Week In Review

Jason Newcomer CFP®, EA, AIF®

November 30, 2024

Economy

The chances of another interest rate cut next month rose this week as the Fed's preferred measure of inflation (the personal consumption expenditures price index) rose slightly to 2.3%, up from 2.1% the month prior. Core PCE (which strips out food and energy prices) rose 2.8%, up from 2.65%. This time last week, the market had handicapped the chance of a December rate cut at 50/50 odds. Heading into this weekend, the market has moved those odds to about a 66% chance of a cut. The Fed's target for core PCE is 2%, but it's been stuck around 2.7% - 2.8% for the last six months.

A quick look at some housing data - pending home sales for the month of October were up 2%, and up 5.45% year-over-year, according to the National Association of Realtors. This uptick in housing activity comes despite mortgage rates remaining stubbornly high, with the 30-year mortgage falling ever so slightly to 6.81% this week. Still, with the hopes of lower mortgage rates in the not-too-distant future, this could be an early sign that the housing market is coming back into balance.

Markets

There were no Black Friday sales to be found on Wall Street this week as the S&P 500 rose 1.06% and closed at a new all-time high to cap a shortened week. The index closed out its best month of 2024 which saw gains of more than 5%. Small cap stocks fared even better during the month of November, with the Russell 2000 index rising by more than 10%. Some of the past week's market rally may be attributed to someone by the name of Scott Bessent, a hedge fund manager who was picked by president elect Trump to lead the Treasury Department. The pick by Trump assuaged some fears of inflation reaccelerating under the Trump administration due to calls for tariffs. Bessent has made past remarks on his views on the topic, saying, "The tariff gun will always be loaded and on the table but rarely discharged... A lot of what he’s doing is escalate to de-escalate. My goal for his administration would be to save international trade and not end up looking like…turn-of-the-century tariffs."

What We're Reading

The Hot New Job For Men: Nursing - WSJ
Is It Too Late to Buy Bitcoin? - Ben Carlson

Have a great weekend.

Dogwood Wealth Management