Weekly Market Update for November 29, 2024
by Jared Plotz, Director of Research
It was a chilly morning to return to the office after hunkering down inside for Thanksgiving dinner and some football yesterday. But while the wind chill here in Minneapolis makes it feel close to zero degrees, the markets remain warm. Equities drifted higher during this holiday-shortened trading week. The S&P 500 and the Nasdaq both rose by +1.1%. Likewise on the fixed income front, falling interest rates – the 10-Year Treasury fell -22 bps to 4.19% – boosted security values on the week and for the month. This caps off what has been the best month of the year for the major equity indices. During November, the S&P 500 increased +5.7% and the Nasdaq +6.2%.
Turning to the economy, completed new home sales declined worse than expected in October, but pending home sales were on the rise. This type of dynamic has not been uncommon amidst a period of bouncing interest rates. Durable goods orders were a touch light, while personal consumption expenditures (the Fed’s preferred inflation gauge) rose by 2.3% y/y, up from a 2.1% rate in September. The early read on holiday retail sales has been positive. Data from Salesforce showed that online sales growth was tracking at a faster pace this year than last. And Adobe Analytics reported an 8.8% rise in Thanksgiving-Day shopping versus a year ago. We should have a more robust read of the start to the holiday season by next Friday.
Tariffs were the big story this week after the incoming presidential administration suggested they will impose an additional 10% tariff on goods from China and 25% tariffs on Mexico and Canada next year. It is unclear whether such tariffs would violate current trade agreements between the countries. However, concerns related to the tariff headlines began easing on Wednesday after the incoming administration held conversations with leaders from Canada & Mexico. The investment community largely interpreted the announcements as hardline negotiating rhetoric.
Next week brings more manufacturing data early in the week and the big employment report for November on Friday. The latter could be a deciding factor of whether, or by how much, the Federal Reserve will cut their benchmark rate when they meet the week before Christmas. Currently, investors expect another 25 bps (quarter-point) reduction. We hope your Thanksgiving included time with some of the people that matter most. Have a nice weekend!
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