Market Recap - MARKET MAINTAINS POSITIVE‐MINDED DISPOSITION

There Was One Less Trading Day This Week Because Of The Thanksgiving Day Holiday On Thursday And Trading Volume Was On The Lighter Side.

That didn't alter the stock market's prevailing disposition, however. It was another winning week for the major indices, which were supported by some generally broad‐based buying interest.

To be fair, the mega‐cap stocks led the show again. The Vanguard Mega‐Cap Growth ETF (MGK) gained 1.2% this week, yet the Invesco S&P 500 Equal‐Weight ETF (RSP) gained 1.0%.

Every S&P 500 sector finished higher. The best‐performing sectors were the health care (+2.2%), consumer staples (+1.4%), and communication services (+1.3%) sectors. The relative laggards were the energy (+0.3%), utilities (+0.6%), and information technology (+0.6%) sectors.

NVIDIA (NVDA) was a key story stock during the week. The AI chip giant reported its quarterly results after the close on Tuesday. They were blowout results yet again, but there was some chatter about investors being disappointed that the company lacked visibility into how the export curbs to China will ultimately impact its sales in coming quarters. On Thursday, Reuters reported that NVIDIA is going to be delaying its China AI chip.

In its defense, NVIDIA was ripe for a pullback on just about any news. It had rallied 25% from its October 26 low going into its report. One could also make a case, then, that its soft finish to the week might have been a case of selling on the news more than genuine disappointment about its sales visibility in China, especially since the company also said the affected sales from U.S. export curbs are being more than offset by growth in other regions.

Tellingly, NVIDIA's soft finish did not derail the broader market on Wednesday or Thursday. There was continued resilience to the idea that the stock market is overbought and due for a pullback. That resilience continued to feed a fear of missing out on further gains that propped up the indices along with the continued belief that the Fed is done raising rates.

That belief drowned out a view in the FOMC Minutes for the October 31‐November 1 meeting that suggested the Fed would raise rates again if it felt that was necessary. That wasn't anything the market hadn't heard already, so it was more of a headline talking point for the market than a market mover.

There was a batch of earnings results out of the retail space this week that moved plenty of individual stocks, including Dick's Sporting Goods (DKS), Nordstrom (JWN), Best Buy (BBY), Kohl's (KSS), Lowe's (LOW), Burlington Stores (BURL), and American Eagle Outfitters (AEO) to name a few. Collectively, the results were digested in a mostly positive manner. The SPDR S&P Retail ETF (XRT) gained 1.0% for the week.

The economic data this week had some mixed hues. Specifically, existing homes sales in October transpired at the slowest annual pace (3.79 million) since August 2010 while initial jobless claims for the week ending November 18 decreased by 24,000 to a surprisingly low 209,000.

For the week, the 2‐yr note yield increased five basis points to 4.95% and the 10‐yr note yield increased three basis points to 4.47%.

Next week will feature an important slate of economic data that includes October New Home Sales, November Consumer Confidence, the second estimate for Q3 GDP, October Personal Income and Spending, which will include the PCE Price Indexes, Initial Jobless Claims, and the November ISM Manufacturing Index.

In turn, the earnings calendar will feature some high‐profile earnings reporters, namely Zscaler (ZS), CrowdStrike (CRWD), Hewlett Packard Enterprise (HPE), Intuit (INTU), NetApp (NTAP), Workday (WDAY), Dollar Tree (DLTR), Foot Locker (FL), Five Below (FIVE), Okta (OKTA), PVH (PVH), Salesforce (CRM), and Snowflake (SNOW).

• Nasdaq Composite: +0.9% for the week / +36.2% YTD

• S&P 500: +1.0% for the week / +18.7% YTD

• Dow Jones Industrial Average: +1.3% for the week / +6.8% YTD

• S&P Midcap 400: ++0.9% for the week / +5.3% YTD

• Russell 2000: +0.5% for the week / +2.6% YTD

Market Recap - ANOTHER WINNING WEEK AFTER PLEASING BATCH OF DATA

It Was Another Winning Week For The Stock Market. The S&P 500, Which Flirted With 4,100 In Late October, Closed Above The 4,500 Level On Friday.

