Market Drama

Welcome back to Zoe’s weekly market drama series.

• The U.S. Stock Market drifted lower after the sugar high rush dive down from last week’s better-than-expected October inflation number. 
• On the bond market, we saw the spread between the two-year treasury yield and the ten-year treasury yield continues to plunge deeper into negative territory. In fact, it’s now at the lowest level since February 1982.

  • An inverted yield curve (which is when a two-year or a one-year treasury bond is higher than a ten-year treasury bond) has a pretty good track record of telling us that there’s a U.S. recession coming.

• We saw the U.S. supplier price increases slow down for October. It’s called the PPI (Producer Price Index). The market was expecting a slightly higher number, and that’s two months in a row in which we see that PPI number come in, so that’s a positive signal of inflation coming down.
• When it comes to economic data on the housing side, we had worse-than-expected housing starts for October.
  • 4% drop month over month.

  • Higher interest rates are really starting to affect the housing market.

What to look out for this week? 

• Regarding economic data, we should highlight U.S. Manufacturing and service PMI for November. 
• The upcoming week is pretty light because of Thanksgiving. 

– Andres