Good morning, traders!
We hope everyone had an amazing Thanksgiving celebration. Today, the S&P 500 ($SPY) is trading near Friday’s close. Let’s get into it…
The stock market has shown a relatively stable performance recently, with only slight changes in major indexes. The S&P 500 fell marginally by 0.2%, and the Nasdaq Composite dropped just over 0.1%. The Dow Jones Industrial Average also experienced a minor decrease, shedding 66 points, equivalent to 0.2%. This stability comes after a period of growth, where Wall Street witnessed four consecutive weeks of gains across all three major averages. The positive trend has been partly attributed to a retreat in the 10-year Treasury yield from its high point in late October.
Despite concerns from some U.S. retailers about weakening consumer spending, e-commerce has seen a boost. Black Friday online spending increased by 7.5% compared to the previous year. This uptick in digital commerce was evident on Cyber Monday, with notable gains in the stocks of Amazon and Shopify, which rose 1.3% and 4%, respectively. However, the overall weak spending data might indicate that the Federal Reserve’s rate hikes are beginning to impact the broader economy.
According to Torsten Slok of Apollo Global Management, the Federal Reserve’s rate increases are making it more challenging for consumers to borrow. This observation aligns with findings from the New York Fed’s household survey, which noted a record-high number of consumers reporting difficulties in obtaining credit. Such trends are expected as higher interest rates typically lead to tighter credit conditions.
In the housing sector, sales of new single-family homes in October were slower than anticipated but still showed an improvement year-over-year. The Commerce Department reported a seasonally adjusted annual rate of 679,000 home sales, a 5.6% decline from September and below the forecasted 725,000. However, this figure represented a 17.7% increase from the same period in 2022. The median sales price for new homes was reported at $409,300, with an average price of $487,000, and the available inventory equated to 7.8 months of supply. These indicators provide insight into the current state of the housing market and its relation to the broader economy.
Monday Economic Events:
New Home Sales 10:00am ET – High Volatility Expected
Dallas Fed Mfg Survey 10:30am ET
2-YR Note Auction 1:00pm ET
5-YR Note Auction 1:00pm ET
Fed Speaker Scheduled:
No Fed Speakers Scheduled
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