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Weekly market wrap Nov. 24, 2017: Stock indices gain on strong Black Friday sales
12/13/2017 7:25:43 PM
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By Fund Library News Wire  | Friday, November 24, 2017


 

By Mike Keerma

With third-quarter earnings beating expectations and major retailers getting a boost from the Black Friday sales push, the major North American equity indices posted weekly gains for the first time in three weeks. Ebullient retail sales numbers buoyed markets as online U.S. retail giant Amazon.com Inc. (NASDAQ: AMZN) and bricks-and-mortar retailer Macy’s Inc. (NYSE: M) led the markets higher, advancing 5.3% and 3.5%, respectively, on the week. An uptick in the U.S. rate of inflation in October raised market expectations of a Federal Reserve Board rate hike in December, supported by a flattening yield curve, with the spread between the 2-year U.S. Treasury note and the 30-year bond narrowing to 0.60 of a percentage point, its tightest spread in a decade. The S&P 500 Composite Index advanced 0.9% on the week, while the Nasdaq Composite Index gained 1.6%. Toronto’s benchmark S&P/TSX Composite Index gained 0.7% on the week, as energy stocks rose on a 4.3% weekly advance in the price of crude oil.

Canada’s inflation rate remained tame in October, with a monthly gain of 0.1% over September, an annual 1.4% rate. Energy prices weighed heavily on the consumer price index in October, but that is likely to reverse when the November numbers come in. Canada’s inflation rate remains well below the Bank of Canada’s target 2%, giving the Bank of Canada less reason to implement a rate hike before next spring.

In the U.S. the headline consumer price index rose at a monthly 0.1% rate (2% year over year), while the core rate, which strips out food and energy prices, rose 0.2% in the month (an annual 1.8% rate). With U.S. inflation persistently below the Fed’s 2% target, some observers see little reason for the Fed to hike rates in December, despite telegraphing such a move in earlier comments. However, with a strong labor market, low unemployment, decent GDP growth, and the potential for a major tax cut by the Trump Administration, the Fed may well stick to its guns and hike rates again next month.

Check Fund Library’s Market Activity page regularly for active updates on key market indexes and commodities.

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The foregoing is for general information purposes only and is the opinion of the writer. No guarantee of investment performance is made or implied. It is not intended to provide specific personalized advice including, without limitation, investment, financial, legal, accounting or tax advice.

 
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