The holiday week brought important data, including October’s PCE inflation at 2.3% annually and core inflation at 2.8%, which could influence the Fed’s December decision.

It was a relatively quiet week ahead of Thanksgiving, with U.S. stocks ending on a positive note despite mixed economic signals. The Conference Board’s Leading Economic Index continued its decline, pointing to potential recessionary risks, while existing-home sales saw their first annual increase since 2021, hinting at a possible market recovery. Labor market conditions remained steady, with initial claims showing slight improvement as investors await the next monthly jobs report.

This week’s economic data reflected a resilient but uncertain U.S. economy. Stocks sold off as concerns grew that strong economic data might delay Federal Reserve rate cuts. Recession indicators remain mixed, with bullish signals from services and employment offset by bearish manufacturing and leading indicators.

U.S. stocks reached new highs after the presidential election and a 25-basis point rate cut by the Federal Reserve. Donald Trump was declared president-elect after winning key swing states, and Republicans took control of the Senate. The Fed’s rate cut brought funds rate down. Meanwhile, the ISM Services Index showed strong growth in October, despite disruptions from Hurricane Helene.

Stocks wrapped up October on a negative note, as last week delivered a series of important economic data points. The October jobs report showed the slowest hiring pace since 2020…

October was a mixed month for markets, but our market cycle assessment remained bullish. Despite this reading, we maintain concerns that the market may be cooling from a bullish run.