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11/27/23 Weekly Market Commentary

11/27/23 Weekly Market Commentary

November 27, 2023

What happened last week…         

Meeting minutes from the Federal Reserve’s last gathering on October 31-November 1 stated that monetary policy will need to be “kept sufficiently restrictive to return inflation to the Committee’s 2 percent objective over time.” According to the minutes, members of the Federal Open Market Committee (FOMC) “agreed that the Committee was in a position to proceed carefully and that policy decisions at every meeting would continue to be based on the totality of incoming information and its implications for the economic outlook as well as the balance of risks.” Furthermore, “Participants judged that the current stance of monetary policy was restrictive and was putting downward pressure on economic activity and inflation. In addition, they noted that financial conditions had tightened significantly in recent months.” The final FOMC meeting this year takes place on December 12-13 where, as of November 24, the CME FedWatch Tool gives a 95.5% probability that interest rates will remain at 5.25% to 5.50%. 


OpenAI CEO Sam Altman was rehired less than a week after being fired from his company after hundreds of employees threatened to resign and investors called for his reinstatement. Microsoft (MSFT), which has invested billions of dollars into the startup behind ChatGPT, was set to hire Altman to lead its own AI research department. Instead, Microsoft gave its support for Altman’s return and the appointment of a new board.


Existing home sales for October missed expectations (3.90 million) as it decreased to 3.79 million from the downwardly revised 3.95 million (from 3.96 million). It is the lowest reading since August 2010 (3.68 million) and the fifth straight monthly decline. Notably, mortgage applications increased to their highest level in six weeks thanks to a decline in mortgage rates. 


The following companies reported earnings last week: LOW, NVDA


What to expect this week…

On Monday, new home sales for October are expected to decrease to 721,000 from 759,000, which was the highest reading since February 2022 (773,000).


On Wednesday, the GDP growth rate (second estimate) for Q3 2023 is expected to increase to 5.0% from the first estimate of 4.9%, which is the highest reading since Q4 2021.


On Friday, the manufacturing PMI for November is expected to increase to 47.6 from 46.7, which was the twelfth straight contractionary reading (below 50).

Thanks for reading!

-The Rockline Team

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