Weekly Market & Economic News Recap (Week of November 6, 2023)

• Stocks extended their November rally amid a surge in tech giants, a relatively calm session for bonds and no major surprises from Federal Reserve speakers. (Bloomberg, November 9, 2023, https://www.bloomberg.com/news/articles/2023-11-09/stock-market-today-dow-s-p-live-updates?srnd=null)

• US continuing jobless claims rise for seventh straight week. Recurring applications now stand at highest since mid-April. Initial claims ticked lower, though four-week average rose. (Bloomberg, November 9, 2023, https://www.bloomberg.com/news/articles/2023-11-09/us-continuing-jobless-claims-rise-for-seventh-straight-week?srnd=null)

• Federal Reserve officials said the US economy still hasn’t felt the full effect of past interest-rate increases, suggesting more slowing is yet to come. (Bloomberg, November 9, 2023, https://www.bloomberg.com/news/articles/2023-11-09/fed-s-bostic-says-policy-is-likely-sufficiently-restrictive?srnd=null)

• Banks are doling out fewer business loans. Commercial and industrial loan growth shrank 0.2% in September. Fed rate hikes are helping to tighten credit market conditions. (Bloomberg, November 9, 2023, https://www.bloomberg.com/news/articles/2023-11-09/growth-in-business-lending-stalls-as-banks-tighten-purse-strings?srnd=null)

• Wall Street warns of risks in push to rein in home-loan banks. May spur higher funding costs, volatility in fed funds market. Regulators are trying to drive banks to Fed’s discount window. (Bloomberg, November 9, 2023, https://www.bloomberg.com/news/articles/2023-11-09/wall-street-warns-of-risks-in-push-to-rein-in-home-loan-banks?srnd=null)

• Powell says fed to be careful, won’t hesitate to hike if needed. ‘Not confident’ policy tight enough for 2% inflation: Powell. Fed chief says policymakers will continue to ‘move carefully. (Bloomberg, November 9, 2023, https://www.bloomberg.com/news/articles/2023-11-09/powell-says-fed-won-t-hesitate-to-tighten-more-if-appropriate?srnd=null)

• Fed sees risks for banks from US office space, interest rates. Central bank says supervisors find lenders well capitalized. Officials are stepping up supervision after SVB, Fed says. (Bloomberg, November 9, 2023, https://www.bloomberg.com/news/articles/2023-11-09/fed-sees-risks-for-banks-from-us-office-space-interest-rates?srnd=null)

• US consumer long-term inflation expectations reach 12-year high. Inflation views over 5-10 years rose to 3.2% in November. University of Michigan sentiment index dropped to 60.4. (Bloomberg, November 10, 2023, https://www.bloomberg.com/news/articles/2023-11-10/us-consumer-long-term-inflation-expectations-reach-12-year-high?srnd=null)

• US State Tax Revenue Drops in Sign of Tough Budget Decisions Ahead. Revenue fell 14th straight month in September: Urban Institute. Fixes include spending cuts, tax hikes, using rainy-day funds. (Bloomberg, November 10, 2023, https://www.bloomberg.com/news/articles/2023-11-10/sliding-us-state-tax-revenue-signals-tough-budget-decisions-loom?srnd=null)

• The rapid bond rally is looking fragile. Treasury market had its worst day in six months Thursday. Buyers of dismal bond auction rewarded by next-day rebound. (Bloomberg, November 10, 2023, https://www.bloomberg.com/news/articles/2023-11-10/rapid-bond-rally-is-looking-fragile-as-fed-supply-expose-cracks?srnd=null)

• US credit-rating outlook changed to negative by Moody’s. Assessor cites risks from deficits, political polarization. Fitch, S&P previously stripped US of highest investment grade. (Bloomberg, November 10, 2023, https://www.bloomberg.com/news/articles/2023-11-10/us-s-credit-rating-outlook-changed-to-negative-by-moody-s?srnd=null)