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| By Jim Nelson |
Stocks had their best performance in quite a while in November, with all three major indices breaking their three-month losing streaks.
In fact, it was such a good month for the Dow Jones Industrial Average specifically that it is now sitting at its 2023 high.
Bonds, too, did very well over the past 30 days, with the 10-year Treasury yield dropping to 4.33%, as we write. That’s well off its 5% peak five weeks ago. Remember, yields move inversely to prices.
Still, despite this reignited investment landscape, market speculators are confident the Federal Reserve will not only keep rates where they are … but that they’ll start looking at cuts in early 2024.
Take a look at the CME FedWatch Tool — something to bookmark if you are interested in investor sentiment:
This shows what interest rate speculators expect the Fed’s target rate will be at the conclusion of the May 2024 meeting. Nearly half expect a 25-basis-point reduction, while 28.9% expect even deeper cuts.
How can you square these two seemingly opposite ideas — surging stocks and expected rate cuts? Well, the Fed’s favorite indicator just posted a very mild report for October.
The Personal Consumption Expenditures Index rose just 0.2% in October, the lowest month-over-month increase since the spring.
Whether this is the “soft landing” everyone has been talking about throughout 2023, who can say?
At the very least, it seems clear that rates will remain level for at least the next month. The Federal Open Market Committee will have its December gathering in two weeks. The FedWatch Tool gives it a 99.2% chance that the target Fed Funds range will remain between 5.25% and 5.5%.
Of course, there are many different ways to play all this news and speculation. Your editors all have their own preferred takes on this economic landscape. Here’s what they have to say …
What to Do as Bank Failures Are Not Over
If you haven’t thought about the troubled banking sector in a little while, we can’t blame you. Since the spring’s upheaval, you haven’t heard much. However, our chief bank ratings guru Gavin Magor has bad news. More banks are failing. Fortunately, he knows what to do about it.
4 Startups That Thrived in Hard Economic Times
Your startup and crowdfunding ace Chris Graebe knocked the doors off the assumption that small startup companies only thrive when the rest of the economy is booming. He shares four deep dives into fabulously successful startups that began during terrible market conditions.
All this talk about interest rates and bond yields has our resource guru Sean Brodrick thinking about gold. He sees three major reasons why gold has already broken the $2,000 mark and why it has a lot further to go.
Forget Altman … This Is the Complete AI Investment to Buy Now
Despite lower trading volumes over the Thanksgiving holiday, there was one major news story that had investors scrambling — the sacking and rehiring of OpenAI’s Sam Altman. Tech expert Jon Markman has the story and the real winner of the AI trend. Hint: It’s not what you expect.
Don’t Miss the Next 69% & 127% Gains
Almost no investment has had a better 2023 than cryptocurrencies. And they aren’t done yet. Crypto expert Beth Canova takes you inside how this market works, giving you the tools to avoid missing out on the next big rally for these digital currencies and platforms.
That’s all for this week. Have a great weekend!
Until next time,
Jim Nelson
Managing Editor
Weiss Ratings Daily
