Last week, stock prices rose sharply as bond yields fell due to easing inflation and a slowing labor market. The Dow Jones Industrial Average climbed 5.07%, while the Standard & Poor's 500 surged 5.85%. The Nasdaq Composite index soared 6.61% higher for the week. The MSCI EAFE index, which tracks developed overseas stock markets, gained 3.12%.
Stocks started the week on a high note, recovering from the previous week's sell-off. The combination of the Federal Reserve's decision to maintain current rates and Chairman Powell's dovish comments, along with reassuring news from the Treasury on future bond sales, led to a third consecutive day of gains on Wednesday. Slight employment growth and weak manufacturing data also contributed to the market's positive momentum.
The rally continued on Thursday, driven in part by a sharp drop in bond yields resulting from substantial productivity gains and slower wage growth. On Friday, when the monthly employment report was weaker than expected, yields dropped even further and stocks continued to gain throughout the week.
Signs of Labor Cooling
The latest employment data has raised concerns about a slowdown in the labor market, which has been surprising economists for many months. The lower-than-expected growth in new private sector jobs in October, as reported by Automated Data Processing (ADP), showed a gain of 113,000 new jobs compared to the forecast of 130,000, while job openings remained unchanged. Additionally, initial and continuing jobless claims exceeded consensus estimates. The government's monthly employment report for October further confirmed the potentially cooling employment picture, as it revealed a slowdown in hiring with only 150,000 new jobs added compared to September's revised gain of 297,000. The unemployment rate also increased to 3.9%.
This Week: Key Economic Data
Thursday: Jobless Claims.
Source: Econoday, November 3, 2023
This Week: Companies Reporting Earnings
Tuesday:D.R. Horton, Inc. (DHI), Gilead Sciences, Inc. (GILD), Air Products and Chemicals, Inc. (APD)
Wednesday:Occidental Petroleum Corporation (OXY), The Walt Disney Company (DIS)
Thursday: Becton, Dickinson and Company, Inc. (BDX).
Source: Zacks, November 3, 2023
Food For Thought
"I don't trust people who don't love themselves and tell me ‘I love you.'"
– Maya Angelou
Is it Time for a Paycheck Checkup?
It is important to check your withholding status regularly, to ensure that your paycheck reflects the accurate taxes you should be paying. It's a good practice to do a paycheck checkup whenever there is a significant event in your life that may change your tax status, such as getting married, having a baby, getting divorced, starting a new job, or receiving a raise or promotion. In addition, you may need to adjust your withholding status for other reasons.
During your paycheck checkup, it's also advisable to review other factors that may affect your tax liability, such as how much you contribute to your health insurance or 401(k). These expenses can impact the amount of tax you owe.
Please note that this information is not intended to replace personalized tax advice. Therefore, we recommend that you consult with a qualified tax professional about your specific tax issues.
Tip adapted from IRS.gov6
Healthy Living Tip
5-Minute Core-Strengthening Workout
If you have limited time but still want to work on your core, you can do this circuit for just 5 minutes. The routine includes the following moves:
- 1-minute high plank: Keep your arms straight and hold your body up with your arms and a tight core while your hands are on the ground.
Tip adapted from Mind Body Green Movement7
Riddle of The Week
Einstein’s Riddle: A man meets a bear in a wasteland. Both are startled. The man runs north, and the bear runs west. Suddenly, the man aimed his gun south and shot the bear. What color was the bear?
Last week’s riddle: What 3 numbers can you add together and get the same result as when you multiply them? (All 3 numbers are whole and positive, and none are double-digit.) Answer: 1, 2, and 3. 1x2x3 = 6 and 1+2+3 = 6.
Photo of The Week
A young woman walks through Jantar Mantar astrological park in Jaipur Rajasthan, India.
Footnotes and Sources
2. The Wall Street Journal, November 3, 2023.
3. The Wall Street Journal, November 3, 2023.
4. CNBC, November 2, 2023.
5. The Wall Street Journal, November 3, 2023.
6. IRS.gov, May 30, 2023.
7. Mindbodygreen.com, July 19, 2023.
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Weekly Market Insights: Slowing Labor Market Cause Bond Yields to Fall
November 06, 2023