Weekly Market Recap – November 3, 2023
U.S. stock indexes rebounded with their best weekly gains for 2023, reversing their trajectory just one week after the S&P 500 and the NASDAQ slipped into correction territory due to recent declines. The NASDAQ saw a remarkable surge of 6.6%, the S&P 500 gained 5.9%, and the Dow rose by 5.1%.
The bond market experienced significant shifts driven by changes in the U.S. interest-rate outlook. Yields on U.S. Treasuries declined, interrupting a seven-month trend of steadily rising yields. The yield of the 10-year U.S. Treasury bond retreated to 4.52% by the end of the week, down from the 4.83% level of the previous week. Both 2-year and 10-year yields dropped significantly below their previous approximately 5.00% levels.
Stocks received a boost following the release of the jobs report on Friday, which revealed a slowdown in the labor market. This could potentially influence the U.S. Federal Reserve to be less inclined to raise interest rates in the short term. In October, the economy added 150,000 new jobs, a significant decrease from the previous month and the 12-month average of 258,000. The unemployment rate for October inched up to 3.9%.
The U.S. Federal Reserve chose to maintain interest rates at the highest level since 2001 without ruling out the possibility of considering another rate hike at its mid-December meeting. The central bank has now kept rates steady for two consecutive meetings, marking the longest period without an increase since it began raising rates from nearly zero in March 2022.
In October, U.S. stock indexes experienced their third consecutive monthly decline, with the Dow slipping by 1.4%, the S&P 500 by 2.2%, and the NASDAQ by 2.8%. These results marked the first three-month losing streak for stocks since early 2020, and the S&P 500 closed on October 31, standing 8.6% below its year-to-date peak reached on July 31.
It’s worth noting that without the strong performance of a select group of seven large, technology-focused U.S. companies, the S&P 500’s year-to-date return through October would only be marginally positive. The S&P 500’s total return as of October 31 was 10.69%, including this group of seven companies. However, excluding them, the index’s return was a mere 0.03%, according to S&P Dow Jones Indices.
The Russell 2000 Index, a benchmark for U.S. small-cap stocks, exhibited a nearly 8% surge for the week, outpacing the substantial gains of its large-cap counterparts. This impressive rally brought the Russell 2000 Index into slightly positive territory year-to-date, just one week after it had fallen to its lowest level in nearly three years.
During this week of robust stock market gains, the Cboe Volatility Index, which measures investors’ expectations of short-term market volatility, experienced a sharp 30% decline, reaching its lowest level in a month and a half.
Major U.S. Economic Reports
|Treasury releases borrowing estimates||Q4|
|Employment cost index||Q3||1.1%||1.0%|
|S&P Case-Shiller home price index (20 cities)||Aug||1.0%||0.8%|
|Chicago Business Barometer (PMI)||Oct||44.0||44.1|
|Treasury quarterly refunding statement||Q4|
|S&P U.S. manufacturing PMI||Oct||50.0||50.0|
|U.S. job openings||Sep||9.6 million||9.5 million|
|Initial jobless claims||Oct 28||217,000||212,000|
|U.S. unit-labor costs||Q3||-0.8%||3.2%|
|U.S. nonfarm payrolls||Oct||150,000||297,000|
|U.S. unemployment rate||Oct||3.9%||3.8%|
|U.S. hourly wages||Oct||0.2%||0.3%|
|Hourly wages year over year||4.1%||4.3%|
|S&P U.S. services PMI||Oct||50.7||50.9|
Closing Prices for the Week
|Dow Jones Industrials Average||34,061.32|
|S&P 500 Index||4,358.34|
|CBOE Volatility Index||14.91|
|U.S. Dollar Index||105.021|
|10-Year T-Note (Dec ’23)||108-115|
|Crude Oil WTI (Dec ’23)||80.51|
|Natural Gas (Dec ’23)||3.515|
|Gold (Dec ’23)||1,999.2|
|Silver (Dec ’23)||23.285|
|Corn (Dec ’23)||477-2|
|Wheat (Dec ’23)||572-4|
|Soybean (Jan ’24)||1351-6|
|Coffee (Dec ’23)||170.90|
|Sugar #11 (Mar ’24)||27.77|
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