What happened last week…
All three major indices finished November higher with performances as follows: DJIA (7.54%), S&P 500 (5.73%), NASDAQ (6.21%). The DJIA and the S&P 500 both achieved new record closing highs to end the week and each had their best month of 2024.
Meeting minutes were released from the November gathering, where the Federal Open Market Committee (FOMC) voted unanimously to lower interest rates by 25 basis points to a new range of 4.50% to 4.75%. According to the minutes, “In discussing the outlook for monetary policy, participants anticipated that if the data came in about as expected, with inflation continuing to move down sustainably to 2 percent and the economy remaining near maximum employment, it would likely be appropriate to move gradually toward a more neutral stance of policy over time.” The minutes also stated, “Almost all participants agreed that risks to achieving the Committee's employment and inflation goals remained roughly in balance. Some participants judged that downside risks to economic activity or the labor market had diminished.” The final FOMC meeting takes place December 17-18.
The GDP growth rate (second estimate) for Q3 2024 matched expectations as it remained at 2.8%, the same as the first estimate. The current reading is a decline from the Q2 2024 rate of 3.0%. The Q1 2024 rate of 1.6% was the lowest growth since the Covid pandemic.
New home sales for October missed expectations (730,000) as it decreased to 610,000 from 738,000, which had been the highest level since May 2023. The current reading is the lowest figure since October 2022 as mortgage rates increased and two hurricanes impacted sales.
Happening this week…
On Monday, the manufacturing PMI for November is expected to increase to 47.5 from 46.5, which marked the seventh straight contractionary reading (below 50) and the 23rd contraction in the past 24 months. It was the lowest reading since July 2023. On Wednesday, the non-manufacturing PMI for November is expected to decrease to 55.5 from 56.0, which was the fourth straight month of expansion and the highest reading since August 2022. The figure has expanded in 50 of the previous 53 months.
On Wednesday, the ADP employment change may decrease to 165,000 from 233,000, which was the highest reading since July 2023. On Friday, the unemployment rate is expected to remain at 4.1%, nonfarm payrolls are forecasted to increase to 183,000 from 12,000, and average hourly earnings month-over-month are expected to decrease to 0.3% from 0.4%.
Thanks for Reading
- The Rockline Team
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