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Slight Relief Rally Ahead of Thanksgiving Holiday

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This is the last of the market summary pieces in this space until Friday morning. We all here at Zacks will be enjoying the Thanksgiving Day holiday Thursday, taking advantage of markets closing tomorrow, as well. And we were nearly able to report across-the-board gains among main market indexes today, though the Dow came up just short, hitting the closing bell -0.02% — it’s first trading day lower on the week thus far.

The S&P 500 barely eked out a fresh all-time closing high to 4701.5, +0.23% on the day. The Nasdaq bested the other indexes, +0.44%, though is still on a downward trajectory for the week. The small-cap Russell 2000 rose +0.15%, it’s first positive trading day of the last five.

We’ve seen big moves outside Wall Street of late which have had direct implications on the stock market: President Biden’s renomination of Fed Chair Jay Powell put to rest any type of speculation of a shake-up at the Fed; Europe grapples with the latest wave of Covid, particularly in Germany, Austria and the Netherlands; and a heating up of concerns about inflation in the latest Fed meeting, according to FOMC minutes released this afternoon.

That’s before mentioning the bevy of economic data that hit the tape ahead of the open today. On balance, it would seem market participants are riding a slight relief rally from profit-booking we’d seen earlier in the week.

After the market opened, we saw still more important data, including October’s Personal Income report, which saw a nice jump to +0.5% on the month, more than double the +0.2% expected and a nice bounce-back from the previous month’s disappointing -1.0%. Real Disposable Income, however, still posted a negative -0.3% — though still an improvement from September’s -1.6%.

Nominal Consumer Spending also more than doubled expectations to +0.7%, also for October, from +0.3% previously. Core Inflation came in-line with expectations to +0.4% last month, and double the +0.2% reported previously. Again, as with the big bounce we saw in market trading from September to October, a rally in economic metrics is becoming apparent with higher levels of data points coming in. Year over year, Core Inflation reached +4.1%, also in-line, up from the +3.7% reported the month previous.

The University of Michigan Consumer Sentiment survey also came in today for October, notching down a bit to 71.7 from an upwardly revised 72.8 the previous month. Both figures are decidedly mid-level of the current cycle, which saw April of this year bring in 88.3 while August’s 70.3 represents a multi-year low. Even these higher headline numbers have a ways to go, however, until they reach February 2020’s 101.0 — the last full read prior to the assertion of the Covid pandemic on the U.S. economy.

We wish all our readers a happy, healthy and safe Thanksgiving Day tomorrow. Our reporting will continue first thing Friday morning, ahead of our half-day of market trading on what may still be known as Black Friday.

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