Week 46 in brief
North America
Indices on Wall Street edged higher on Friday after a choppy trading session but gains in the day could not offset losses earlier in the week, leaving the three major indices in weekly losses.
For the day, gains in defensive shares overshadowed energy declines, and investors shrugged off hawkish comments from Federal Reserve officials about interest rate hikes.
How did the major indices perform? On Friday:
- The Dow Jones Industrial Average rose 199.37 points, or 0.6%, to close at 33,745.69.
- The S&P 500 gained 18.78 points, or 0.5%, to finish at 3,965.34.
- The Nasdaq Composite edged up 1.1 points, or less than 0.1%, to end at 11,146.06.
For the week:
- The Dow slipped less than 0.1%,
- The S&P 500 shed 0.7%,
- The Nasdaq Composite fell 1.6%.
What drove the U.S. market?
- Defensive groups led the way among S&P 500 sectors, with utilities up 2%, real estate rising 1.3%, and healthcare 1.2% higher.
- The energy sector fell 0.9%, as oil prices dropped, stemming from concern about weakened demand in China and further increases to U.S. interest rates.
- In company news, shares of gay dating app Grindr skyrocketed about 214% in their market debut after the company completed its merger with a special-purpose acquisition company.
- Gap Inc shares rose 7.6% after the company beat Wall Street estimates for quarterly sales and profit.
- Shares of Live Nation Entertainment slumped 7.8% after The New York Times reported that the U.S. Justice Department was investigating whether the Ticketmaster parent had abused its power over the multibillion-dollar live music industry.
- Advancing issues outnumbered declining ones on the NYSE by a 1.54-to-1 ratio; on Nasdaq, a 1.13-to-1 ratio favored advancers.
- The S&P 500 posted 8 new 52-week highs and 3 new lows; the Nasdaq Composite recorded 62 new highs and 141 new lows.
- In the wake of the CPI report showing signs of the cost of living easing, Federal Reserve Bank of Saint Louis President James Bullard said in a speech Thursday that the Fed will need to increase interest rates further to bring down inflation. He showed a chart indicating that the central bank’s benchmark rate could rise between 5% and 7%.
How did the European markets perform?
- Stocks in Europe edged higher on Friday to end the week in gains following a broad-based rally led by retailers and automakers, while investors awaited minutes from the European Central Bank’s last policy meeting and kept an eye out for a slew of data due next week.
- The pan-European STOXX 600 index jumped 1.2% to log its best one-day performance in more than a week.
- The index has gained 5.1% so far in November and is on pace for its second straight month of gains, driven by several factors including better-than-expected earnings, despite lingering worries about a recession in the eurozone.
- Data this week showed inflation hovered at a record high in October. S&P Global’s eurozone flash composite Purchasing Managers’ Index (PMI) survey scheduled on Nov. 23 is expected to show activity falling further from October.
- The STOXX 600 index is down more than 11% this year as investors feared aggressive interest rate hikes by the European Central Bank (ECB) could deepen a recession in the eurozone already reeling from an energy crisis triggered by the Russia-Ukraine conflict.
- Three top policymakers said on Friday the ECB must raise interest rates high enough to dampen growth as it fights sky-high inflation and it could soon start running down its 5 trillion euro ($5.2 trillion) debt pile, even as some hint at slower rate hikes.
How did Asian markets perform?
- Major Asian stock markets ended Friday with losses amid concerns over hawkish remarks from US Federal Reserve officials and China’s zero-COVID approach.
- The Asia Dow, which includes blue-chip companies in the region, was the sole index to enjoy a rise on Friday and close at 3,167.03 points, up 0.29%. On a weekly basis, it was slightly down by 0.03%.
- Tokyo’s Nikkei 225 stock exchange fell 1.29% to 27,899.77, down 1.29% over the week.
- Japan’s annual consumer inflation rate rose to 3.7% in October, the highest since 1991, according to official data released on Friday.
- Bank of Japan Governor Haruhiko Kuroda pointed out the need to maintain an ultra-loose monetary policy in a bid to assist the economy following the hot inflation data.
- The Hang Seng, the benchmark for blue-chip stocks trading on the Hong Kong stock exchange, fell 0.29% to 17,992.5 points, while it had weekly gains of 3.85%.
- China’s Shanghai stock exchange decreased 0.58% from the previous close to 3,097.24 points on Friday, while it was up 0.32% on a weekly basis.
- The Indian Sensex benchmark dropped 0.14% to 61,663.48, while the Singapore benchmark index lost 0.42% to 3,272.23 points.
- While Singapore added 1.36% this week, the Sensex declined 0.21%.
Bonds and Commodities
- Treasury yields rose for a second day following hawkish comments on Thursday by St. Louis Fed President James Bullard, who said rates needed to rise to at least a range between 5% and 5.25% to be “sufficiently restrictive” to curb inflation.
- The two-year US Treasury note’s yield rose 7.7 basis points to 4.531%, much higher than the 10-year note, which was up 5 basis points at 3.823%.
- Oil fell about 2% and logged its second weekly decline, pressured by concern about weakening demand in China and further increases to U.S. interest rates.
- U.S. crude futures fell $1.56 to settle at $80.08 a barrel, while Brent settled down $2.16 at $87.62.
- U.S. gold futures settled 0.5% lower at $1,754.4 an ounce.
Currencies
- The euro fell 0.35% to $1.0324, having eased from a four-month peak of $1.0481 hit on Tuesday as some policymakers argued for caution on tightening.
- The yen weakened 0.15% versus the dollar at 140.41.
- Bitcoin fell 0.31% to $16,634.00.
Next week
Next week will be a holiday-shortened one in the U.S., with the Thanksgiving holiday on Thursday.
On Wednesday, investors can expect data on October new home sales, a PMI reading from S&P Global, and the final reading of the University of Michigan’s Consumer Sentiment Index (MCSI). Also, the Federal Reserve will release meeting minutes from the FOMC’s latest monetary policy meeting. Earnings reports this week will arrive from Dell Technologies, Zoom, Dollar Tree, HP, Baidu, Dick’s Sporting Goods, and Nordstrom, among others.
The day after Thanksgiving is Black Friday in the U.S., a day filled with shopping deals and discounts that typically marks the beginning of the holiday shopping season. Economists often view Black Friday shopping as a key bellwether for the retail sector and overall consumer confidence. Analysts project that stubbornly high inflation and ongoing supply chain bottlenecks could adversely affect consumers and retailers this holiday season, as consumer purchasing power has declined while stores grapple with higher costs and declining revenues.