US Markets
Monday, November 27th, 2023 3:22 pm EDT
Key Points
- Market Performance: The article highlights that stocks experienced minimal changes on Monday, with the S&P 500 falling 0.2%, the Nasdaq Composite dropping more than 0.1%, and the Dow Jones Industrial Average shedding 66 points (0.2%). Despite this, Wall Street has been on a positive streak for four consecutive weeks, following a rally that coincided with the retreat of the 10-year Treasury yield from the briefly touched 5% mark in late October.
- Consumer Spending and Federal Reserve’s Impact: The report emphasizes concerns about weakening consumer spending despite a 7.5% increase in Black Friday e-commerce spending compared to the previous year. The potential impact of the Federal Reserve’s rate hikes on the broader economy is discussed, with a focus on the New York Fed’s household survey indicating a record-high share of consumers finding it difficult to obtain credit. The chief economist advisor at Apollo Global Management, Torsten Slok, suggests that higher interest rates make it harder for consumers to borrow.
- Economic Indicators and Forecasts: The week ahead is described as busy for economic indicators and Federal Reserve commentary. Readings for consumer confidence and inflation are anticipated later in the week. Additionally, the article touches on the weaker-than-expected new home sales in October, the caution expressed by economist Mohamed El-Erian about excessive market optimism, and an upbeat outlook for Cyber Monday spending, as raised by Adobe Analytics. The dollar index is highlighted as heading for its worst month of 2023, with a 3.2% slide since November began. The article also mentions that top European fund manager Niall Gallagher is trimming holdings in Novo Nordisk’s stock due to its rich valuation. Lastly, it reports that Elliott Management plans to push for changes at Crown Castle, a wireless-tower operator, following its accumulation of a more than $2 billion stake.
On Monday, the stock market saw minimal changes as Wall Street aimed to extend its positive streak into a fifth consecutive week. The S&P 500 fell marginally by 0.2%, the Nasdaq Composite dropped slightly over 0.1%, and the Dow Jones Industrial Average shed 66 points, equivalent to 0.2%. Despite warnings from certain U.S. retailers about weakening consumer spending, the equity market experienced four straight weeks of gains, coinciding with a retreat in the 10-year Treasury yield from the briefly touched 5% mark in late October.
The robustness of the rally is noteworthy, especially considering concerns about a potential slowdown in consumer spending, although Black Friday e-commerce spending increased by 7.5% compared to the previous year. Some e-commerce stocks, including Amazon and Shopify, posted gains on Cyber Monday.
Weak spending data raises questions about the impact of the Federal Reserve’s rate hikes on the broader economy. The New York Fed’s household survey indicates that a record-high percentage of consumers find it much harder to obtain credit, aligning with predictions that higher interest rates would impede consumer borrowing.
Looking ahead, the week promises economic indicators and Federal Reserve commentary. Consumer confidence and inflation readings are scheduled for later in the week.
In terms of economic data, new home sales in October fell short of expectations, totaling a seasonally adjusted annual rate of 679,000, a 5.6% decline from September. The median sales price for a new home was $409,300, and the average was $487,000, with available inventory representing 7.8 months of supply.
Mohamed El-Erian, chief economic advisor at Allianz, expressed caution about excessive optimism in the market, highlighting potential headwinds, including overly optimistic global economic forecasts, reversing oil prices and bond yields, and the large amount of cash on the sidelines, which may not be sufficient to prevent a slowdown.
As Cyber Monday approached, Adobe Analytics raised its spending forecast, predicting shoppers would spend between $12 billion and $12.4 billion. The rosy outlook followed robust online holiday shopping over the Thanksgiving weekend, with Black Friday online spending exceeding predictions at $9.8 billion, a 7.5% YoY increase.
The dollar index is on track to post its largest monthly loss of 2023, sliding 3.2% since the beginning of November. This decline reflects a weakening U.S. dollar against a basket of foreign currencies.
GAM Investments’ Niall Gallagher announced a reduction in holdings of Novo Nordisk’s stock by half due to its rich valuation. Despite acknowledging Novo’s growth potential, he cited a price-to-earnings ratio of nearly 33 times forward earnings, compared to the health stock average of around 17.
On Cyber Monday, online retail stocks rose in premarket trading, with Amazon gaining 0.7%, Best Buy adding 0.2%, and Shopify rising 3.9%. However, Okta, the cybersecurity company, fell 1.1% after a downgrade from Jefferies following a security breach.
Elliott Management, with a stake exceeding $2 billion, plans to push for changes at Crown Castle, a wireless-tower operator. The investment firm aims to collaborate with the company to enhance its stock value.
These developments indicate the market’s resilience amid various economic and geopolitical uncertainties, with investors closely monitoring indicators and potential headwinds.
For the full original article on CNBC, please click here: https://www.cnbc.com/2023/11/26/stock-market-today-live-updates.html
