Menu
Equities Slip and Yields Rise Amid Stalled Inflation Progress

Equities Slip and Yields Rise Amid Stalled Inflation Progress

Equities Slip and Yields Rise Amid Stalled Inflation Progress

Equity markets retreated slightly last week breaking a three-week win streak as inflation reports showed stalled progress again last month. Global equities (represented by the MSCI All Country World Index) were down -0.84% while domestic stocks (represented by the S&P 500 Index) were down -0.61%.

Consumer Price Index (CPI)

The week’s economic calendar was headlined by the Labor Department’s reading of the Consumer Price Index (CPI). Prices rose at an annual rate of 2.7%, in line with expectations but a tick above October’s 2.6% reading. Core CPI, excluding food and energy prices, remained steady at a year-over-year rate of 3.3% in November. Thursday’s report of the Producer Price Index (PPI) also showed a similar monthly trend with headline PPI rising slightly from October. While the moderating trend of inflation seemed to stall these past months and still sits above the Fed’s long-term target of 2%, headline CPI has come down substantially from its peak of 9.0% back in June 2022.

Equities Slip and Yields Rise Amid Stalled Inflation Progress

Labor Market

Weekly initial claims for unemployment jumped slightly to 242,000 from 225,000. Continuing claims also ticked up and remain near recent highs.

10-Year Treasury Rate

The inflation and labor market news pushed treasury yields higher, changing course from the past few weeks declines. The 10-year Treasury rate closed near 4.40% last week, up from 4.15% the previous week.

Looking Forward

This week the US Federal Reserve holds its final policy-setting meeting of the year. Markets widely expect another quarter percentage point rate cut to bring the Fed Funds target rate to 4.25% – 4.50%. This would mark the third consecutive rate cut following September’s 50 basis point and November’s 25 basis point cuts.

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.

Mike Horwath

Mike heads the internal Investment Committee that is responsible for the investment direction of the firm. He works closely with Diversified’s financial planners to support the investment side of the lifelong financial planning process. Lastly, it’s Mike’s responsibility to oversee the ever-changing global investment landscape and work with the planners to evaluate the impact on each of our client’s strategies.

Related Posts

Financial planning and Investment advisory services offered through Diversified, LLC. 

Diversified is a registered investment adviser, and the registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the SEC.

A copy of Diversified’s current written disclosure brochure which discusses, among other things, the firm’s business practices, services and fees, is available through the SEC’s website at: www.adviserinfo.sec.gov.

Diversified, LLC does not provide tax advice and should not be relied upon for purposes of filing taxes, estimating tax liabilities or avoiding any tax or penalty imposed by law. The information provided by Diversified, LLC should not be a substitute for consulting a qualified tax advisor, accountant, or other professional concerning the application of tax law or an individual tax situation.

Nothing provided on this site constitutes tax advice. Individuals should seek the advice of their own tax advisor for specific information regarding tax consequences of investments. Investments in securities entail risk and are not suitable for all investors. This site is not a recommendation nor an offer to sell (or solicitation of an offer to buy) securities in the United States or in any other jurisdiction.

Please note, the information provided on this website is for informational purposes only and investors should determine for themselves whether a particular service or product is suitable for their investment needs. The content on this website is not intended to provide tax, legal, or accounting advice, and you are advised to seek out qualified professionals that provide advice on these issues for your individual circumstances.

Diversified, LLC is an investment adviser registered with the U.S. Securities and Exchange Commission (SEC). Registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the SEC. Diversified only transacts business in states in which it is properly registered or is excluded or exempted from registration.  A copy of Diversified’s current written disclosure brochure which discusses, among other things, the firm’s business practices, services and fees, is available through the SEC’s website at: www.adviserinfo.sec.gov. Diversified does not provide tax or legal advice and individuals should seek the advice of their own tax or legal advisors for specific information regarding their situations. Investments in securities involve risk, including the possible loss of principal. The information on this website is not a recommendation nor an offer to sell (or solicitation of an offer to buy) securities in the United States or in any other jurisdiction.

www.finra.org | www.sipc.org | Privacy Policy

Diversified LLC