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Stock Market News for Nov 30, 2022

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U.S. stock markets closed mixed on Tuesday as market participants wait for Fed Chairman’s speech to be delivered on Wednesday. Investors will also keenly watch several key economic data slated to release later this week. Socio-political unrest in China also remained a major concern. The Dow managed to gain marginally, while both the S&P 500 and the Nasdaq Composite posted losses for the third straight days.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) was up less than 0.1% to close at 33,852.53. Notably, 17 components of the 30-stock index ended in positive territory while 13 in negative zone. The major gainer of the blue-chip index was American Express Co. (AXP - Free Report) , shares of which advanced 2.4%. American Express currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The tech-heavy Nasdaq Composite finished at 10,983.78, sliding 0.6% due to weak performance of large-cap technology stocks.

The S&P 500 fell 0.2% to end at 3,957.63. Six out of  11 broad sectors of the benchmark index closed in positive territory, while five in red. The Energy Select Sector SPDR (XLE) and the Real Estate Select Sector SPDR (XLRE) gained 1.5% and 1.7%, respectively. On the other hand, the Technology Select Sector SPDR (XLK) dropped 1%.

The fear-gauge CBOE Volatility Index (VIX) was down 1.4% to 21.89. A total of 9.6 billion shares were traded on Tuesday, lower than the last 20-session average of 11.2 billion. The S&P 500 posted three new 52-week highs and two new 52-week lows. The Nasdaq Composite registered 68 new 52-week highs and 183 new 52-week lows.

Markets Wait for Powell’s Speech

On Nov 30, Fed Chairman Jerome Powell will deliver lecture at the Hutchins Center of the Brookings Institution on monetary and fiscal policies. Market participants will keenly watch Powell’s speech to get an idea what the central bank is thinking about future course of the interest rate movement.

Recently, Fed officials have given divided opinion regarding the magnitude of future interest rate hike. Investors are unsure whether the terminal interest rate will stay below the 5% threshold or go beyond that level. Uncertainty prevails regarding the expected time of the first interest rate cut too.

Socio-Political Unrest in China

Ongoing socio-political unrest in China likely to have a major negative impact on global economy, especially, the U.S. economy. China is the source of the global supply-chain system, which as already devastated during the pandemic-era. The destruction of the supply-chain system is the primary reason for the current inflationary pressures across the globe. This has led major central banks to adopt tighter monetary control with higher interest rate regime.

In the United States, the inflation is currently at near 40-year high. The Fed has raised the benchmark interest rate by 3.75% so far this year with more rate hike to come. U.S. corporate giants, particularly, the tech behemoths, are very much dependent on Chinese supply of low-cost inputs. Moreover, China is the largest market for U.S. high-end products.

Economic Data

The Conference Board reported that Consumer Confidence Index for November came in at 100.2%, marginally higher than the consensus estimate of 100%. October’s reading was lowered marginally to 100.2% from 100.5% reported earlier.

The Present Situation Index—based on consumers’ assessment of current business and labor market conditions— dropped to 137.4% in November from 138.7% last month. The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions— fell to 75.4% in November  from 77.9% in October.

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index  reported a 10.6% year over year gain in September, down from 12.9% in August. The 10-City Composite increased 9.7% year over year in September, down from 12.1% in the previous month. The 20-City Composite posted a 10.4% year over year gain in September, compared with 13.1% in August.

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