U.S. stock indexes finished the holiday-shortened week higher, boosted by dovish comments from some Fed officials and several weaker-than-expected economic reports that seemed to reinforce the idea that a December rate cut remains on track. Small-cap stocks outperformed their large-cap peers, as the Russell 2000 Index advanced 5.5%. The Nasdaq Composite also posted strong returns, rebounding from the prior week’s sell-off as concerns regarding elevated valuations and spending on AI appeared to take a back seat to optimism around the growth potential from the technology. In economic news, U.S. retail sales increased by 0.2% in September (below +0.4% estimates). September PPI rose 0.3% in September, in line with estimates. Core PPI increased by a lower-than-expected 0.1% during the month. US jobless claims hit lowest level in seven months while consumer confidence slides. Fed’s Beige Book notes softening labor market, rising prices. US Treasuries yields decreased as odds of a December Fed rate cut jumped. In international markets, the STOXX Europe 600 Index closed 2.35% higher while the Nikkei 225 Index gained 3.35% as JGB 10-year yields hit 17-year highs. Mainland Chinese stock CSI 300 Index rose 1.64% while Hong-Kong Hang Seng index gained 2.53%. Oil bounced back although the U.S. proposed a 28-point peace plan for resolution of the war in Ukraine’s Donbas region, as well as establishing a broader European & global security framework. Gold & Silver spiked, bitcoin jumped above $90k.
Have a great weekend
Charles & Syz Research Lab