Market Drama

Featuring Zoe CEO & Founder, Andres Garcia-Amaya, CFA

November 21st, 2022 

Watch Time: 3 minutes

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

Disclosure: This page is not investment advice and should not be relied on for such advice or as a substitute for consultation with professional accounting, tax, legal or financial advisors. The observations of industry trends should not be read as recommendations for stocks or sectors.

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