General market news
- The yield curve flattened late last week, and the bond market is closed on Monday due to Veterans Day. On Friday, the 2-year closed at 2.92 percent, the 10-year at 3.18 percent, and the 30-year at 3.38 percent. The conclusion of the midterm elections and the Federal Reserve (Fed) pausing on rates until December, at the very least, have answered some lingering questions. But volatility should continue, as will the flattening of the curve, in the weeks and months to come.
- The three major U.S. markets were all up last week, with the Dow Jones Industrial Average and the S&P 500 leading the way. The tech-oriented Nasdaq Composite continues to lag, with Apple Inc. (AAPL), Alphabet Inc. (GOOG/GOOGL), and Netflix (NFLX) continuing to be out of favor following their October sell-offs. The more traditional value and defensive sectors outperformed, with health care, REITs, utilities, consumer staples, and financials leading the gains.
- Last week’s two major events—the midterm elections and the November Federal Open Market Committee (FOMC) meeting—both went as expected. The Democrats regained control of the House, while the Republicans added to their existing control in the Senate. Turning to the FOMC meeting, the committee made only minor changes to its policy statement and continued to describe economic activity as strong; however, it did see some moderation from the “rapid” business investment earlier in the year.
- On Monday, the Institute for Supply Management Nonmanufacturing index was released, declining to 60.3 from 61.6. This result was above expectations for a decline to 59.
- On Friday, the Producer Price Index showed inflation of 2.9 percent, which was above expectations for a 2.5-percent gain. Excluding food and energy, the gain was 2.6 percent, coming in above expectations for a 2.3-percent gain.