Notes Along the Path: Weekly Market Update vol.1.10

Gordon Achtermann |

Market Recap


The S&P 500 stretched its winning streak to the seventh week, as the Federal Reserve held its monetary policy steady and indicated rate cuts for next year.

The benchmark equity index ended Friday's session at 4,719.19, up from last week's close of 4,604.37, marking its longest winning streak since 2017. All sectors notched solid gains for the week, led by real estate's 5.3% surge as mortgage applications continued their upward trend. 30-year fixed interest rates on conforming loan balances fell to their lowest level since July, hitting 6.95% - down from 7.79% in less than 3 months.

Materials jumped 4%, while communication services saw the only drop for the week, down 0.1%.

The Federal Open Market Committee kept its benchmark lending rate unchanged at 5.25% to 5.5% -- the third consecutive pause -- and lowered its median rate and inflation expectations through 2025. In a bid to tame inflation, the FOMC started increasing rates in March 2022, with its last hike coming this July.

The federal funds rate is likely "at or near its peak," though it is too soon to declare victory, Fed Chair Jerome Powell said Wednesday following the FOMC meeting. New York Fed President John Williams told CNBC Friday that policymakers "aren't really talking about rate cuts right now."

The next FOMC meeting is scheduled for Jan. 30-31.

Official data released during the week showed consumer inflation unexpectedly edged higher sequentially in November, while price growth eased on an annual basis. Producer prices were flat month over month in November, and annual wholesale costs ticked up less than projected. November retail sales unexpectedly increased, while industrial production rebounded.

Industrials, consumer discretionary, and financials gained more than 3% each for the week. Technology advanced 2.5% despite a 9.1% plunge in Oracle (ORCL) and a 4.2% drop in Adobe (ADBE). Oracle's fiscal Q2 revenue fell short of Wall Street's expectations, while Adobe's annual sales outlook missed market estimates.

Energy was up 2.4%. Global demand for oil is continuing to slow, the International Energy Agency said Thursday, a day after the Organization of the Petroleum Exporting Countries left its oil consumption forecasts unchanged.

Consumer staples rose 1.6%, while health care added 1.5% despite a 7.5% slump in Pfizer (PFE) as the drugmaker issued a downbeat full-year earnings outlook.

In communication services, Warner Bros. Discovery (WBD) jumped 6.9% for the week as it announced the availability of the ad-free tier of Max on Alphabet's (GOOGGOOGL) YouTube Primetime Channels in the US.

Next week's economic calendar will feature the third and final official reading on Q3 growth, consumer confidence survey results. and November housing reports.

Provided by MT Newswires