SPY
S&P 500
Last Week: 2.31%
YTD: 19.20%
1 Year: 16.16%
YTD: 19.20%
1 Year: 16.16%
DIA
Dow Jones Industrial Average
Last Week: 2.08%
YTD: 7.34%
1 Year: 6.27%
YTD: 7.34%
1 Year: 6.27%
ONEQ
NASDAQ
Last Week: 2.48%
YTD: 36.90%
1 Year: 28.54%
YTD: 36.90%
1 Year: 28.54%
Russell 2000
Last Week: 5.43%
YTD: 3.40%
1 Year: -.78%
YTD: 3.40%
1 Year: -.78%
Large Growth
YTD: 26.08%
1 Year: 19.94%
*As of 10/31/2023
Large Value
YTD: .56%
1 Year: 2.86%
*As of 10/31/2023
Inflation
The Consumer Price Index, which is a measure we use to track inflation, was flat in October. It was below expectations but 3.2% above October 2022 levels. Inflation is still averaging 4%, which the Fed has stated they are hopeful to get back to 2%, our traditional average inflation rate in the US. After the inflation data was reported, the stock markets spiked, a possible sign the market is starting to price in future interest rate decreases.
Consumer Spending
US shoppers pulled back their spending in October. Retail sales, excluding auto and gas, fell .08%, and core retail sales, which removes restaurants, declined .03%. This was also good news on the inflation front. Year over year, overall retail and core retail sales are up 2.6%. Retail sales will be closely watched as we enter an important holiday season for retail sales and consumer household spending.
Wholesale Prices
The producer price index, which measures the final demand cost for businesses, declined 0.5%. This was well beyond the 0.1% expectation for the month. This was the largest decrease since April 2020. On a yearly basis, PPI increased 1.3%, also down considerably from September’s increase of 2.2%. A decline in the price of goods will be a much-welcome change before grocery shopping for Thanksgiving.
US Stock Markets
Markets reacted very favorably to the inflation, wholesale price, and retail data last week. Some economists are predicting a whole rate point decrease by the end of 2024. This seems optimistic, so do not hold your breath. The Fed is sticking to their word as they navigate the red-hot inflation post Covid-19 pandemic and getting inflation back down to 2%. While they still have work to do, the markets have rallied each time we have seen decreasing inflation data. Even though inflation is not back to 2% at this time, if there is progress, the markets will likely see that as a positive sign.
