Market Recap Week of 11/07/2022 Through 11/11/2022

The S&P 500 index jumped 5.9% last week, which included its biggest one-day gain since April 2020, amid relief over data showing consumer prices rose less than expected in October.

The weekly climb — the S&P 500’s largest since June — put the index into positive territory for the month to date; it is now up 3.1% so far for November. However, the index is down 16% for the year to date.

Last week’s advance came largely on a 5.5% Thursday jump as the Bureau of Labor Statistics reported the US core consumer price index was up by just 0.3% in October, less than the consensus estimate for a 0.5% increase and smaller than September’s 0.6% increase. On a year-over-year basis, core CPI was up 6.3%, below expectations for a 6.5% rise and down from a 6.6% increase in September, which had marked a 40-year high.

Investors were excited at the possibility that inflation may have peaked in September. The report also prompted hopes for the Federal Reserve’s policy-setting committee to start moderating the pace of its interest rate increases. The Federal Open Market Committee has made four consecutive rate increases of 0.75 percentage point each, and investors are becoming more hopeful that the next rate increase could be just a 0.5 percentage point.

All of the S&P 500’s sectors rose last week. The technology sector had the largest percentage increase, up 10%, followed by a 9.2% climb in communication services and a 7.7% rise in materials. Real estate was also strong, up 7.1%, followed by increases of 5.9% and 5.7% in consumer discretionary and financials, respectively.

Next week’s earnings calendar features a number of retailers including Walmart (WMT), Home Depot (HD), Lowe’s (LOW) and Target (TGT). Other companies expected to report quarterly results next week include NVIDIA (NVDA), Cisco Systems (CSCO) and Applied Materials (AMAT).

Economic data slated for release next week include October retail sales on Wednesday, October building permits and housing starts on Thursday, and October existing home sales on Friday.

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