 and 4,500 calories on Thanksgiving. (Source: Wallethub)
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