The positive bias was partially driven by a recognition that there wasn't a lot of selling activity after the big run, along with a fear of missing out on further gains during a seasonally strong time of year for the market. 

Mega cap stocks contributed to index performance, but the broader market experienced more robust buying interest.

The bulk of this week gains followed the October Consumer Price Index on Tuesday, which corroborated the notion that the Fed is done raising rates. That report, along with the October Producer Price Index, the October Retail Sales, the weekly initial jobless claims, and the October Housing Starts data, all seemed consistent with a soft landing scenario for the economy.

The fed funds futures market priced out the probability of any additional rate hikes by the Fed, and now sees a 61.7% probability of the first rate cut in May 2024, according to the CME FedWatch Tool.

Treasury yields took a sharp turn lower in response to the data and the idea that the Fed is done raising rates. The 2-yr note yield fell 15 basis points this week to 4.90%. The 10-yr note yield declined 19 basis points to 4.44%.

The rate-sensitive S&P 500 sectors registered some of the largest gains, but all 11 sectors traded higher this week. The real estate (+4.5%), financials (+3.3%), and utilities (+3.0%) sectors were standouts in that respect. The consumer staples (+0.6%) and energy (+0.9%) sectors were the only ones to gain less than 1.0%. 

Market participants were digesting another batch of earnings news. Walmart and Target headlined the calendar, both making mention of a more cautious-minded consumer. Still, Target registered a big gain after reporting results. Gap, Ross Stores, and Macy's were also standout winners after reporting earnings. 

Leading chip equipment maker Applied Materials also reported earnings and logged a decline following a Reuters report that it is the subject of a DOJ criminal probe over shipments to China's top chipmaker, SMIC.

In other news, Congress passed a continuing resolution to avoid a government shutdown, and President Biden and President Xi agreed to resume high-level, direct military talks, and bilateral cooperation in combating global illicit drug manufacturing and trafficking.

Looking ahead, markets will be closed on Thursday and close at 1:00 p.m. ET on Friday in observance of Thanksgiving. 

• Nasdaq Composite: +2.4% for the week / +35.0% YTD

• S&P 500: +2.2% for the week / +17.6% YTD

• Dow Jones Industrial Average: +1.9% for the week / +5.4% YTD

• S&P Midcap 400: +4.0% for the week / +4.4% YTD

• Russell 2000: +5.4% for the week / +2.1% YTD

Market Recap - MEGA CAPS SUPPORT INDEX GAINS AS RATES RISE

The Market Had A Decent Showing This Week On The Heels Of Last Week's Big Gains.

Market participants were digesting another heavy flow of earnings news, but that news was largely overshadowed by moves in the mega cap stocks.

The broader market showed nice resilience to selling efforts despite many participants thinking stocks are due for a pullback. The S&P 500 is now up 7.2% from its low close on October 27.

Small and mid cap stocks were an exception, relenting to some selling pressure this week. The Russell 2000 fell 3.2% and the S&P Mid Cap 400 declined 1.6%.

Six of the 11 S&P 500 sectors logged a gain this week. The heavily-weighed information technology (+4.8%) and communication services (+2.2%) sectors were the best performers followed by consumer discretionary (+0.9%). The energy (-3.8%), utilities (-2.6%), and real estate (-2.1%) sectors saw the biggest declines.

A jump in market rates following some Treasury auctions this week, along with commentary from Fed Chair Powell, slowed the rebound momentum for the broader market. The 2-yr note yield climbed 19 basis points this week to 5.05%. The 10-yr note yield rose seven basis points this week to 4.63%.

Sales of 3- and 10-yr notes on Tuesday and Wednesday, respectively, met okay enough demand for the stock market, but Thursday's 30-yr bond auction was met with dismal demand. 

