Week of November 7, 2022

U.S. stocks finished last week on a high note, with the Dow finishing Friday up 400 points, or 1.26%. The S&P 500 and Nasdaq also rallied, up 1.36% and 1.28%, respectively. Despite Friday’s rally, all three benchmarks finished down for the week and the Dow ended a four-week winning streak and the S&P 500 and Nasdaq ended two-week winning streaks.

At the conclusion of last week’s Federal Open Market Committee (FOMC) meeting, Federal Reserve Chairman Jerome Powell announced the decision of another 75-basis point (0.75%) increase, taking the federal fund rate to a target range of 3.75% - 4.00%.

Job growth was better than expected in October despite the Federal Reserve’s recent interest rate increase. Although there have been six interest rates hikes in 2022, the labor market continues to show strength and remains tight. On Friday, the Labor Department reported nonfarm payrolls increased 261,000 for the month of October, beating the 205,000 that was estimated. Although payroll numbers were better than expected, it still marked the slowest pace of job gains since December 2020. Additionally, the unemployment rate increased to 3.7%, higher than the 3.5% estimated.

Monday kicks off with the newest round of earnings reports to be released throughout the week. Other important data arrives Wednesday, with the wholesale inventories and sales and weekly mortgage applications. Finishing out the week for economic data will be the University of Michigan’s consumer sentiment index.