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Weekly Market Insights: Stock Are On A High For a Short Week

Weekly Market Insights: Stock Are On A High For a Short Week

November 27, 2023

Investor optimism towards stocks continued to remain strong during the past week. This was mainly fueled by the decrease in bond yields, despite the shortened trading week due to the holiday. The Dow Jones Industrial Average went up by 1.27%, while the Standard & Poor's 500 rose by 1.00%. The Nasdaq Composite index also showed an increase of 0.89% in the same period. However, the MSCI EAFE index, which monitors developed overseas stock markets, remained unchanged with a meagre increase of 0.03%.

Falling Yields Lift Stocks

During the week, the stock market looked to the bond market for guidance and reacted positively to a steady decrease in bond yields. The bond yields started dropping after a successful 20-year Treasury notes auction on Monday. The release of the minutes from the Federal Reserve's last meeting further boosted investor confidence, as it indicated a potential decrease in the number of rate hikes. Additionally, investors were encouraged by the earnings report of a leading AI-enabled chipmaker that exceeded analysts' expectations. This reinforced the idea that AI could have a positive impact on corporate profits. Despite a slight increase in bond yields on the last day of trading, stocks managed to maintain their gains for the week.

Fed Minutes

The Federal Open Market Committee released the minutes from its October 31–November 1 meeting last week, which shed light on its decision to not increase rates and its stance on the future direction of interest rates. The minutes showed that the committee members were concerned about inflation remaining persistent and possibly increasing. They also reinforced the message of several Fed officials, including Fed Chair Powell, that monetary policy needs to remain restrictive until they are confident that inflation will meet the Fed's target of two percent. Furthermore, they stated that any future rate decisions will be based on current economic data and gave no indication of a rate cut, which many analysts are predicting for 2024.

This Week: Key Economic Data

Monday: New Home Sales.

Tuesday: Consumer Confidence.

Wednesday: Gross Domestic Product (GDP).

Thursday: Personal Income and Outlays. Jobless Claims.

Friday: Institute for Supply Management (ISM) Manufacturing Index.

Source: Econoday, November 24, 2023
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.

This Week: Companies Reporting Earnings

Wednesday: Dollar Tree, Inc. (DLTR), Synopsys, Inc. (SNPS)

Thursday: Salesforce, Inc. (CRM), Marvell Technology, Inc. (MRVL), Dell Technologies, Inc. (DELL)

Source: Zacks, November 24, 2023
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.

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Food For Thought

"No rational argument will have a rational effect on a man who does not want to adopt a rational attitude"

– Karl Popper

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Tax Tip

Start a New Business Off on the Right Foot

If you are about to start a new business, it is important to know some essential tax tips that can help set you up for success. The Internal Revenue Service (IRS) offers the following recommendations for new business owners:
1. Choose the right business structure: The form of business you choose will determine which income tax return you need to file. The most common business structures include sole proprietorship, partnership, corporation, S corporation, and LLC.
2. Apply for an Employer Identification Number (EIN): An EIN is necessary for identifying your business. Most businesses require an EIN.

*This information is not intended to substitute for specific individualized tax advice. We suggest you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov4

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Healthy Living Tip 

Hydrate the Healthy Way

Trying to kick a soda habit, but are sick of water? There are lots of fun and healthy ways to make your water taste better to encourage yourself to drink more! Here are some easy ways to spice up your normal water:

Are you trying to break your soda addiction but find plain water boring? There are plenty of healthy and enjoyable ways to make water taste better, so you can drink more and stay hydrated. Here are some easy ideas to jazz up your drinking water:

• Add slices of fresh fruit, such as lemon, lime, or orange, to enhance the flavor of your water. Not only do these citrus fruits taste great, but they also provide many health benefits.
• Infuse your water with cucumber slices for a refreshing and spa-like experience, right at home.
• Use sugar-free and low-calorie water sweeteners if you have a sweet tooth but want to avoid sugary drinks like soda.
• Try sparkling water or seltzer if you miss the bubbles of soda. Most sparkling waters have few or no calories and keep you hydrated.

Remember to drink at least half of your body weight in ounces of water each day. What are some of your favorite ways to make water more exciting?

Tip adapted from Baton Rouge Clinic5

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Riddle of the Week

What do the letter T and an island have in common?

Last week’s riddle: A man tells you there are 12 seconds in a year. This sounds absurd, but in what sense is he correct? Answer: In one sense, there are just 12 “seconds” in a year – January 2nd, February 2nd, and so forth. In terms of how many seconds - as a unit of time - in a typical calendar year of 365 days, that's 31,536,000. (60 seconds per minute x 60 minutes per hour x 24 hours per day x 365 days).

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Photo of the Week

Majestic caribou bull in front of Mount Denali, Alaska.

 

Footnotes and Sources


1. The Wall Street Journal, November 24, 2023.

2. The Wall Street Journal, November 24, 2023.

3. The Wall Street Journal, November 24, 2023.

4. IRS.gov, July 19, 2023

5. Baton Rouge Clinic, July 19, 2023

Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.

The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.

The market indexes discussed are unmanaged, and generally, considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results.

The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the U.S. stock market. Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of technology and growth companies. The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves as a benchmark of the performance of major international equity markets, as represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general.

U.S. Treasury Notes are guaranteed by the federal government as to the timely payment of principal and interest. However, if you sell a Treasury Note prior to maturity, it may be worth more or less than the original price paid. Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.

International investments carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to a specific country, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility.

Please consult your financial professional for additional information.

This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG is not affiliated with the named representative, financial professional, Registered Investment Advisor, Broker-Dealer, nor state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security.

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