There were several Fed officials speaking this week, but the market was mostly focused on Fed Chair Powell's IMF panel discussion on Thursday. Mr. Powell largely reiterated his remarks from November 1, saying "If it becomes appropriate to tighten policy further, we will not hesitate to do so."

• Nasdaq Composite: +2.4% for the week / +31.8% YTD

• S&P 500: +1.3% for the week / +15.0% YTD

• Dow Jones Industrial Average: +0.7% for the week / +3.4% YTD

• S&P Midcap 400: -1.6% for the week / +3.1% YTD

• Russell 2000: -3.2% for the week / +2.6% YTD

Market Recap - STOCKS RALLY ON SHARP DROP IN RATES

The Stock Market Registered Sizable Gains On The Heaviest Week Of Earnings Reporting For This Q3 Season.

The calendar featured results from Apple, which didn't live up to the market's high expectations and  languished following its report. Earnings news was generally met with a positive reaction, helped in large part by the significant drop in market rates.

The 10-yr note yield declined 31 basis points this week to 4.51% and the 2-yr note yield fell 17 basis points this week to 4.86%. Those moves were partially a reaction to the following factors:

• The Bank of Japan's tweak to its yield curve control policy was not as hawkish as feared, tempering concerns about the possibility of a destabilizing unwinding of carry trades.

• The Treasury reduced its Q4 borrowing estimate by $76 billion to $776 billion.

• The Treasury said its Q4 refunding would involve larger issuance and auction sizes for 2-, 3-, 5-, and 7-yr maturities than 10-, 20-, and 30-yr maturities.

• Short sellers covered their positions.

Another important factor driving activity in the Treasury market was the FOMC meeting. The committee voted unanimously to leave the target range for the fed funds rate unchanged at 5.25-5.50% and Fed Chair Powell's press conference was deemed less-hawkish than feared. Mr. Powell noted that the Fed has come very far with its rate-hike cycle and that policy decisions have gotten more two-sided. 

The Bank of England also left its key rate unchanged, although the vote was 6-3 with three voters favoring a 25 basis points rate hike.

Some of the key economic releases this week all worked in favor of the market's thinking that the Fed could be done raising rates. The ISM Manufacturing Index contracted at a faster pace in October (actual 46.7%; expected 49.0%; prior 49.0%), Q3 unit labor costs declined 0.8% on the back of the strongest productivity increase (4.7%) since the third quarter of 2020, and the October jobs report showed slower payroll growth, rising unemployment, and slower wage growth.

The fed funds futures market isn't pricing in any more rate hikes over the next 12-month horizon; in fact, it is pricing in at least two rate cuts over the next 12 months, according to the CME FedWatch Tool.

The sharp drop in rates acted as a springboard for stocks, aided by short-covering activity and a fear of missing out on further gains in a seasonally strong period for the market. Last week brought the S&P 500 into technical correction territory, but this week's rally brought the S&P 500 back above both its 200-day and 50-day moving averages.

The rate-sensitive real estate sector was the best performer, up 8.6%, followed by the financial (+7.4%), consumer discretionary (+7.2%), and information technology (+6.8%) sectors. The "worst" performing sector was energy, which still climbed 2.3% this week. 

The US dollar was weaker this week due to the thinking that the Fed might be done raising rates. The US Dollar Index fell 1.4% to 105.04.

• Nasdaq Composite: +6.6% for the week / +28.8% YTD

• S&P 500: +5.9% for the week / +13.5% YTD

• Dow Jones Industrial Average: +5.1% for the week / +2.8% YTD

• S&P Midcap 400: +6.5% for the week / +2.0% YTD

• Russell 2000: +7.6% for the week / -0.03% YTD

Market Recap - S&P 500 Closes the Week Below Key Technical Level

It Was A Tough Week For Stocks. At The Start Of The Week, The S&P 500 Slipped Below Its 200-Day Moving Average.

By the end of the week, the S&P 500 settled 10.3% lower than the July 31 closing high (i.e. a technical correction) and tested support near the 4,100 level. 

