Best Month Since July 2022

November 30, 2023

November has historically been one of the better months for stocks and marks the beginning of what is traditionally a good 3-month period for the market.  Coming into November the market was on a 3-month losing streak and we said if the war did not expand outside Gaza and/or if interest rates were to ease, we would expect the market to react positively.  We got both, the war has stayed regionalized and interest rates, as measured by the 10-year Treasury, dropped to the lowest level since mid-September.  There is a growing belief the Federal Reserve is done raising interest rates and is orchestrating the much desired “soft landing”.  We noted in last month’s update that at the end of October we had reduced our “insurance” and invested some of the “cash” we had on the sidelines.  At month’s end November was the best monthly gain for the market since July 2022.  The S&P 500 was up 8.9% and is now 19% higher for the year and the more representative S&P Equal Weighted index gained 9.2% and is up 5% this year.  The pickup in performance for the Equal Weighted index is good news as it indicates a broadening of the rally.  Oil had a very volatile month, fluctuating 10% before closing with a loss of 6.4% and is now down 2% this year.  Lower interest rates typically mean a lower dollar and that is good for gold.  The precious metal rallied to a 6-month high, gaining 2% in November and 6.8% for the year.

The month began on a Wednesday with investors wondering if the rally during the last 2-days of October would continue.  On the first day of the month the Federal Reserve decided to leave interest rates unchanged and hinted they may be done raising rates.  At the end of the week the government jobs report confirmed the economy is slowing and that added to optimism that drove the S&P 500 nearly 4% higher in just the first 3 days of trading.  The 5-days of trading this week produced the best week for stocks in 2023.  The first full week began quietly with investors trying to determine the next move for the market.  The S&P 500 did move higher during the first 3 days of the week and that 8-day winning streak was the longest for the widely followed index since 2021.  Fed Chief Powell made cautionary comments on Thursday that sent the market lower, but by week’s end the S&P 500 had broken through resistance at 4400 and was up another 1.3%.  As we approached the holiday shortened Thanksgiving week, volume, and volatility both declined but better than expected CPI and PPI numbers on Tuesday generated a 2% rally that day while the rest of the week was very quiet.  At the end of the week the S&P 500 had added another 2.3%.  Thanksgiving week typically features low volume with an upward bias and that is exactly what we had this year.  The half day of trading on Friday was the lightest volume day of the year, but the S&P 500 still managed to gain another 1% for the week.  We ended an outstanding month for the stock market with the market edging higher during the last few days.

December is traditionally one of the best months of the year for stocks.  With that said, history is only a guide as we all remember the December blood bath in 2018.  It does appear the Goldilocks scenario that investors would like to see is developing. Interest rates, inflation and oil prices are declining while the economy continues to grow, albeit at a slower pace.  Worry is what we do, so we are watching mounting consumer debt and stock valuations that are above what one would like to see at this juncture.  The car title loan business is booming, and pawn shops are reporting strong business, not good signs for the overall economy.  Barring some headline making event we believe the market should move higher into the end of the year.  We would not be surprised to see a modest pullback as the market is richly valued, but many missed the big move in November so we would expect buyers to be waiting.

If you know someone who would be interested in learning more about Greenberg Financial Group, please contact us at 520-544-4909, or visit our website at www.greenbergfinancial.com. As always, the key to successful investing is to have a portfolio that is consistent with your investment objectives and risk tolerance. We invite you to listen to our weekly Money Matters radio show which airs every Sunday Morning from 8:00 AM to 10:00 AM on KNST AM 790.  You can also listen to us on iHeart radio, follow us on Twitter @gbergfinancial or on Facebook under Greenberg Financial Group.  Previous radio shows are available by going to www.iheart.com or using the iHeart app and typing Money Matters with Dean Greenberg.