Week in Review
The markets opened November on a positive note, with the S&P 500 gaining 2.1% in the first trading week. Bond yields stabilized as investors digest the latest Fed communications.
Key Market Movers
Technology Sector: Up 3.2% following strong earnings from major tech companies. AI-related stocks continue to outperform.
Energy Sector: Down 1.5% on softer crude oil prices, reflecting slower-than-expected global demand.
Healthcare: Up 1.8% as investors seek defensive positions and dividend income.
Economic Data of the Week
- Non-Farm Payrolls: Increased by 150K, signaling steady labor market conditions
- Unemployment Rate: Remains at 4.1%, near historical lows
- Inflation CPI: Year-over-year at 3.2%, continuing its downward trend
- Consumer Confidence: Rose to 108.3, indicating optimistic consumer sentiment
What to Watch
Fed Policy
The next FOMC meeting is December 18-19. Market expectations suggest the Fed may hold rates steady, having paused recent hikes.
Corporate Earnings
Earnings season continues through mid-November. Focus on guidance and management commentary about 2026 outlook.
Economic Calendar
- November 15: Retail Sales Data
- November 21: Initial Jobless Claims
- November 27: Thanksgiving (markets closed)
Portfolio Positioning
With higher bond yields, the 60/40 portfolio allocation (60% stocks, 40% bonds) has become more attractive. Consider rebalancing if your allocation has drifted.
Sector Recommendation
Maintain diversification across sectors, with slight overweight to healthcare and technology given current dynamics.
Investment Opportunities
High-Dividend Stocks: With bond yields attractive, dividend stocks remain attractive for income-focused investors.
Growth at Reasonable Price (GARP): Tech stocks showing earnings growth are more reasonable than last quarter.
Risk Factors to Monitor
- Geopolitical tensions
- Potential trade policy changes
- Corporate debt levels
- Currency fluctuations
Bottom Line
November is traditionally a strong month for equities. Maintain your long-term strategy, stay diversified, and remember that market noise should not derail your investment plan.
Happy investing!