Thanksgiving week proved a profitable one for market participants, with stocks and bonds both moving higher. The S&P 500 jumped more than two per cent, while the Bloomberg U.S. Aggregate Bond index gained more than one per cent1. The Fed dominated the week. Cleveland Fed President Loretta Mester told CNBC in an interview on Monday the pace of rate hikes could finally slow2. The markets welcomed the dovish remarks, with major stock and bond indices rallying Tuesday to close at their highest levels since mid-September.

The rallies continued Wednesday, as Meeting Minutes from the Fed confirmed Mester’s remarks. The Minutes stated: “...a substantial majority of participants judged that a slowing in the pace of increase would likely soon be appropriate.”3 The bond market is now anticipating a 50bps increase in the Fed Funds Rate in both December and February, and a possible pause in March4.

Market returns have improved markedly over the last six weeks. The S&P 500 has now climbed 15% off its October 13 low, though it’s still down 14.4% since the first of the year. Meanwhile, the bond market has climbed more than 5% off its October 21 low. The bond market is still off 12.5% for the year through November 255.

Despite high inflation and ongoing recession fears, online shoppers spent a record $9.12 billion on Black Friday, according to Adobe6. Strong spending was expected to continue through the weekend in advance of Cyber Monday. In addition to retail spending, markets will be focused this week on Fed-influencing job, housing and inflation numbers. The markets will be looking for Goldilocks reports – numbers weak enough to support the argument for smaller and slower rate increases, but not too weak to signal a recession, and not too strong to argue for continued large rate increases.

 

 

 

Thank you for your confidence in our team,

Asset Management Department

Sequoia Financial Group

 

The views expressed represent the opinion of Sequoia Financial Group. The views are subject to change and are not intended as a forecast or guarantee of future results. This material is for informational purposes only. It does not constitute investment advice and is not intended as an endorsement of any specific investment. Stated information is derived from proprietary and nonproprietary sources that have not been independently verified for accuracy or completeness. While Sequoia believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability. Statements of future expectations, estimates, projections, and other forward-looking statements are based on available information and Sequoia’s view as of the time of these statements. Accordingly, such statements are inherently speculative as they are based on assumptions that may involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those expressed or implied in such statements. Investing in equity securities involves risks, including the potential loss of principal. While equities may offer the potential for greater long-term growth than most debt securities, they generally have higher volatility. Past performance is not an indication of future results. Investment advisory services offered through Sequoia Financial Advisors, LLC, an SEC Registered Investment Advisor. Registration as an investment advisor does not imply a certain level of skill or training.

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Investment advisory services offered through Sequoia Financial Advisors, LLC, an SEC Registered Investment Advisor. Registration as an investment advisor does not imply a certain level of skill or training.

Dovish Fed Remarks Fuel Stock and Bond Rallies | Sequoia Financial Group

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