Market Musings 12/4/2023

Quick thoughts on the markets and major portfolio news. Not on Ursa yet? Download Ursa from the App Store!

Markets surge in November with investors feasting on the end of #RisingYields and a #Goldilocks soft landing…

What a month! The S&P 500 surged +9% in November recovering from a three-month market slide since July.

A rate hike pause kicked off the dove rally at the start of the month. The Fed held rates flat for the second consecutive meeting prompting end of #RisingYields speculation and #Goldilocks soft landing optimism to return.

The CPI data mid-month added more fuel to the rally. October CPI came in below expectations lowering Y/Y inflation to 3.2%. Meanwhile, core CPI only slightly rose 0.2% M/M-also lower than expected. Markets feasted on bullish optimism that inflation has cooled enough for the Fed to end its #RisingYields rate hikes.

And then came the holiday seasonal strength. It was a record Thanksgiving weekend with more than 200M deal-searching shoppers. Black Friday and Cyber Monday both topped expectations as shoppers opened their wallets for bargains. Markets hoping the record sales signal consumer sentiment remains resilient-needed for a #Goldilocks soft landing.

The S&P 500 kicked off December hot too, but saw some weakness today. We, too, believe #RisingYields is likely over, but think the market may be a little too optimistic for quick turnaround on rate cuts and a #Goldilocks soft landing. Despite the rampant market optimism, there were still some mixed data in November that was largely ignored. After a 9% run in November, we wouldn’t be surprised to see some pullback near-term in December.

Our portfolios held up well in November benefiting from our #Flight2Safety Value tilt as well as being overweight in Financials. We’re still seeing that portfolio strength extend into December as well. While markets likely remain volatile near-term, we continue to recommend long-term investors to build positions.

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The statements, opinions and analyses presented here are provided as general information. This article is the opinion of the author. Anything within this article should NOT be considered an investment recommendation or advice. See Ursa’s full disclosures here.

Original Photo by Karolina Grabowska.