NEWS
Bulls Take A Much-Needed Break

An uptick in inflation and some pre-holiday profit-taking weighed on markets, specifically as big tech and its peers sold off on Dell’s lackluster earnings guidance. It’s been a historic year in the markets, with many expecting the Thanksgiving festivities to spark even more speculation in crypto and other risk assets into the end of the year. 👀

Today's issue covers team transitory’s rising doubts, crazy coffee prices hitting consumers, and Nvidia’s precarious pre-holiday position. 📰

Here’s the S&P 500 heatmap. 6 of 11 sectors closed green, with real estate (+0.69%) leading and technology (-1.35%) lagging.

And here are the closing prices: 

Most bullish/bearish symbols on Stocktwits at the close: 📈 $CPIX, $DELL, $URBN, $OTLK, $CYCN 📉 $APLT, $EVTV, $ARWR, $BMRA, $HPQ*

*If you’re a business and want to access this data via our API, email us.

ECONOMY
Team Transitory Faces Some Trouble 😬 

The latest estimate indicated that U.S. GDP grew at a 2.8% annualized rate during the third quarter, with business investment revised upwards and consumer spending ticking slightly lower to 3.5% YoY.

The U.S. economy continues to show durability despite higher interest rates, global activity concerns, and overall political uncertainty. However, lingering price pressures accompany that durability. 👎️ 

October’s core personal-consumption-expenditures price index (PCE) ticked up 0.27% MoM and 3.3% YoY, representing its largest sequential increase since March. The Fed’s preferred inflation metric remains elevated due to services prices, which rose 0.4% MoM, offsetting a 0.1% decline in goods prices.

Wall Street Journal chief economics correspondent Nick Timiraos shared a chart showing the YoY change and the six—and three-month annualized rates stabilizing above the Fed’s 2% inflation target and turning higher. 🔺

Consumer spending was still solid during October, while personal incomes also jumped double the 0.3% rate expected by analysts. The labor market is still strong enough to help keep wage growth above inflation, raising concerns that further cuts by the Fed into 2025 could contribute to a resurgence in prices.

While 2024 was the year of looking past inflation, recent data suggests that “Team Transitory” may have a tougher time reaching their ultimate goal than anticipated. We’ll see if that starts to matter for the stock market and other risk assets again or if we can just continue to climb the “wall of worry.” Time will tell. 🤷 

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