At Clare Market Investments, LLC, we understand the importance of staying informed about the latest economic and market developments. November proved to be a remarkable month for long-term investors, marked by pivotal events like the presidential election, Federal Reserve rate decisions, and evolving economic indicators. Here’s a detailed look at the market's performance and what it could mean as we approach the end of 2024.

Market Recap: Major Stock Indexes Shine

November delivered exceptional results for U.S. stocks. The presidential election and positive market sentiment propelled the S&P 500 to a 5.73% gain, the Nasdaq 100 to a 5.23% increase, and the Dow Jones Industrial Average to a remarkable 7.54% rise. This marks six positive months out of the last seven for the S&P 500, reinforcing a robust trend for long-term investors.

Federal Reserve Actions and Interest Rates

On November 7th, the Federal Reserve announced a 25-basis-point rate cut, bringing the target lending range to 4.50%–4.75%. This decision follows a larger cut in September and reflects the Fed’s commitment to supporting the labor market.

Market expectations are now leaning toward another 25-basis-point cut at the December meeting, with a 66% probability. This could provide further momentum for the markets as we head into the new year.

Treasury Yields Offer a Silver Lining

The 10-year Treasury Note Yield dipped slightly in November, closing at 4.177%, down from October’s 4.285%. This modest decline is welcome news for potential mortgage borrowers and a positive sign for equity investors, as it eases some pressure from higher borrowing costs.

Labor Market and Inflation Updates

Labor Market Trends

October’s non-farm payroll data revealed a sharp slowdown, with just 12,000 jobs created—the weakest since 2020. However, the market responded positively, viewing this as a potential signal for further interest rate cuts. While hurricanes Helene and Milton impacted these figures, November jobs data (due December 6th) will provide more clarity.

Inflation Metrics

Inflation remained mixed in November:

• The Consumer Price Index (CPI) rose 0.2% in October, reflecting a year-over-year increase to 2.6%.
• Core CPI (excluding food and energy) increased by 0.3%, holding steady at an annual rate of 3.3%.

Shelter costs remain a persistent contributor to inflation, rising 0.4% month-over-month and 4.9% year-over-year. However, these figures align with expectations and support the likelihood of a December rate cut.

Consumer Confidence and Retail Resilience

November brought a surge in consumer confidence, with the index reaching its highest level since July 2023 at 111.7. Retail sales exceeded expectations in October, and early Black Friday data showed a 3.4% annual increase in spending. This resilience underscores the strength of consumer-driven economic growth, even amidst market noise.

Volatility Declines: A Sign of Confidence

The CBOE S&P 500 Volatility Index dropped to its lowest levels since July, signaling reduced short-term market fears. Investors are showing increased confidence, as evidenced by weak demand for put options—often used to hedge against market risk.

Looking Ahead: Planning for the Year-End

As we close out 2024, it’s crucial to review your portfolio and consult your tax advisor to make any necessary year-end adjustments. Long-term investing remains a powerful strategy for navigating market fluctuations and achieving your financial goals.

At Clare Market Investments, LLC, we are here to guide you through these decisions. Schedule a consultation today to discuss your investment strategy and ensure you’re well-positioned for success in 2025 and beyond.

Ready to take the next step? Schedule a consultation with us today to review your portfolio and prepare for the future. Let’s work together to make your financial goals a reality.