Many stocks participated in a broad retreat. Only one of the 11 S&P 500 sectors logged a gain -- utilities (+1.2%) -- while the communication services (-6.3%) and energy (-6.2%) sectors saw the largest declines.

Weakness in the communication services sector was driven by Alphabet, which logged a 9.8% decline on the week after an earnings report that contained some relatively disappointing growth for its cloud business, and Meta Platforms, which fell 3.9% following its earnings report. Microsoft and Amazon.com were met with positive reactions after reporting quarterly results. 

Participants were also digesting a slate of mostly better-than-expected earnings results from blue chip names. Verizon, Coca-Cola, Dow, RTX, General Electric, and 3M were among the standouts in that respect.

Geopolitical angst contributed to the overall negative bias throughout the week, but tensions peaked on Friday following reports that the US carried out airstrikes against Iranian backed targets in Syria. Separate reports indicated that Israel is expanding ground operations in Gaza. Participants learned about those developments right before the weekend when market's are closed for trading and investors can't react in real-time.

There was a heavy news flow this week in addition to the aforementioned headlines and earnings news. The headlines included Ford (F) and the UAW reaching a tentative agreement, the ECB leaving its corridor of key interest rates unchanged following ten consecutive rate increases, and a batch of economic data.

The economic calendar was highlighted by a whopping 4.9% real GDP growth in the third quarter and a September Personal Income and Spending report that failed to show a strong trend of disinflation. Those reports reflect ongoing strength in the economy and inflation that looks somewhat sticky, which is not likely to persuade the Fed to cut rates anytime soon.

Treasuries were better behaved this week, but that did not help stocks much. The 2-yr note yield declined six basis points to 5.03% and the 10-yr note yield fell seven basis points to 4.85%.

In other news, Rep. Mike Johnson (R-LA) was elected Speaker of the House after receiving unanimous Republican support. 

• Nasdaq Composite: -2.6% for the week / +20.8% YTD

• S&P 500: -2.5% for the week / +7.2% YTD

• Dow Jones Industrial Average: -2.1% for the week / -2.2% YTD

• S&P Midcap 400: -2.6% for the week / -4.3% YTD

• Russell 2000: -2.8% for the week / -7.1% YTD

Market Recap - INTEREST RATES ANGST AND GEOPOLITICAL UNCERTAINTY FUEL LOSING WEEK

Equities Experienced A Fairly Broad Retreat This Week.

The negative price action was mostly predicated on interest rates angst with some risk aversion related to the Israel-Hamas war piled on by Friday.  The uncertainty surrounding a potential ground invasion by Israeli forces into Gaza weighed on sentiment ahead of the weekend due to the understanding that participants cannot react in real-time while the markets are closed for trading.

Treasuries continued to act in a volatile manner that resulted in the 10-yr note yield crossing 5.00% at its high this week for the first time since 2007. Ultimately, the 10-yr yield jumped another 29 basis points this week to 4.92%. The 2-yr note yield rose four basis points this week to 5.09%. 

Volatility in the Treasury market was partially a reaction to Fed Chair Powell's speech at the Economic Club of New York on Thursday. His prepared remarks seemingly corroborated the popular view of late that the jump in long-term rates has helped to tighten financial conditions, paving the way for the Fed to proceed cautiously. In answering a question, though, Mr. Powell acknowledged that the economic evidence is not indicating that the Fed is too tight yet with its policy.

Another sticking point for the stock market was the ongoing dysfunction in the House of Representatives. Following three failed rounds of voting this week, Rep. Jim Jordan (R-OH) lost the status of Speaker of the House nominee after a GOP conference vote went against him by a "wide margin," according to Punchbowl News. The House will now head home for the weekend without another vote, according to CNBC.

Data this week painted a mixed picture of the economy. Retail sales were stronger than expected and weekly initial jobless claims hit their lowest level since January. Meanwhile, the existing home sales report was the weakest since October 2010 and the Leading Indicators index was negative for the 18th consecutive month. 

Earnings news was also somewhat mixed. Netflix and Tesla were among the standouts, along with  Dow components Travelers, Procter & Gamble, and American Express.

