With 24 stock market trading days left for the year, we are in the homestretch for what has been a dismal 2022. This past week, equity markets gained during the Thanksgiving holiday shortened week. The S&P 500 was +1.6%, the Dow was +1.8%, and the NASDAQ was +0.7%. The 10-year U.S. Treasury note yield decreased to 3.702% at Friday’s close versus 3.818% the previous week.
The release of the minutes from the Federal Open Market Committee (FOMC) November meeting indicated that the committee was not done raising short-term interest rates, but that moderating the pace of the remaining increases could be warranted as the committee considers the impact of the cumulative tightening of monetary policy to date and the lags between monetary policy actions and the behavior of economic activity and inflation. The next FOMC meeting is scheduled for December 13th and 14th, and an increase of 0.50% in the Fed funds target rate is widely expected.
With 485 companies in the S&P 500 Index having reported third quarter earnings, we are almost complete for the reporting period. This week, nine companies in the S&P 500 Index are scheduled to report earnings. The current consensus expectation for the quarter is 4.3% earnings growth on 11.7% revenue growth. For CY2022 earnings growth is currently forecast at 5.8% on 11.4% revenue growth.
In our Dissecting Headlines section, we look at the remaining potential market catalysts for the year.
Financial Market Update
Dissecting Headlines: December Cometh
We enter December this week, but there is still a steady flow of economic data that could determine how the financial markets close for the year. The major event is the December FOMC meeting scheduled for December 13th and 14th. Leading up to the FOMC meeting, we have several data points on inflation and employment for the committee members to consider.
This week the October Personal Consumption Expenditures (PCE) Price Index is scheduled for Thursday. This is the Fed’s preferred inflation metric, so it is important to watch. Also this week, the November employment report is scheduled for Friday. While we have seen several layoff announcements over the past few weeks, we have yet to see a meaningful uptick in the unemployment rate. Prior to the FOMC meeting, we will also see inflation data with the November Producer Price Index (PPI) scheduled for December 9th and the November Consumer Price Index (CPI) scheduled for December 13th.
Post the FOMC meeting there is potentially little market moving information for the second half of December. Continued updates on the holiday shopping season should be a good gauge on the health of the consumer. November retail sales is scheduled for December 15th and the November PCE Price Index report is scheduled for December 23rd.
Want a printable version of this report? Click here: NovaPoint Weekly November 28, 2022
To learn more about these topics and our investment strategies, call us at 404-445-7885 or contact us here.
Do you understand your personal investment risk tolerance and the risk of your current portfolio? You can learn these by taking our Risk Analysis Questionnaire.