• Global equities surged 6.6% last week.  U.S. stocks gained 5.9% while developed international and emerging market stocks added 8.4% and 5.7%, respectively.  Year-to-date, global equities are down 16.8% with domestics (-14.7%), developed international (-15.7%) and emerging markets (-22.1%).  Bonds rose 1.7% for the week, down 9.8% year-to-date.  The U.S. 10-yr Treasury yield fell 35 bps to 3.81%
  • The S&P 500 rebounded significantly from the previous week’s declines, driven largely by a 5.5% rally on Thursday – the single largest daily gain since the spring of 2020.  Better-than-expected inflation data released Thursday morning offered hope that decades high price increases are easing and perhaps giving Fed policymakers some breathing room in the months ahead sending bond prices higher and yields much lower.  The Consumer Price Index rose 7.7% from the same period a year ago compared to expectations of +7.9%.   In addition to beating expectations, October CPI was the lowest print this year, and marked deceleration from +8.2% in September and a peak of +9.1% in June.  Core CPI (excludes food and energy) rose 6.3%, decelerating from a peak of +6.6% in September.  With 91% of S&P 500 constituents reported, third quarter earnings growth is tracking to 2.2% and analysts have been scaling back fourth quarter expectations.  Consensus expectations now call for a 1.0% decline in fourth quarter earnings compared to growth of 3.9% forecast when the quarter began.
  • In the week ahead, investors will look to see if stocks can hold onto recent gains.  The economic calendar brings U.S. retail sales data on Wednesday (11/16).  While consumer spending likely increased 1.0% compared to September, we expect little change year-over-year after adjusting for inflation.

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