Halyard’s Weekly Wrap – 11/24/23 – Neither too Hot nor too Cold

The upward trajectory of stock prices continued this week despite what some observers called hawkish Fed minutes.  We’re hesitant to side with that view simply because there was no deviation from the comments that Chairman Powell communicated at the post-meeting press conference.  The committee remains vigilante against any signs that economic growth or inflation is reaccelerating and will raise the Fed Funds rate again if needed.

Economic data for the holiday-shortened week was as expected, neither too hot nor too cold.  One data point that caused us some concern was the University of Michigan expected inflation for the coming 12 months.  The measure fell to 3.2% in September, indicating to us that consumers were starting to believe that the inflation surge was behind us.  In October that reversed and came in at 4.2%, then rose again to 4.5% in November.  Granted, it is a survey and there is an associated margin of error.  Nevertheless, the direction of the response is cause for some concern.  As always, we’ll be watching to see how next month’s survey shakes out.

Next week with Black Friday and Cyber Monday behind us, we’ll have an early indication of the mood of consumers and their propensity to spend.  The most significant data release is New Home Sales and economists are expecting it to register 725,000 annual units, down from the previous month.  The employment report, which is typically released on the first Friday of the month, won’t be released until the following Friday, December 8^th.