Wow! It was another good week for a stock market bull like me. Major US benchmarks captured their third straight week of gains after the latest inflation data showed prices cooled down last month and investors continue to hope that the Fed won’t raise rates in December.
So far in November, the S&P 500 has rebounded more than +7%. The longer end 10-year Treasury yield ended the week at 4.44% and the shorter end 2-year yield closed at 4.90%. The CBOE Volatility Index on Friday was trading around 36% below a recent peak on October 20. The so-called VIX is down roughly the same amount year to date. Elsewhere, the latest week was volatile for oil prices.
I don’t care about the feelings of some of my emotional clients. They can say whatever they like but I’m not buying what they are selling. The economy is not rainbows and puppy dogs for the poor and screwed up middle class but the trend is up. I only care about making money from the markets. We follow the reality of the market. I never invest according to what should be happening.
The positive sentiment spread to Asia, where Japan’s Nikkei 225 surged +3.1% despite weak third quarter gross domestic product figures. China’s Shanghai Composite added +0.3% as investors digested some economic data.
The highly-anticipated meeting between President Biden and his Chinese counterpart Xi Jinping ended with agreements to open high-level dialogue. While Xi’s comments aimed at reassuring the business community, Myron Brilliant, former head of international relations for the US Chamber of Commerce, said times have changed. “Bottom line is that American business leaders don’t want to be caught in a game of chess between China and the US governments.”