Markets Moving On Each Whisper From Fed

By Scott Poore, AIF, AWMA, APMA
Chief Investment Officer, Eudaimonia Group

Markets waivered during the week, but ended positive on Powell’s dovish comments.  There were a lot of economic updates to digest last week, but investors remained focused on the Fed.  Early in the week, St. Louis Fed region’s Bullard started the week off with hawkish comments that we were no where near a slowing pace of rate hikes.  That sent markets lower until Wednesday when Powell reiterated that a slower pace was needed.  A strong jobs report on Friday spooked investors into thinking it might affect the plan for slower rate hikes, but the markets finished off the lows and nearly positive by the end of the day.

There were some good economic numbers last week and some underwhelming numbers.  Both the Black Friday and Cyber Monday numbers were strong and above expectations.  The Redbook Sales numbers were well above average last week and Personal Spending and Personal Income were in-line or better-than-expected, letting us know the U.S. consumer is alive and well.  That doesn’t mean we’re in a robust economy, but the consumer drives the boat.  Manufacturing numbers have not been great this year.  Housing is still struggling, but may be showing signs of bottoming.  We’re in  blackout period for Fed speakers until the FOMC meets in 8 days for the final rate decision of 2022.  The Fed’s favorite barometer, PCE Prices, looks to have slowed in October and if the PPI number for November shows a 5th consecutive month of declines a slower rate pace is on.

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