Daily market snapshot

• Stocks close higher – Major equity markets rose on Tuesday, with the S&P 500 and Nasdaq reaching record highs. Sector performance was mostly lower, as communication services, technology and consumer discretionary stocks led the broader market higher. In global markets, Asia was up, as South Korea and Taiwan technology stocks rallied on new U.S. restrictions on artificial intelligence (AI) chips and components to China. Markets will be focused on the political tension in South Korea, where the president instituted martial law, then subsequently withdrew the declaration. The U.S. dollar dropped versus major currencies. In the commodity space, WTI oil and gold traded higher*.
• Job openings higher than expected – Job openings rose to 7.7 million in October, above estimates and the prior month's figure, both of which were about 7.4 million. The number of people voluntarily leaving their jobs (quits) also increased to 3.3 million, typically indicating confidence in employment prospects, while layoffs were little changed**. These readings reflect a healthy labor market, which should be supportive of consumer spending going into the shortened holiday shopping season and the soft-landing narrative for the economy, in our view. Total nonfarm payrolls will provide a deeper look at the labor market on Friday, with forecasts calling for 215,000 jobs created in November, up from just 12,000 that was impacted by weather and labor strikes in October. The unemployment rate is expected to hold steady at 4.1%*.
• Bond yields tick up – Bond yields rose, with the 10-year Treasury yield at 4.22%, adding to the broader trend higher in recent months. Bond markets have reduced expectations for Federal Reserve (Fed) easing to a slower and shallower path as the moderation in inflation has slowed. Markets are currently pricing in three additional Fed interest-rate cuts over the next seven months, which would put the fed funds rate in the 3.75% - 4.0% range. We agree that the Fed will likely continue cutting rates to move toward a more neutral stance, which should support continued economic expansion.

Brian Therien, CFA
Investment Strategy

^{Source: *FactSet ** U.S. Bureau of Labor Statistics}

• Stocks start the month higher – Major equity markets closed higher on Monday, with large-cap stocks leading small- and mid-cap stocks. Sector performance was mixed, as communication services and consumer discretionary stocks posted the largest gains. In global markets, Asia was up on China's manufacturing purchasing managers index (PMI) for November rising to 51.5, reflecting expansion and beating estimates calling for 50.5*. Europe was also higher, as the eurozone unemployment rate for October held steady at 6.3%, as expected. Bond yields were higher, with the 10-year Treasury yield at about 4.19%. The U.S. dollar advanced versus major currencies. In the commodity space, WTI oil traded higher, while gold was down*.
• Market to focus on the labor market this week – Job openings will be released on Tuesday, with estimates pointing to a modest decline to 7.42 million in October, down from 7.44 million the prior month. Job openings have remained higher than total unemployment of about 7.0 million, although the excess has been steadily narrowing**. Total nonfarm payrolls will be released on Friday, with forecasts calling for 200,000 in November, up from just 12,000 that was impacted by weather and labor strikes in October. The unemployment rate is expected to tick up to 4.2%, from 4.1%*. These forecasts, if realized, reflect a resilient labor market that is gradually cooling, which is supportive of continued moderation in inflation and the soft-landing narrative, in our view.
• Manufacturing readings beat estimates – The Markit Manufacturing Purchasing Managers' Index (PMI) rose to 49.7 in November, above forecasts calling for 48.8. The Institute for Supply Management (ISM) Manufacturing Index also rose to 48.4 in November, beating estimates pointing to 47.5. PMI and ISM are diffusion indexes, with readings above 50.0 reflecting expansion. While both readings still reflect modest contraction, the trend has improved in recent months, which is supportive of resilient economic growth, in our view.