Only two of the S&P 500 sectors logged a gain this week -- consumer staples (+0.7%) and energy (+0.7%) -- while the real estate (-4.6%) and consumer discretionary (-4.4%) sectors saw the biggest declines.

• Nasdaq Composite: -3.2% for the week / +24.1% YTD

• S&P 500: -2.4% for the week / +10.0% YTD

• Dow Jones Industrial Average: -1.6% for the week / -0.1% YTD

• S&P Midcap 400: -2.0% for the week / -1.5% YTD

• Russell 2000: -2.3% for the week / -4.6% YTD

Market Recap - Stocks grapple with geopolitical uncertainty

Market Participants Entered The Week With News That Israel Declared War On Hamas After A Surprise Attack Launched By Hamas Last Weekend.

The potential for a wider regional clash weighed on sentiment this week, but reports so far give the impression that the Israel-Hamas war is still a two-party conflict. 

Geopolitical angst mounted on Friday following news that Israel warned 1.1 million residents in the northern Gaza Strip to evacuate within 24 hours, which is presumably a pretense to a ground attack in Gaza that will escalate the war. That created some nervousness in the market, which also heard Iran's foreign minister say that Israel's continued siege of Gaza "will face reactions in other areas."

The stock market still fared okay this week, aided by a decline in Treasury yields and some technical buying interest related to the idea that the market was oversold and due for a bounce. Gains were registered in the first half of the week, but buyer conviction fell by the wayside as it got closer to the weekend.

While this week's Producer Price Index and Consumer Price Index reports were not as friendly as investors envisioned, the 10-yr note still did well with the help of safe-haven flows and expectations that inflation rates will improve in coming months as higher rates work in slowing the economy. The 2-yr note yield fell one basis point this week to 5.05%, but the 10-yr note yield declined 15 basis points to 4.63%.

The Treasury market also weathered some relatively disappointing auction results this week for the 3-yr note, 10-yr note, and 30-yr bond. Each was met with relatively soft demand, which came to a head on Thursday following the 30-yr bond auction, prompting a noticeably back up in rates. When geopolitical angst picked up on Friday, however, a rush of safe-haven flows repaired a lot of the weakness following Thursday's sell off. 

Treasuries were also digesting comments from several Fed officials this week who spoke to the idea that the rise in long term rates had tightened financial conditions and may give them leeway to precede carefully on the policy rate.

Oil prices climbed this week in another manifestation of geopolitical worries. WTI crude oil futures jumped 6.0% to $87.80/bbl.

Eight of the S&P 500 sectors registered a gain with energy (+4.5%) leading by a wide margin. The consumer discretionary sector (-0.7%) saw the largest decline.

Earnings season kicked off this week with generally good results, highlighted by JPMorgan Chase, Wells Fargo, Citigroup, and UnitedHealth.

In other news, the House failed to elect a new Speaker this week. Rep. Steve Scalise (R-LA) prevailed in the GOP conference vote, but withdrew his name after failing to get enough support. This leadership void is a reminder that the House can't conduct business, which raises the uncertainty about Congress reaching a budget agreement before the Nov. 17 deadline. 

• Nasdaq Composite: -0.2% for the week / +28.1% YTD

• S&P 500: +0.5% for the week / +12.7% YTD

• Dow Jones Industrial Average: +0.8% for the week / +1.6% YTD

• S&P Midcap 400: -0.5% for the week / +0.5% YTD

• Russell 2000: -1.5% for the week / -2.4% YTD

Market Recap - FIRST WEEK OF THE NEW MONTH BRINGS MIXED ACTION

The First Week Of The New Month Brought Somewhat Mixed Action For The Stock Market.

The S&P 500 (+0.5%) and Nasdaq Composite (+1.6%) registered gains while the Dow Jones Industrial Average (-0.2%) and Russell 2000 (-2.2%) declined. 

