Goldilocks Data Boosts Stocks Amidst Bond Euphoria Dwindling: Markets Wrap

Title: US Stock Market Climbs in November, Riding on Federal Reserve Speculation and Resilient Economy

The US stock market showed promising signs of growth throughout November, propelled by optimistic speculation surrounding the Federal Reserve’s ability to achieve a soft landing and the resilience of the US economy.

The S&P 500 index surpassed the 4,500-point mark, although the pace of its growth slowed compared to the previous session, when short covering and bets on the Federal Reserve’s rate hikes coming to an end boosted stocks.

One notable performer was retail giant Target Corp., whose shares soared following the release of solid earnings. However, chipmaker Nvidia Corp. experienced a downward trend after a 10-day rally. Tech company Cisco Systems Inc. also suffered losses in late trading due to a disappointing forecast.

On the bond market front, treasuries fell as traders reestablished bearish bets, responding to global bonds almost erasing their 2023 slide.

Economic data on retail sales in October and producer prices indicated the resilience of the US economy, while also providing evidence of cooling inflation.

Goldman Sachs strategist David Kostin recently made an optimistic prediction for US stocks in the upcoming year, citing factors such as avoiding a recession, rising earnings, and steady valuations.

With the S&P 500 approaching its record high achieved in January 2022, market analysts and strategists anticipate a year-end rally in equities. This is largely attributed to strong consumer activity and the expectation of continued corporate profit growth.

Turning to the bond markets, the retreat in Treasuries was seen as a response to relief that consumption did not decline further due to softening labor markets.

Opinions on the state of inflation remain mixed among market participants, with some warning that the problem is not yet resolved.

In the energy sector, oil prices dropped following a government report that revealed an increase in US crude inventories.

In terms of corporate news, Palo Alto Networks Inc. missed Wall Street estimates and announced lower full-year estimates. Goodyear Tire & Rubber Co. is seeking a new CEO while implementing cost-cutting measures. SpaceX received approval for the second launch of its Starship rocket, and ValueAct Capital acquired a stake in Walt Disney Co.

This week, key events to watch out for include China’s new home prices, US initial jobless claims and industrial production, Walmart earnings, and speeches by officials from the US Federal Reserve and the Bank of England.

As the US stock market continues its upward trajectory, driven by the Federal Reserve’s actions and the resilient economy, investors remain cautiously optimistic about the future.