December 5th, 2022
THE WEEK ON WALL STREET
Stocks ended higher last week as investors navigated the crosscurrents of a potential easing in future rate hikes and continued strength in the labor market.
The Dow Jones Industrial Average edged 0.24% higher, while the Standard & Poor’s 500 gained 1.13%. The Nasdaq Composite index improved by 2.09% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, rose 1.68%.1,2,3
A CHOPPY WEEK
The week started lower on concerns about protests in China over its zero-Covid policy and comments by two Fed presidents that the Fed may continue its aggressive rate hike policy. Stocks then surged on Wednesday following remarks by Fed Chair Powell, confirming the central bank’s intention to slow the pace of interest rate increases, which may begin as early as this month.
Stocks buckled in early trading on Friday’s monthly employment report, which showed a higher-than-expected increase in new job growth and an above-expectations jump in wage growth. But stocks cut their losses by the end of the session to lock in a positive week.
LABOR MAY BE KEY
In a presentation to the Brookings Institution, Powell said that it might be time to begin moderating the pace of rate hikes. He cited several areas of progress in the inflation fight, including a deceleration in interest rate sensitive parts of the economy, such as housing and supply chain improvement. He also noted the price declines seen in goods and rents. 4
But Powell suggested the labor market would need to cool down before the Fed could feel confident about making sustainable progress toward its two percent inflation target. November’s employment report showed robust job and wage growth, which indicated any cooling remained in the future.5
Tip of the Week
You can’t control what happens with interest rates or stocks in the future; you can control the amount you save for retirement. Boosting your personal savings ratio may bring you closer toward your retirement savings objective.
THE WEEK AHEAD: KEY ECONOMIC DATA
Monday: Purchasing Managers’ Index (PMI) Composite. Factory Orders. Institute for Supply Management (ISM) Services Index.
Thursday: Jobless Claims. Purchasing Managers’ Index (PMI) Manufacturing.
Friday: Producer Price Index (PPI). Consumer Sentiment.
Source: Econoday, December 2, 2022
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.
THE WEEK AHEAD: COMPANIES REPORTING EARNINGS
Tuesday: AutoZone, Inc. (AZO), MongoDB, Inc. (MDB).
Wednesday: Campbell Soup Company (CPB).
Thursday: Broadcom, Inc. (AVGO), Costco Wholesale Corporation (COST), Chewy (CHWY).
Source: Zacks, December 2, 2022
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.
Quote of the Week
“In times of rapid change, experience could be your worst enemy.”
J. PAUL GETTY
Riddle of the Week
A train moving as fast as it can go strikes a man’s hand, yet he is uninjured, and the train goes off its tracks. Under what circumstances could this happen?
LAST WEEK’S RIDDLE: A lone pine tree stands on a cliff. The wind is blowing from the east through the mountains. Which way do the tree’s leaves blow?
ANSWER: Pine trees do not have leaves.
Valley Oak Wealth Management can be reached at 415.898.4439 info@valleyoakwm.com or ValleyOakWM.com
Know someone who could use information like this?
Please feel free to send us their contact information via phone or email. (Don’t worry – we’ll request their permission before adding them to our mailing list.)
Tim Russell is a Wealth Advisor with, and securities offered through, LPL Financial member FINRA/SIPC
This material does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.
CITATIONS:
1. The Wall Street Journal, December 2, 2022
2. The Wall Street Journal, December 2, 2022
3. The Wall Street Journal, December 2, 2022
4. The Wall Street Journal, November 30, 2022
5. The Wall Street Journal, November 30, 2022