Good morning investors!
A big reversal late in the day pushed the S&P into positive territory, with the index ending the day 0.4% higher.
The move came after PCE inflation showed signs of cooling, while consumer spending and jobless claims pointed to a slowing economy. Markets initially didn’t like the news but that all changed about a half hour before the close.
Today we get PMI data and a speech from Jerome Powell. You can bet investors will be hanging on every word.
Don’t miss a thing - head to the Discord to get full breakdowns of all earnings and economic reports.
Market Recap
It was a green day for the S&P, Dow, Bitcoin and treasury yields, while the Nasdaq and oil prices fell.
Fed’s favorite gauge shows inflation rose 0.2% in October and 3.5% from a year ago, as expected
Inflation as measured by personal spending increased in line with expectations in October, possibly giving the Federal Reserve more incentive to hold rates steady and perhaps start cutting in 2024, according to a data release Thursday. The personal consumption expenditures price index, excluding food and energy prices, rose 0.2% for the month and 3.5% on a year-over-year basis. Both numbers aligned with estimates. Energy prices fell 2.6% on the month, helping keep overall inflation in check, even as food prices increased 0.2%. Read more
U.S. consumer spending cools; labor market gradually slowing
U.S. consumer spending rose moderately in October, while the labor market showed signs of gradually weakening, bolstering expectations the Federal Reserve's interest rate hiking campaign was over. Consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased 0.2% last month after a 0.7% gain in September. Initial claims for state unemployment benefits increased 7,000 to a seasonally adjusted 218,000 for the week ended Nov. 25. The number of people receiving benefits after an initial week of aid, a proxy for hiring, increased 86,000 to 1.927 million, the highest since November 2021. Read more
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Activist investor Nelson Peltz launches Disney proxy fight, seeks multiple board seats
Activist investor Nelson Peltz and his firm are seeking more than two seats on Disney’s board, setting the stage for a proxy fight. Trian Fund Management, which Peltz co-founded, said Thursday morning that it “intends to take our case for change directly to shareholders.” Trian said Disney earlier in the day offered to set up a meeting with the entertainment giant’s board, but rejected Trian’s bid to join the board, including the addition of Peltz. The news came the morning after Disney added Morgan Stanley CEO James Gorman and former Sky TV boss Jeremy Darroch to its board, a move widely seen as a bid to fend off a potential challenge from Peltz. Read more
Pending home sales drop to a record low, even worse than during the financial crisis
Pending home sales, a measure of signed contracts on existing homes, dropped 1.5% in October from September and were down 8.5% from October of last year. That’s the lowest level since the National Association of Realtors began tracking this metric in 2001, meaning it’s even worse than readings during the financial crisis more than a decade ago. Because the index measures signed contracts, it is the most recent indicator of housing demand. It reflects the buyers who were out shopping in October, which was when the popular 30-year fixed mortgage rate briefly shot higher than 8%. Read more
OPEC+ agrees to voluntary oil output cuts
OPEC+ oil producers agreed to voluntary output cuts totalling about 2.2 million barrels per day (bpd) for early next year led by Saudi Arabia rolling over its current voluntary cut. Saudi Arabia, Russia and other members of OPEC+, who pump more than 40% of the world's oil, met on Thursday and issued a statement summarizing countries' voluntary cut announcements after its meeting ended. Oil prices fell by more than 3% after the announcement. Read more
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Thank you for taking the time to read today’s newsletter. Until next time investors!
Chris
CMG Venture Group
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