Stock markets – Stock markets rose for the seventh consecutive week as inflation has moderated, and bond yields and mortgage rates have dropped. On Thursday the Personal Consumption Expenditures Price Index (PCE), a gauge of inflation that the Fed relies on when setting monetary policy came in at a 3% year-over-year increase, the core PCE was 3.5%. That marked the smallest increase since 2021. On Friday Fed Chairman Powell suggested that the Fed may be done raising rates, but said it was “too early to guess when rates will fall.” Even speaking about rates falling was something that nobody could have imagined Powell discussing just two months ago. He also spoke about progress in cooling inflation and the jobs market. Stocks jumped on Thursday and Friday. The Dow gained almost 800 points in the two days. Next Friday the November jobs report will be released. Investors are eagerly awaiting the number of new jobs created and the amount that wages have increased. The Dow Jones Industrial Average closed the week at 36,254.50, up 2.4% from 35,390.15 last week. It is up 9.4% year-to-date. The S&P 500 closed the week at 4,594.63, up 0.8% from 4,559.34 last week. It is up 19.7% year-to-date. The Nasdaq closed the week at 14,350.03, up 0.7% from 14,250.85 last week. It is up 37.1% year-to-date.
U.S. Treasury bond yields – The 10-year treasury bond closed the week yielding 4.22%, down from 4.47% last week. The 30-year treasury bond yield ended the week at 4.40%, almost unchanged from 4.60% last week. We watch bond yields because mortgage rates follow bond yields.
Mortgage rates -The Freddie Mac Primary Mortgage Survey reported that mortgage rates for the most popular loan products as of November 30, 2023, were as follows: The 30-year fixed mortgage rate was 7.22%, down from 7.29% last week. The 15-year fixed was 6.56%, down from 6.67% last week. Rates were lower at the end of the week. The 30-year dropped under 7% on Friday.
Have a great weekend!