Market Drama

Welcome to this week’s Market Drama.

• The S&P 500 fell 2%. That puts it down 17.8% for the year.
• 10-year treasury yield fell 17 basis points, which means treasury bonds’ prices went up. 
• We had November CPI numbers out and they were better than expected.
  • For example, core CPI was up year-over-year by 6%. It was expected to be up 6.1%.
• On Wednesday, the Fed announced that they’re hiking 50 basis points to 4.5%. 
• Retail sales declined 0.6% from November month-over-month. This is important since consumption is 68% of GDP. The fact that retail sales are down is an indication that the most important driver of growth is not looking so hot going into next year.
• Manufacturing PMI also declined to 46.2 from 47.7 in November. When it is below 50, it means contraction.

What to look forward to this week? 

• On Tuesday, we have November housing starts and new and existing home sales out
  • Real estate and housing are really important indicators for the overall economy.
• On Friday, the Personal Consumption Expenditure (PCE) Index for November comes out. 

Happy holidays and stay tuned for next week.

– Andres