Stocks ticked slightly higher in mid-morning trading on Tuesday as cautious investors assessed signs the roaring November rally could be overdone.
The Dow Jones Industrial Average (^DJI) gained about 0.4% while both the benchmark S&P 500 (^GSPC) and tech-heavy Nasdaq Composite (^IXIC) moved about 0.2% higher after a downbeat close to start the week.
With the end of November in sight, investors are weighing whether a pullback is coming after a red-hot surge put stocks on course for their best monthly performance in more than a year.
The bullish sentiment comes as investors place bets the Federal Reserve is done raising interest rates — although two separate speeches from Fed Governor Michelle Bowman and Fed Governor Christopher Waller on Tuesday signaled the central bank has differing opinions on whether interest rates need to go higher.
As Yahoo Finance’s Jennifer Schonberger reports, Bowman said she thinks the Fed will have to raise rates further to bring inflation down “to our 2% target in a timely way.”
But Waller said he is becoming more confident rates are at the right levels even though he needs more data to be sure.
Investors may well be treading carefully ahead of two key batches of economic data due later this week. Wednesday brings an update on GDP in the third quarter, while Thursday’s PCE reading on consumer inflation — the Federal Reserve’s preferred gauge — will set expectations for policymakers’ next rate move.
New data out from The Conference Board on Tuesday showed consumer confidence increased in November. The Conference Board’s index jumped to 102.0 in November, up from a downwardly revised 99.1 in October.
Despite the improvement, however, the Expectations Index remained below 80 for a third consecutive month — a level that historically signals a recession within the next year, according to The Conference Board.
Read more: What the Fed rate-hike pause means for bank accounts, CDs, loans, and credit cards
Meanwhile, investors are paying keen attention to how retailers are faring now that Black Friday has kicked off the holiday shopping season.
On Cyber Monday, consumers spent $12.4 billion online, up 9.6% compared to last year, per Adobe Analytics’ data on e-commerce. As people looked to cash in last minute deals between 10 to 11 PM eastern, $15.7 million was spent every minute.
In commodities, oil prices gained as the dollar weakened — pulling down prices for holders of other currencies — and expectations grew for more output cuts at this week’s delayed OPEC+ meeting. Brent crude futures (BZ=F) traded above $81 per barrel, while West Texas Intermediate (WTI) crude futures were above $76.
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AIPO rumblings suggest investors could be feeling risky again
Could the IPO market return to its former glory in 2024?
As Yahoo Finance’s Josh Schafer reports:
Fast-fashion retailer Shein has confidentially filed for an initial public offering in the US, according to multiple press reports Tuesday. This comes as social media website Reddit and Kim Kardashian’s clothing brand Skims are also exploring options to go public in 2024, according to Bloomberg.
The latest developments hint at a larger theme: 2024 could be the year the IPO market makes a meaningful comeback.
“We’re more optimistic about the real reopening of the IPO market in 2024 than in 2023,” Goldman Sachs asset management global co-head of private equity Michael Bruun said during a media a roundtable on November 7.
Many had thought recent public debuts like chip giant Arm (ARM) and Instacart (CART) would bring the return of IPOs earlier this year. Data from Dealogic showed 35 deals were completed in the third quarter, down from the 95 deals seen during the same quarter in 2021 (The market bottomed in 2022).
Read more here.
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Cyber Monday hits new record
US consumers spent billions to kick start the holiday shopping season, setting a new spending record.
As Yahoo Finance’s Brooke DiPalma reports:
On Cyber Monday, consumers spent $12.4 billion online, up 9.6% compared to last year, per Adobe Analytics’ data on e-commerce. As people looked to cash in last minute deals between 10 to 11 PM eastern, $15.7 million was spent every minute.
This comes after Black Friday brought in a record breaking $9.8 billion, up 7.5% compared to a year ago, while the following weekend saw $10.3 billion spent.
The total for Cyber Week — the five-day period between Thanksgiving and Cyber Monday — amounted to $38 billion, up 7.8% year-over-year. Retailers’ plans to push harder on discounting may have worked, after consumers buckled down on spending amid rising interest rates, dwindling savings, the return of student loan payments, and credit card debt.
“Prices are coming down and then we see discounts on top of that,” Patrick Brown, Adobe VP of Growth & Insights said on Yahoo Finance LIVE. These two factors combined to create “a huge increase in demand.”
“Consumers are feeling like they’ve gotten a better deal,” he said.
Discretionary categories, many of which were affected by the slowdown in spending, got the biggest boost on Monday. They include apparel, which saw a 189% jump in online sales compared to October 2023, followed by appliances, toys, furniture, electronics, jewelry and sporting goods.
Read more here.
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Consumer confidence ticks higher in November
New data out from The Conference Board on Tuesday showed consumer confidence increased in November.
The Conference Board’s index jumped to 102.0 in November, up from a downwardly revised 99.1 in October. Average 12-month inflation expectations retreated back to 5.7% after a one-month uptick to 5.9%.
“Consumer confidence increased in November, following three consecutive months of decline,” Dana Peterson, chief economist at The Conference Board, said in a news release. “This improvement reflected a recovery in the ‘Expectations Index,’ while the ‘Present Situation Index’ was largely unchanged.”
Despite the improvement, however, the ‘Expectations Index’ remained below 80 for a third consecutive month — a level that historically signals a recession within the next year.
Although consumer fears of an impending recession retreated slightly, hitting the lowest levels seen this year, two-thirds of consumers surveyed in November still believe a recession to be “somewhat” or “very likely” to occur over the next 12 months, according to The Conference Board.
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Stocks hug flatline
Stocks opened flat on Tuesday as the November rally appears to be running out of stream.
The benchmark S&P 500 (^GSPC) dipped around 0.1% while the Dow Jones Industrial Average (^DJI) and tech-heavy Nasdaq Composite (^IXIC) both hugged the flatline after a downbeat close to start the week.
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