Markets staged a strong rebound during Thanksgiving week, recovering from earlier in the month. Renewed expectations for a Federal Reserve rate cut in December helped fuel broad gains, with technology stocks leading a sharp rally that pushed the NASDAQ to its best weekly performance in several months. As more delayed economic data becomes available following the government’s reopening, stock traders gained a clearer picture of economic momentum: jobless claims declined, while retail sales and durable goods orders strengthened. However, producer prices moved higher, reinforcing theories about persistent inflation. All market sectors ended the week in positive territory, led by consumer discretionary, communication services, materials, and technology. Treasury yields continued to slip on rising expectations of a rate cut, and crude oil prices remained under pressure due to oversupply.
Last Week’s Economic News
- Retail and food services sales rose in September and were 4.3% above the September 2024 level.
- The Producer Price Index (PPI) increased in September. Producer prices rose 2.7% over the past 12 months.
- Federal finances began the 2026 fiscal year with a $284 billion deficit in October, following a $198 billion surplus in September. October receipts totaled $404 billion, including $217 billion from income taxes and $31 billion from customs duties. Medicare and Social Security combined accounted for over 41% of federal outlays.
- Durable goods orders rose in September. Over the 12 months ended in September, durable goods orders increased 7.3%.
- Unemployment insurance claims for the week ended November 22 fell to 216,000, down 6,000 from the prior week.
- The national average price of regular gasoline was $3.061 per gallon on November 24.
Eye on the Week Ahead
More economic data has begun to flow following the end of the government shutdown, but much of what has been released covers September. Stock traders will be watching closely for updates on October employment, inflation, and spending once those reports are made available.
Have a nice week!
Sincerely,
Robert G. Carpenter