The S&P 500 and Dow Jones powered to new highs last week, a winning week as banks, especially JPMorgan Chase and Wells Fargo, started off corporate earnings season with promise. Stocks registered a fifth straight week of gains. For last week, the S&P 500 and Nasdaq both jumped 1.1% and the Dow Jones gained 1.2%. Mixed inflation data seems to be signaling that the Federal Reserve may be able to reach its 2% inflation goal soon, without slowing down the economy. There is a high probability that the Federal Reserve will reduce interest rates by 0.25% on November 7th and an additional 0.25% on December 18th, which could assist in an end-of-year rally for financial markets.
Economic reports from last week came back mixed:
•Consumer Credit - lower than expectation
•Small Business Optimism - higher than expectation
•Inflation (Consumer) - higher than expectation
•Inflation (Producer) - lower than expectation
•Consumer Sentiment - lower than expectation
•Jobless Claims - higher than expectation
This week, investors will look for guidance from economic reports like Manufacturing, Retail Sales, Housing and Jobless Claims.
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