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.
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
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
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
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:
*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
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.
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
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).
Photo of the Week
Majestic caribou bull in front of Mount Denali, Alaska.
Footnotes and Sources
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
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