Monthly Observations from CIO, Chris Zaccarelli
December 1, 2022
Markets in Review
Markets continued rising in November, but at a smaller pace than in October, as the S&P 500 rose 5.4% during
the month, for a year-to-date return of -14.4%. The MSCI All Country World index also rose, up 7.6% in
November, reducing its full year losses to -16.4%. Bonds also gained, with the Bloomberg BarCap U.S.
Aggregate Bond index adding 3.7% during the month, which reduced its full year losses to -12.6%.
November’s gains built on a strong October, with a lower-than-expected consumer price index (CPI) report
giving markets a boost. The CPI report is the main inflation report that most people watch and the belief is that
slowing inflation data will allow the Federal Reserve to reduce the pace of their interest rate hikes.
- Stock fell the most on a “Fed Day” in almost two years
- A rocket fell in Poland, a NATO ally, but it didn’t appear to be fired by Russia
- A smaller than expected CPI report kicked off a rally in stocks
News in Review
Below are some stories that caught our eye this past month. To learn more, follow the links to the full article.
The S&P 500 suffered its worst drop on a Fed decision day in almost 2 years, dropping 2.5% after Federal Reserve
Chairman Powell said that the Fed still has “some ways to go” in raising interest rates. Prior to his comments, the
stock market had risen, but it gave back all of its gains and more after the chairman talked tough on interest
A missile fell in NATO ally Poland’s territory and killed two people, briefly setting off alarms that NATO – and the
US – would be drawn into Russia’s war with Ukraine. Initial assessments were that the debris that fell in Poland
was a result of Ukrainian self-defense missiles that were fired against incoming Russian missile attacks. Western
leaders joined together in condemning Russian actions in the first place, which caused this tragedy.
An important economic report, the Consumer Price Index (CPI) was released on November 13th and it showed
that inflation was beginning to slow down its pace. The report on October prices showed a 7.7% annualized
increase, which was less than the 8.2% annualized gain which was expected, and that caused traders to buy
stocks on the hopes that the Fed would be able to reduce the speed at which they were hiking interest rates and
ultimately be able to stop raising rates more quickly than previously feared.
Deceased Apple Computer founder Steve Jobs was notorious for wearing Birkenstock sandals in the 1970’s and
80’s, but little could he know that someone would pay over $200,000 for them, years after his death. The most
surprising thing is that they sold for 100 times more than what someone paid for them just 6 years ago.
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