Weekly Market Bullets

for the week ending 11/3/2023

• US Equity Markets surged last as interest rates dropped sharply following the Fed meeting and economic data that significantly raised investor hopes that the Fed is done raising rates. The S&P 500 rallied 5.9% for the week to bring its gains for the year to 13.5%. The Nasdaq increased 6.6% for the week and is now up 28.8% for the year, while the Russell 2000 (small cap stocks) catapulted 7.6% higher for the week and is now basically flat for the year, down 0.03%.

• Global Equity Markets followed the US lead last week, further boosted by positive economic data out of Asia. Developed Markets were up 4.7% for the week and are now up 3.0% for the year. Emerging Markets rose 3.1% for the week but remain down 1.6% for the year.

• US Interest rates tumbled last week on slowing economic data that suggest the Fed can stop hiking rates. Payrolls for October were up 150K, well below expectations and down from 297K in September, while the Unemployment Rate ticked up to 3.9% from 3.8% in September. Measures of manufacturing activity continue to soften, and Consumer Confidence dropped from September. As a result, the yield on the benchmark US 10-Year Treasury dropped to 4.52% last week from 4.84% the prior week and over 5.0% earlier in October.

• Earnings reports for Q3 have come in better than expected, likely posting the first year-over-year growth in earnings since Q3 2022. With 81% of companies in the S&P 500 reporting thus far, 82% have beaten EPS estimates, which is above the 5-year average of 77%. For revenue, 62% of firms have beaten sales estimates, which is below the 5-year average of 68%. Earnings growth for Q3 is on track to be around 3.7%. Interestingly, for companies missing earnings expectations, the market is punishing them worse than any time since 2011, with the average decline of 5.2%, much worse than the 5-year average of -2.3%.

Market Data

for the week ending 11/3/2023