Presented by Nicholas Wealth Management
November 15th, 2022
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This Week on Wall Street
Lower than expected October Producer Price Index (PPI) report released today sent markets higher.
Last Week on Wall Street
A cooling inflation number ignited a powerful rally on Thursday, sending stocks to strong gains for the week.
The Dow Jones Industrial Average gained 4.15%, while the Standard & Poor’s 500 added 5.90%. The Nasdaq Composite index rose 8.10% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, picked up 5.72%.1,2,3
Stocks Surge
A lower-than-expected inflation report triggered the biggest one-day stock market gain in more than two years as the news raised investors’ hopes that the Fed might consider easing the pace of future rate hikes. The day’s gains were pronounced in the hard-hit technology sector, as the tech-heavy Nasdaq added 7.35%.4
Stocks initially rallied to start the week but gave up some of the gains on Wednesday following a muddy and indecisive outcome to the midterms. Friday saw stocks build on their gains to close out an exceptional week.
Inflation Moderates
Consumer prices rose slower in October, increasing 0.4% for the month and 7.7% from 12 months ago. Both numbers were below market expectations of 0.6% and 7.9%. The core CPI (excludes energy and food sectors) rose a more modest 0.3% on a monthly basis and 6.3% from a year ago.5
The deceleration in prices was mainly attributable to price declines in used cars (-2.4%), apparel (-0.7%), and medical care services (-0.6%). Despite the progress, inflation remains well above the Fed’s 2% target rate. A look behind the numbers shows that October’s 7.7% CPI was fueled by the largest monthly jump in shelter costs since 1990 (+0.8%). Shelter costs account for one-third of the CPI. Energy was up 1.8%, while food costs rose 0.6% for the month.6 Â
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The Week Ahead: Key Economic Data
Tuesday: Producer Price Index (PPI).
Wednesday: Retail Sales. Industrial Production.
Thursday: Housing Starts. Jobless Claims.
Friday: Existing Home Sales. Index of Leading Economic Indicators.
Source: Econoday, November 11, 2022
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.
Tip of the Week
Retiring in the near future? A monthly retirement budget is a good idea – and so is a current budget that establishes a schedule for paying down debts and reducing costs before you enter into a new phase of life.
CITATIONS:
- The Wall Street Journal, November 11, 2022
- The Wall Street Journal, November 11, 2022
- The Wall Street Journal, November 11, 2022
- CNBC, November 10, 2022
- CNBC, November 10, 2022
- CNBC, November 10, 2022
Please consult your financial professional for additional information.
This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG is not affiliated with the named representative, financial professional, Registered Investment Advisor, Broker-Dealer, nor state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security.
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