Brian Therien, CFA
Investment Strategy

^{Source: *FactSet ** U.S. Bureau of Labor Statistics}

• Stocks finish higher, capping a strong month: Equity markets finished higher on Friday and capped off a strong month of performance, with the S&P 500 higher by nearly 6% in November.* Leadership was broad-based today, with most sectors of the S&P 500 finishing higher, led by information technology and consumer discretionary.* Overseas, Asian markets were mixed overnight, while European markets were mostly higher following a lower-than-expected eurozone inflation report.* Bond yields ticked lower today, with the 10-year Treasury yield falling to 4.19%, while the 2-year yield closed around 4.17%.* In the commodity space, oil prices ended lower, with WTI crude oil just below $69 per barrel, while gold was up roughly 0.7%.*
• Busy economic week ahead: The week ahead will be a busy one from an economic perspective. We'll get a read on U.S. economic activity with the release of the ISM services and manufacturing PMI's, as well as a look into recent labor-market trends, with all eyes focused on Friday's nonfarm-payroll report for November. On the growth front, the ISM manufacturing PMI is expected to improve to 48 but remain in contraction (reading below 50), while the ISM services PMI is expected to remain well into expansion at 55.4.* Turning to the labor market, expectations are for nonfarm payrolls to rise by 200,000, well above the prior months 12,000 gain, which was negatively impacted by the Boeing machinist strike and hurricanes Helene and Milton.* The unemployment rate is expected to tick higher to 4.2%, up from 4.1% in October.* We expect labor-market conditions to remain healthy over the coming year, providing support to consumer spending and helping to extend the economic expansion.  
• Equity markets are on strong footing entering December: Stocks are on pace for another year of strong returns, with the S&P 500 higher by more than 27% year-to-date including dividends.* The healthy returns have been driven by broad participation across a variety of different sectors, with each sector except health care higher by 11% or more this year.* Additionally, S&P 500 earnings are on pace to grow at a healthy 9% clip in 2024 after less than 1% growth in the prior year.* Looking ahead, December has historically been a strong month for stock returns. Since 1970, the S&P 500 has on average gained 1.7% in the month of December, with returns positive 76% of the time.** While there is no guarantee history will repeat itself this year, this could offer investors reason for optimism as we approach the final month of 2024.

Brock Weimer, CFA
Associate Analyst

^{*FactSet **Morningstar Direct and Edward Jones. S&P 500 total return.}

Happy Thanksgiving!

Wednesday, 11/27/2024 p.m.

• Stocks finish lower: Equity markets closed lower Wednesday with the S&P 500 snapping a streak of seven consecutive sessions with positive returns.* Real estate and health care were the top performing sectors while technology was a laggard following mixed earnings results from Dell Technologies after the market close yesterday.* Overseas, European markets traded lower while Asian markets were mixed overnight with Japan's Nikkei logging a modest decline while equity markets in China were higher.* On the economic front, the second preliminary estimate for third-quarter GDP growth was in-line with expectations and unchanged from the initial estimate of 2.8%.* Inflation data was in focus today as well with personal consumption expenditures (PCE) inflation in-line with expectations for both core and headline PCE. Bond yields finished lower with the 10-year Treasury yield falling to 4.25% and the 2-year Treasury yield ticking down to 4.23%.*
• Inflation data in-line with expectations : Inflation data was back in focus today with the release of October personal consumption expenditures (PCE) inflation. Headline PCE rose by 0.2% in October and 2.3% over the past 12-months, both of which were in-line with expectations. Core PCE rose by 0.3% in October and 2.8% over the past 12-months, also both in-line with expectations. Markets are pricing in a 66% probability of another 0.25% rate cut at the Fed's December 18 meeting.*** In our view, another 0.25% cut in December is likely, however with the U.S. economy on strong footing and the potential for inflationary fiscal policy down the road, the Fed will likely take a more gradual approach to rate cuts in 2025.
• Strong returns across multiple asset classes provide investors reasons to be thankful: With the Thanksgiving Holiday approaching, investors with well-diversified portfolio's have plenty to be thankful for. The past 12-months have seen above-average returns across a variety of different asset classes and regions, building on strong performance in 2023. U.S. large-cap stocks have gained over 33% in the past twelve months, well above the 20-year annualized growth rate of just over 10%.** U.S. small-cap and mid-cap stocks have seen strong returns as well, each higher by over 34%.** Despite underperformance more recently, international stocks have managed healthy returns with international developed large-cap stocks higher by roughly 11% and emerging-market stocks up roughly 14%.* Additionally, U.S. investment-grade bonds have posted a gain over 7% in the past 12-months despite a spike in yields more recently. While it will be difficult to replicate the strong performance of the past 12-months, we see broad leadership as a theme that continues to play out in the months ahead, emphasizing the importance of maintaining a well-diversified portfolio aligned to your long-term goals.

Brock Weimer, CFA
Associate Analyst

^{*FactSet **Morningstar Direct. Total Return in USD. Returns through 11/26/2024. ***CME FedWatch Tool}