Eight of the 11 S&P 500 sectors closed in the red this week. The energy (-5.4%), consumer staples (-3.1%), and utilities (-2.9%) sectors saw the steepest declines while the heavily-weighted information technology (+3.1%) and communication services (+2.9%) sectors closed with the biggest gains. 

The energy sector fell alongside WTI crude oil futures, which declined 8.8% to $83.04/bbl. That weakness was partially attributed to concerns about weakening demand in a slower growth environment influenced by higher interest rates, but oil prices had a big run coming into this week. 

Treasury yields continued to move higher despite a growing sense that the bond and stock market are oversold in the short-term and due for a bounce. The 10-yr note yield jumped another 20 basis points this week to 4.78% and the 2-yr note yield rose two basis points to 5.06%. 

The move in yields partially reflected a recalibration of rate hike expectations following Friday's stronger-than-expected September employment report. Nonfarm payrolls increased a much stronger than expected 336,000 in September (Briefing.com consensus 158,000), and that news was accompanied by upward revisions to July and August data that summed to 119,000 more jobs than previously thought. At the same time, average hourly earnings growth moderated to 4.2% year-over-year from 4.3% in August.

Other notable data this week included the September ISM Services PMI, which showed a modest deceleration in the pace of expansion versus August, and the September ISM Manufacturing PMI, which showed a deceleration in the pace of contraction compared to August.

In addition, there was a cloud of political uncertainty hanging over the market after the House voted 216-210 in an unprecedented action to remove Kevin McCarthy as Speaker of the House. This is likely to complicate the negotiations to avoid another government shutdown after November 17 since business in the House will be stalled until a new Speaker is elected.

• Nasdaq Composite: ++1.6% for the week / +28.3% YTD

• S&P 500: +0.5% for the week / +12.2% YTD

• S&P Midcap 400: -1.9% for the week / +1.0% YTD

• Dow Jones Industrial Average: -0.3% for the week / +0.8% YTD

• Russell 2000: -2.2% for the week / -0.9% YTD

Market Recap - MIXED WEEK TO CONCLUDE LOSING MONTH

The Stock Market Settled The Week Mixed At The Index Level.

Some rebound attempts throughout the week left the Nasdaq and Russell 2000 with slim gains while the Dow Jones Industrial Average and S&P 500 declined 1.3% and 0.7%, respectively. This is a growing belief that the stock market is due for a bounce after suffering steep losses in September, but rising long‐term rates kept stocks in check.

The 10‐yr note yield jumped 13 basis points this week, and 48 basis points this month, to 4.57%. The 2‐yr note yield declined eight basis points this week, and rose 18 basis points this month, to 5.04%.

The concern for stock market participants is not necessarily the size of the rate increases, but rather the pace at which rates are moving. In addition, the jump in rates more recently doesn't appear to be tied to a fear of more rate hikes by the Fed.

The fed funds futures market sees only a 14.2% probability of a 25‐basis points rate hike at the November FOMC meeting, versus 27.5% a week ago and 62.3% a month ago, according to the CME FedWatch Tool.

That understanding may create some angst about what else is driving the Treasury market. Some other factors include: the Fed having a long way to go still with its QT efforts, other central banks possibly selling Treasuries in a bid to support their currencies, and concerns about the budget deficit issue.

In addition to the move in interest rates, seasonality was cited as another potential factor weighing over the market. September, historically, has been the worst month of the year for the S&P 500.

Market participants received some economic data this week, including a weaker than expected August new home sales report, a low level of weekly jobless claims, and some pleasing inflation data in the form of the core‐PCE Price Index for August.

WTI crude oil futures jumped more than $7.00/bbl this month, settling Friday's session at $90.78/bbl, which stoked lingering concerns about inflation expectations, rising gas prices, and a slowdown in consumer spending.

The rate‐sensitive S&P 500 utilities sector saw the largest decline this week by a decent margin, falling 7.0%. The next worst performer was the consumer staples sector (‐2.1%). Only the energy (+1.3%) and materials (+0.2%) sectors registered gains on the week.

