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11/6/23 Weekly Market Commentary

11/6/23 Weekly Market Commentary

November 06, 2023

What happened last week...      

The Federal Open Market Committee (FOMC) made the unanimous decision to keep interest rates at 5.25% to 5.50%, as expected. It marks the second straight meeting rates were left unchanged. Fed Chairman Jerome Powell said, “A few months of good data are only the beginning of what it will take to build confidence that inflation is moving down sustainably toward our goal. The process of getting inflation sustainably down to 2% has a long way to go.” Powell said the committee has not yet made any decisions about future meetings and acknowledged, “The committee is not thinking about rate cuts right now at all.” The final FOMC meetings for 2023 are scheduled for December 12 and 13. According to the CME FedWatch Tool, as of November 3, there is a 95.4% probability that rates will remain unchanged at the next Fed meeting.

 

The U.S. Treasury Department announced that it will borrow $776 billion in the final three months of this year, down from $1.01 trillion in the prior quarter. The department also said it expects to borrow $816 billion in the first three months of 2024.

 

The ADP employment change missed expectations (130,000) but increased to 113,000 from 89,000. The unemployment rate landed higher than expectations (3.8%) as it increased to 3.9% from 3.8%. Nonfarm payrolls missed expectations (170,000) as it decreased to 150,000 from the downwardly revised 297,000 (from 336,000). Average hourly earnings month-over-month fell below expectations (0.3%) as it decreased to 0.2% from the upwardly revised 0.3% (from 0.2%).

 

The manufacturing PMI for October fell below expectations (49.0) as it decreased to 46.7 from 49.0, which was the highest reading in ten months. The current figure marks 12 straight readings in contraction territory (below 50). The non-manufacturing PMI for October missed expectations (53.0) as it decreased to 51.8 from 53.6, but it marked the tenth straight month of an expansionary reading.

 

According to FactSet, as of November 3, 81% of S&P 500 companies have reported earnings with 82% having a positive EPS surprise and 62% having a positive revenue surprise. The blendedearnings growth for the S&P 500 is 3.7%, which would be the first quarter of year-over-year growth since Q3 2022. The blended revenue for the index is 2.3%, which would be the 11th straight quarter of growth.

 

This week…

´╗┐´╗┐There is not much on the economic calendar this week. However, next week there will be a few key reports for measures of inflation that will be top of mind for US Economic outlook. This includes one of the most sought after reports which is the Consumer Price Index (CPI) numbers, due out on November 14th.


We hope you enjoyed our Rockline Update!


- The Rockline Team

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.