Week Ahead Market Commentary – November 4, 2024
Spooky October Ends On A Scary Note—What’s Next?
Last week, the equity and bond markets were spooked by earnings, inflation, higher interest rates, and concerns over tomorrow’s presidential election. On the last day of trading for October (a Halloween shocker!), stocks declined sharply, with the S&P 500 down 1.9% and the Nasdaq 100 down nearly 2.5%. What happened? As earnings continued to come in, the Core PCE (Personal Consumption Expenditures) Index—which measures inflation—came in slightly above what the market expected (2.7% vs 2.6%). However, the equity market was very overbought, so the correction was not surprising. The seasonals for the equity market are very bullish for the month of November, but a correction is underway and may not be completed until after both the election and the interest rate decision by the Federal Reserve (Fed), set for this Thursday. For this market move, we see a limited downside of 5% and believe that this correction is a buying opportunity for investors.
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