• Nasdaq Composite: +0.1% for the week / +26.3% YTD

• S&P 500: ‐0.7% for the week / +11.7% YTD

• S&P Midcap 400: +0.3% for the week / +3.0% YTD

• Russell 2000: +0.5% for the week / +1.4% YTD

• Dow Jones Industrial Average: ‐1.3% for the week / +1.1% YTD

Market Recap - FED AND MARKET RATES KEEPS PRESSURE ON STOCKS

The Major Indices Registered Sizable Declines This Week. 

Softness in mega caps had a disproportionate influence on index performance, but there was no effort to rotate anywhere else so many stocks came along for the downside ride. 

All 11 S&P 500 sectors finished in the red this week. The consumer discretionary (-6.4%), real estate (-5.4%), and materials (-3.7%) were the top laggards while the health care sector (-1.2%) saw the slimmest loss. 

The catalyst for the weakness was another big jump in Treasury yields. The 2-yr note yield climbed eight basis points this week to 5.12%. The 10-yr note yield climbed 12 basis points this week to 4.44%. Including this week's move, the 10-yr note yield is up 35 basis points this month.

Those moves were largely in response to the Fed's hawkish pause on Wednesday.

As expected, the FOMC voted unanimously to leave the target range for the fed funds rate unchanged at 5.25-5.50%. There were few changes to the directive itself, but the market was focused on the Summary of Economic Projections and dot plot, which conveyed two key takeaways: (1) Policy rates are anticipated to remain higher for longer and (2) Fed officials are not expecting to cut rates in 2024 as much as they were anticipating when they updated their forecasts in June.

The median fed funds rate estimate for 2023 was unchanged at 5.6%, but the median estimate for 2024 was 5.1%, versus 4.6% in June. The former estimate suggests officials are still leaning in favor of one more rate hike this year, whereas the latter revision connotes an expectation that rates will come down by only 50 basis points in 2024, as opposed to 100 basis points when estimates were provided in June. Meanwhile, the median estimate for 2025 was 3.9% versus 3.4% in June, and a median estimate of 2.9% was introduced for 2026. The longer-run fed funds rate estimate was maintained at 2.5%, leaving one to infer that the Fed is going to stay committed to its 2.0% inflation target.

Fed Chair Powell said several times at his press conference that the Fed is going to "proceed carefully" when thinking about making a policy move, but said it's plausible that the neutral rate is higher than the longer run rate (2.5%), which he said is part of the explanation for why the economy has been more resilient than expected.

The wrinkle for the market wasn't that the Fed is decidedly hawkish at this point, it was that the Fed is still not dovish.

More Fed officials echoed Mr. Powell's view later in the week, Specifically, San Francisco Fed President Daly (a 2024 FOMC voter), Fed Governor Bowman (FOMC voter), and Boston Fed President Collins (not an FOMC voter this year or 2024) all made similar comments on Friday.

Other central banks also made policy announcements this week. The Bank of England voted 5-4 to leave its bank rate unchanged at 5.25%; the Hong Kong Monetary Authority left its key rate unchanged at 5.75%; the Swiss National Bank left its key rate unchanged at 1.75%; the Bank of Japan made no changes to its policy stance; the Riksbank increased its key rate by 25 basis points to 4.00%; and the Norges Bank increased its key rate by 25 basis points to 4.25%.

In corporate news, there were two notable initial public offerings this week. Instacart and Klaviyo both traded above their IPO price after opening, but rolled over with the rest of the market by the end of the week.

The UAW extended its strike to all GM and STLA parts and distribution centers beginning at noon ET on Friday. This followed confirmation that the UAW made progress on labor talks with Ford, but indicated that Stellantis (STLA) and General Motors (GM) are going to need "serious pushing."

• Nasdaq Composite: -3.6% for the week / +26.2% YTD

• S&P 500: -2.9% for the week / +12.5% YTD

• S&P Midcap 400: -2.8% for the week / +2.7% YTD

• Dow Jones Industrial Average: -1.9% for the week / +2.5% YTD

• Russell 2000: -3.8% for the week / +0.9% YTD