Markets Finish the Holiday-Shortened Week in Positive Territory

Markets Finish the Holiday-Shortened Week in Positive Territory

Markets finished the shortened Thanksgiving trading week in positive territory. Global equities, as measured by the MSCI ACWI, finished the week up 3.56%, while domestic large-cap equities measured by the S&P 500 rose 3.74%. Small caps as measured by the Russell 2000 led the way up over 5% for the week.

U.S. Retail Sales

The Commerce Department reported that U.S. retail sales rose 0.2% in September, slowing from 0.6% in August and falling short of estimates for about a 0.4% increase. The release also showed that sales excluding autos and gas were up just 0.1% for the month, and control group sales, which exclude several categories and feed into the GDP calculation, declined 0.1% from the prior month. This update comes as the October retail sales report was delayed due to the federal government shutdown. Some additional data releases delayed by the government shutdown included the September producer price index from the Bureau of Labor Statistics. On Tuesday, the BLS reported that the PPI, which measures wholesale-level inflation, rose 0.3% in September, in line with consensus expectations, while core PPI, which excludes food and energy, increased 0.1% for the month, coming in below forecasts.

Labor Department Report

The Labor Department reported that initial claims for U.S. unemployment benefits fell to 216,000 for the week ended November 22, down from the prior week’s upwardly revised 222,000 and marking the lowest level since April, while continuing claims increased by 7,000 to 1.960 million, just under the year-to-date high of 1.968 million reached in late July. At the same time, The Conference Board said consumer confidence declined sharply in November, with the index dropping 6.8 points to 88.7, its weakest reading since April, as many consumers pointed to prices and inflation, tariffs and trade, and politics as the main factors weighing on sentiment.

Fed’s Beige Book

On Wednesday, the Federal Reserve released its Beige Book, which compiles economic updates from the 12 regional banks. The report showed little overall change in activity across most districts, noted that employment declined slightly and prices rose moderately, and highlighted broad input cost pressures in manufacturing and retail tied to tariffs. It also said consumer spending continued to weaken, though higher-end retail remained resilient.

Looking Ahead

For the week ahead, it will be a busy stretch, with the ISM Manufacturing PMI and other manufacturing indicators starting things off early in the week, followed midweek by the ADP employment report and the ISM Services PMI, and ending with the PCE inflation report and the Non-Farm Payrolls report.

As Always

I’d like to leave you with the final line we’ve used since we started these commentaries back at the very height of market volatility in March 2020. Always remember that we create financial/investment plans not for the easy times, but to prepare for the tough ones.