As we moved into November 2024, uncertainties loomed due to upcoming elections, 'higher' interest rates, and labor market conditions. However, these uncertainties were resolved swiftly with the presidential election and Federal Reserve meeting concluded early in the month. The sentiment shift made November a fantastic period for long-term investors!

Buoyant Stock Market Performances

The U.S. stock market experienced a substantial surge in November. This period marked the sixth positive month out of the last seven for the S&P 500. November's performance was stellar, with the S&P 500 climbing 5.73%, the Nasdaq 100 rising by 5.23%, and the Dow Jones Industrial Average leading with a 7.54% increase. These gains followed the presidential election, aligning with the broader positive investor sentiment.

Federal Reserve's Rate Cut Decisions

On November 7th, the Federal Reserve's decision to cut the overnight lending rate by 25 basis points was well-received, aligning with market expectations. This action followed a notable 50 basis point reduction in September, bringing the target lending rate range to 4.50% - 4.75%. With unanimous support, the move aimed to bolster the labor market, although further economic data is necessary for future inflation assessments.

Decline in Treasury Yields

The 10-year Treasury Note Yield declined slightly in November, closing at 4.177%, down from October's 4.285%. This decrease, while modest, is promising news for potential mortgage borrowers and U.S. equity investors.

Labor Market Challenges

Labor market data released in November revealed the creation of only 12,000 jobs in October, with downward revisions to the August and September figures. This was anticipated due to the disruptions caused by Hurricanes Helene and Milton. Despite the lukewarm job report, major U.S. equity indexes recorded gains on the announcement day.

Inflation Trends and Expectations

October's inflation figures showed a 0.2% monthly increase in the Consumer Price Index (CPI), matching expectations. The year-over-year inflation rate inched up to 2.6%, primarily due to rising shelter costs. Meanwhile, Core CPI increased by 0.3% monthly, maintaining a 3.3% annual rate. The Producer Price Index rose by 0.2%, reflecting a similar pattern to the CPI. With these metrics aligning with expectations, the prospect of a December rate cut is strong.

Consumer Confidence on the Rise

Consumer confidence rose significantly in November, reaching a 16-month high with an index level of 111.7. Retail sales exceeded forecasts, underlining consumer resilience. The data from early Black Friday shopping showed a 3.4% increase in spending, continuing a trend seen in recent years. As consumers drive the economy, this resilience is fundamental to economic dynamics.

Market Stability Observed

November saw a notable reduction in market volatility, with the CBOE S&P 500 Volatility Index dropping to its lowest since July. With tempered volatility comes decreased investor fear, suggesting enhanced market confidence, a sentiment echoed by indicators like the CNN Fear and Greed Index.

As we approach the year's end, we encourage readers to consult with our financial team for personalized guidance. Long-term investing, as always, remains a robust strategy in navigating the evolving financial landscape.