Last Week
Wall Street kicked off December with modest gains in anticipation of the impending interest rate cut at this week’s FOMC meeting. The Nasdaq Composite fared the best, notching a 0.9% gain, while the S&P 500 added 0.3%, and the Russell 2000 rose 0.8% to set a record high on Thursday. The combination of soft jobs data and an in-line reading on the Federal Reserve’s preferred inflation gauge combined to push the odds of a rate cut to 87% by the end of the week.
Advancing and declining issues were about even, with half of the industry sectors finishing in the green, led by tech stocks. The Utility sector fared the worst, with a 4.5% drop as the 10-year Treasury yield moved 12 basis points higher to 4.14%. The Dollar slipped fractionally, while Gold remained steady.
There were some green shoots from the University of Michigan Sentiment survey that showed that consumers’ expectations for inflation in the coming year dropped to 4.1%, its lowest level since January. That drop is significant because inflation expectations can lead to inflationary pressures, creating a vicious circle. A rational outcome to the self-inflicted wounds from the destabilizing tariff policies would go a long way toward further easing inflationary concerns. Overall, the survey indicated an improvement in consumer sentiment, albeit at a still depressed level.
The Bears journeyed to the frozen tundra otherwise known as Lambeau Field and fell to the Packers, with #18 throwing an interception in the endzone to seal the loss.
It has become the winter of despair at the Mad House on Madison as the Bulls have dropped 7 consecutive games and have now lost 14 out of their last 17, following the thrilling 5-game win streak to start the season.
This Week
Circle Wednesday at 1 pm Central on your calendar as the FOMC will be making its monetary policy decision. It is widely expected that they will cut the federal funds rate by a quarter of a percentage point. The central bank will also release its forecast for 2026 rate cuts, and, of course, Fed Chair Jerome Powell will undoubtedly do his “the future is uncertain” routine. Listeners, particularly those who are Doors fans, will also hear that the Chairman’s end (of his term) is near.
The stocks mentioned above may be holdings in our mutual funds. For more information, please visit www.nsinvest.com.