Weekly Market Commentary

November 18, 2024

The Markets

The United States stock market changed course.

Last week, the strength of the United States economy slowed investors’ roll. Federal Reserve (Fed) Chair Jerome Powell told business leaders in Dallas, Texas, that the performance of the United States economy has been “remarkably good,” better than any major economy in the world, which gives the Fed “the ability to approach our decisions carefully.”

Powell’s comments caused investors to reassess the likely pace of rate cuts. As they did, the probability of a December rate cut fell sharply, according to the CME FedWatch Tool.

The likelihood that the Fed may lower rates more slowly than expected roiled markets. Lu Wang, Isabelle Lee, and Emily Graffeo of Bloomberg reported, “With the world’s most important central banker in no hurry to ease monetary policy thanks to a still-robust labor market and strong economic data, bond yields once again rose and dragged stocks lower in their wake. Down 2 [percent] over five sessions, the S&P 500 erased half of its trough-to-peak gains since the election. Combined with losses in corporate credit and commodities, the week rounded out a pan-asset retreat that by one measure was the worst in 13 months.”

Investors’ changing outlook was shaped by other factors, too. These included:

• Elevated stock valuations. Bella Albrecht of Morningstar reported, “The U.S. stock market is trading at an 11 [percent] premium to its fair value estimate.” The data reflected share prices on November 13, which was midway through last week.

• The risk of inflation rising again. Many economists believe the incoming administration’s spending and tax policies have the potential to reignite inflation, which could lead the Fed to reassess monetary policy.

• A disrupting cabinet nomination. Robert F. Kennedy Jr. to lead the Department of Health and Human Services rattled healthcare and consumer staples sectors of the market. “Shares of biotechnology and pharmaceutical companies fell, with the S&P 500 Pharmaceuticals index down about 2 [percent]. Shares of packaged food and beverage giants…also declined,” reported Samuel Indyk and Ludwig Burger of Reuters.

By the end of the week, major U.S. stock indices were down. U.S. bond markets continued to be wary of tariffs and inflation, lifting the yield on the benchmark 10-year U.S. Treasury to 4.5 percent. By week’s end, though, the 10-year Treasury yield had settled at 4.3 percent, reported Liz Capo McCormick of Bloomberg.

S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods. Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury; London Bullion Market Association. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

THANKSGIVING ABUNDANCE. Turkey, mashed potatoes, and cranberry sauce have been on the Thanksgiving table for a long time. In many homes, though, the holiday meal has evolved to include regional dishes, cultural treats, and family favorites. People who responded to a social media post asking about unique Thanksgiving dishes reported that their meals include:

·        Sliced tomatoes, cucumbers, olives, and onions with oil and vinegar,

·        Chorizo cornbread with jalapeños,

·        Sashimi and grilled salmon collar,

·        Cranberries, grapes, walnuts and whipped cream salad,

·        Quinoa with roasted delicata squash, kale, and pistachios,

·        Creamed pearl onions,

·        Spinach casserole,

·        Twice baked potatoes,

·        Shrimp and mirlitons (pear-shaped squash), and many other dishes.

Another reason Thanksgiving meals have evolved is dietary preferences. Some families include one or more vegetarian or vegan members, and others are eating less meat for health reasons.

Of course, grocery stores have played a significant role in the evolution of Thanksgiving dinner. “The average grocery store today has 300,000+ [items in stock], nearly eight times more than the average store of the 1970s,” reported Andy Nelson in Supermarket Perimeter. Having access to a wider variety of ingredients makes it possible to prepare holiday feasts that make your taste buds happy.

What is your family’s favorite Thanksgiving dish?

Weekly Focus – Think About It

“The first Thanksgiving meal in Plymouth probably had little in common with today’s traditional holiday spread. Although turkeys were indigenous, there’s no record of a big roasted bird at the feast. The Wampanoag brought deer and there would have been lots of local seafood (mussels, lobster, bass) plus the fruits of the pilgrim harvest, including pumpkin. No mashed potatoes, though. Potatoes had only recently been shipped back to Europe from South America.”

—Origins of Thanksgiving National Holiday, History.com