The S&P 500 (Index: SPX) gained nearly 1.2% over its previous week's close, ending the first full trading week of November 2023 at 4409.95.
In doing so, it continued reverting toward its mean and is now about a half percent below it.
In terms of the bigger picture, the move was accompanied by the reversal of the October 2023 spike in long term U.S. Treasury yields. Since they peaked on 27 October 2023, there has only been one day where they've increased, which came on Thursday, 9 November 2023, coinciding with the only decrease in stock prices over the period.
Here's the latest update for the dividend futures-based model's alternative future chart. Compared to last week's edition, we've extended the redzone forecast range through 15 November 2023to compensate for the effect of more recent volatility in stock prices.
The most interesting headlines of the week came on Thursday, 9 November 2023 and are related to a disappointing auction of 30-year U.S. Treasuries that was apparently handicapped by the hacking of a Chinese bank, whose absence from participation briefly caused long term interest rates to rise that day. Follow the links below to find out more, although that's just one of several themes recorded in the week's market moving headlines.
- Monday, 6 November 2023
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- Signs and portents for the U.S. economy:
- Fed minions claim they're not responsible for October surge in long-term interest rates, think they might hike rates more, see tighter credit:
- Fed's Cook says rising yields not tied to monetary policy outlook
- Fed's Neel Kashkari not convinced rate hikes are over -WSJ
- Fed report shows US loan officers see tighter credit, weaker demand
- Mixed economic signs in China:
- China's trade slump likely eased further in October - Reuters poll
- Exclusive-China's clashing priorities behind rare money market distress
- Chinese government claims made without supporting data:
- Other signs of bigger trouble developing in Asia:
- Japan service activity posts slowest growth this year - PMI
- Indonesia's Q3 GDP growth weakest in 2 years, exports slump further
- BOJ minions say they are making progress in fighting inflation, will keep never-ending stimulus alive:
- BOJ chief sees progress towards hitting price goal, warns of uncertainty
- BOJ members saw no need for new yield control tweaks -Sept minutes
- Bigger trouble developing in the Eurozone:
- ECB minions thinking about hiking rates again after getting results they wanted:
- Nasdaq, S&P, Dow end marginally higher after posting their best week of 2023
- Tuesday, 7 November 2023
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- Fed minions say they're putting inflation where they want it, think GDP growth may be too hot, starting to get excited about chance for more rate hikes:
- Fed is making progress on inflation, Goolsbee says
- Fed's Waller: Q3 GDP a "blowout" number that warrants watching
- Fed's Bowman says she expects further policy tightening will be needed
- Fed's Logan: watching if financial conditions tight enough
- Signs of stimulus finally getting traction in China:
- Bigger trouble developing in the Eurozone, even ECB minions notice, ready to stand by:
- German industrial output falls further than forecast in September
- Eurozone economy to contract or stagnate in Q4, ECB's De Guindos says
- ECB must be 'vigilant' as inflation may surprise, Nagel says
- S&P 500, Nasdaq score longest win streak in 2 years on rates view
- Wednesday, 8 November 2023
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- Signs and portents for the U.S. economy:
- Fed minions not happy with geopolitics, claim they are more strategic than ever before:
- Fed's Cook says geopolitical tensions could change US economic outlook
- Fed's Williams says US central bank's policymaking now more strategic
- BOJ minions thinking about ending never-ending stimulus sooner:
- ECB minions told what they need to do, see Eurozone consumers as a new problem:
- ECB must keep rates at or near 4% through 2024 to get inflation down -IMF
- Euro zone consumers raise inflation expectations in headache for ECB
- ECB's Makhlouf says new risks emerging as others fade
- ECB policymakers keen to cool euphoria over inflation drop
- Nasdaq, S&P, Dow end mixed as November rally takes a beat; Disney results in focus
- Thursday, 9 November 2023
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- Signs and portents for the U.S. economy:
- Fed minions say they would exploit uncertainty, see repos drop below $1 trillion for first time since 2021:
- Fed's Jefferson: high uncertainty could justify aggressive policy
- Fed reverse repos fall under $1 trillion for first time since August 2021
- Chief Fed minion doubles down on higher for longer short term interest rates:
- Fed's Powell: biggest mistake would be to fail to control inflation
- Fed's Powell: "Not confident" policy is tight enough, supply-side help may be finished
- Bigger trouble developing in China:
- BOJ minions thinking about ending never-ending stimulus as early as January 2024:
- BOJ may end negative rates in January, ex-central bank executive says
- BOJ's Ueda says will tread carefully in exiting easy policy
- BOJ debated groundwork for future easy-policy exit at Oct meeting
- BOJ, Japan Inc need to prepare for 'life with interest rates', lobby head says
- ECB minions say they want smaller balance sheet, but not too much smaller; also say too soon to talk rate cuts:
- https://www.reuters.com/article/ecb-policy-lane/ecb-balance-sheet-must-shrink-but-not-too-much-lane-idUSKBN3240LG
- ECB still sees inflation risks so rate cut talk too early - vice president
- Nasdaq, S&P, Dow slip as hawkish Powell, disappointing 30-year auction stops market rally
- Friday, 10 November 2023
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- Signs and portents for the U.S. economy:
- Fed minions try to keep threat of more rate hikes alive:
- Bigger stimulus developing in China, Japan:
- China can raise 2024 budget deficit ratio to spur growth - central bank adviser
- Japan to top up fiscal loans, investments to boost supply chain -draft
- Nasdaq, S&P, Dow rise as yields stabilize; Wall Street set for back-to-back weekly gains
The CME Group's FedWatch Tool's projections now anticipates the Fed will hold the Federal Funds Rate steady in a target range of 5.25-5.50% into mid-June (2024-Q2). Starting from 12 June (2024-Q2), investors expect deteriorating economic conditions will force the Fed to start a series of quarter point rate cuts at six-to-twelve-week intervals through the end of 2024, which is six weeks later than expected a week ago.
The Atlanta Fed's GDPNow tool's estimate of real GDP growth for the current quarter of 2023-Q4 bounced up to +2.1% from the +1.2% annualized growth it projected a week ago and back in the ballpark of where it was two weeks ago.
Image credit: Bing Image Creator. Prompt: "A digital art concept illustrating rising stock prices and falling bond yields. 4k." 10 November 2023.