Weekly Market & Economic News Recap (Week of November 27, 2023)

• Blue-Chip spreads rally as investors bet Fed is done hiking. Blue-chip spreads tighten to the lowest since February 2022. The average corporate yield-to-worst has also been falling. (Bloomberg, November 30, 2023, https://www.bloomberg.com/news/articles/2023-11-30/blue-chip-spreads-rally-as-investors-bet-fed-is-done-hiking?srnd=null)

• US economy slowed in recent weeks with inflation, labor cooling. Real consumer spending rose 0.2% after smaller September gain. Continuing jobless claims rose to 1.93 million in latest week. (Bloomberg, November 30, 2023, https://www.bloomberg.com/news/articles/2023-11-30/blue-chip-spreads-rally-as-investors-bet-fed-is-done-hiking?srnd=null)

• US pending home sales index drops to lowest level on record. Mortgage rates and lack of inventory slamming resale market. Only Northeast saw rise in pending sales among US regions. (Bloomberg, November 30, 2023, https://www.bloomberg.com/news/articles/2023-11-30/us-pending-home-sales-index-drops-to-lowest-level-on-record?srnd=null)

• Retail traders cash out on bet that market rally is nearing end. After a strong year for stocks, some investors argue trouble is lurking ahead for the tech giants that have fueled gains in 2023. (Bloomberg, November 30, 2023, https://www.bloomberg.com/news/articles/2023-11-30/big-tech-in-2024-retail-traders-sell-positions-in-apple-nvidia-microsoft?srnd=null)

• Fed, Main Central Banks should rethink crisis response, G30 says. Policymakers stuck with QE too long as inflation rose, it says. G30 warns of dangers of fiscal and financial dominance. (Bloomberg, November 30, 2023, https://www.bloomberg.com/news/articles/2023-11-30/fed-main-central-banks-should-rethink-crisis-response-g30-says?srnd=null)

• Treasuries fall as traders pare wagers on fed rate cuts in 2024. Comments by Daly and Williams leaned against earlier trend. Treasury index remains on pace for best month in 15 years. (Bloomberg, November 30, 2023, https://www.bloomberg.com/news/articles/2023-11-30/treasuries-fall-as-traders-pare-wagers-on-fed-rate-cuts-in-2024?srnd=null)

• Money-market fund assets surged to a fresh all-time high as interest rates north of 5% and traders’ pricing of the first Federal Reserve cut to its target benchmark spurred institutional investors to shift more cash to the industry. (Bloomberg, November 30, 2023, https://www.bloomberg.com/news/articles/2023-11-30/fears-of-fed-rate-cuts-drive-money-market-fund-assets-to-record?srnd=null)

• 2023 was bad for startups with bankruptcies, lower valuations. Rising interest rates hit the industry hard; job cuts followed. Silicon Valley is reeling as some 543 startups have shut down. (Bloomberg, November 30, 2023, https://www.bloomberg.com/news/articles/2023-11-30/2023-was-bad-for-startups-amid-bankruptcies-lower-valuations?srnd=null)

• US continued jobless claims jump to highest since late 2021. A proxy for those receiving benefits rose to 1.93 million. Initial claims increased in week that included Thanksgiving. (Bloomberg, November 30, 2023, https://www.bloomberg.com/news/articles/2023-11-30/us-continued-jobless-claims-rise-in-sign-of-cooling-labor-market?srnd=null)

• Consumer fatigue is setting in across the US economy. Monthly government data on consumer spending published Thursday showed a cutback in discretionary categories like cars, furniture and gym memberships to begin the fourth quarter. (Bloomberg, December 1, 2023, https://www.bloomberg.com/news/newsletters/2023-12-01/global-economy-latest-american-consumers-feel-fatigued?srnd=null)

• Powell brushes off rate-cut bets as Fed moves carefully. Chair says policy is ‘well into restrictive territory’. Central bank is prepared to tighten further if needed. (Bloomberg, December 1, 2023, https://www.bloomberg.com/news/articles/2023-12-01/fed-s-jerome-powell-says-it-s-too-soon-to-speculate-on-interest-rate-cuts?srnd=economics-v2)

• The return of striking United Auto Workers to vehicle assembly lines is seen driving a pickup in November payrolls, representing a pause in the recent trend of moderating US employment growth. (Bloomberg, December 2, 2023, https://www.bloomberg.com/news/articles/2023-12-02/us-payrolls-are-seen-picking-up-after-end-of-uaw-strike?srnd=economics-v2)