US Markets

Stock prices posted gains in November as a change in the Fed’s interest outlook sparked a late-month rally.

The Dow Jones Industrial Average rose 1.7 percent, and the Standard & Poor’s 500 Index tacked on nearly 1.8 percent. The NASDAQ Composite lagged a bit, picking up 0.3%.1

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The stock market opened the month higher following the midterm elections which placed Democrats in control of the House and left a Republican majority in the Senate. Those gains were quickly lost, however, as an increase in the Producer Price Index prompted fears that accelerating inflation could force the Fed to take a more aggressive stance on interest rates.

Worries of Global Slowdown

Prices fell sharply during Thanksgiving week, led by steep declines in technology stocks and a plunge in oil prices, which raised concerns of a worldwide economic slowdown.

As the last week of trading began, stocks surged as a blowout start to the holiday shopping season pushed many of the market’s worries to the backburner.

Fed’s Nuanced Shift

Stocks jumped again mid-week on comments from Fed Chair Jerome Powell, who appeared to change his stance on monetary policy, stating interest rates were “just below” a neutral level. This follows a previous statement in which he indicated rates were a “long way” from neutral. This subtle change was a welcome relief to investors worried that an aggressive rate hike policy could dampen economic growth and corporate profitability going forward.

Stocks cemented gains in the final trading days as investors awaited any signs of progress in resolving trade tensions with China during the G-20 summit.

Sector Scorecard

Aside from Energy, which was down by 1.02 percent, all industry sectors moved higher in November, with gains in Communication Services (+2.66 percent), Consumer Discretionary (+4.60 percent), Consumer Staples (+2.66 percent), Financials (+7.13 percent), Health Care (+7.21 percent), Industrials (+5.72 percent), Materials (+7.35 percent), Real Estate (+4.78 percent), Technology (+0.54 percent), and Utilities (+1.22 percent).2

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