Week In Review
Before we jump into the regularly scheduled e-mail, know that we are always looking for ways to add value to our clients' lives. To that end, this is a reminder to start thawing your Thanksgiving turkey now.
On Tuesday the Producer Price Index (PPI) report was released, and echoed the data from last week showing prices coming down. The PPI is an index used to measure the prices of goods and services before they reach consumers. It generally moves in the same direction as the Consumer Price Index (CPI), so Tuesday's PPI data, while nice to see, wasn't as newsworthy as the CPI report last Thursday. If anything, it's another data point you can use to make the case for a larger trend of falling inflation.
There's not much on the calendar next week in the way of economic news or reporting with a shortened work week.
The S&P 500 had a fairly uneventful week, ending the week down 0.69%. The lack of volatility was a nice change of pace. Since the October 12 lows, the S&P has risen by nearly 11%. This run we've been on in the last month or so may invoke memories of the rally we saw in the summer. Previously, the market had bottomed mid-June, then rallied by 17% through August, before fizzling out and giving back all of those gains to set a new low in October. That was without a doubt one of the more brutal bear market rallies ever as it marked the first time in history the stock market had gained back more than 50% of the losses of a bear market, only to later set a new low.
We're at the end of earnings season for the third quarter. About 70% of S&P 500 companies have beaten their earnings expectations, however, the expectations were set pretty low going in to earnings season with fears of higher inflation and recessionary headwinds. For the year, the S&P 500 is down about 17%.