Today in the Market (11/29/2023)

Good Evening! On Wednesday, U.S. equities were mixed as data revealed the U.S. economy expanded in Q3 at a quicker pace than originally expected.

The S&P 500 and NASDAQ both finished the day down by 0.09% & 0.16%, respectively, after being in the green for the majority of the day. The Dow Jones barely stayed in the green, rising 0.04% over the opening.

GREW BY HOW MUCH?

The numbers are in and… the U.S. continues to grow as inflation continues to fall! The latest statistics from the Bureau of Economic Analysis indicate that the U.S. economy grew at an annualized rate of 5.2% for Q3. This figure was revised from the first estimate of 4.9% from a month ago.

The fun doesn’t stop there! The Q3 data for Personal Consumption Expenditures (PCE) revealed that core prices (not including categories like food and energy) increased by 2.3%, which came in lower than expected by 2.4%. Market watchers love this because it indicates that inflation is steadily decreasing and moving closer to the Fed’s ultimate objective of achieving 2% inflation.

Going Forward! Investors widely hold the belief that the Fed has ceased raising interest rates and see the central bank’s present approach as sufficiently restrictive to decelerate economic growth and stabilize prices. Currently, financial markets are factoring in a 78% probability of a reduction in interest rates during the Fed’s meeting in May.  According to the CME FedWatch Tool, the likelihood of a reduction was just 41% one month earlier.

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