Medicare Agent News: A Scary Signal from Bonds

Tuesday, November 29, 2022

A Scary Signal from Bonds

By Alex Eule | Tuesday, November 29

No News Is Good News. After a rough opening to the week, investors took a deep breath Tuesday, with stocks closing little changed from their open. The Dow Jones Industrial Average rose three points, or 0.01%. The S&P 500 fell 0.2%. The Nasdaq Composite had a rough day, in comparison, down 0.6%.

The calm trading -- total volume was well below average for the year -- sets up a good month, with just one day to go in November. For the month, the Dow is up 3.4% and the S&P 500 is up 2.2%. November has been even kinder to some of the year's hardest hit stocks: Meta Platforms is up 18% in November, for its best month since April 2020. Peloton Interactive is up 25% and Under Armour is up 32%.

Some growth stocks are getting fresh looks as investors begin to price in a pause in the Fed's rate-hiking cycle. By now, investors are well aware of how much pain the Fed's aggressive rate increases have brought to stocks. But some data I saw today really underlined the hurt: According to Deutsche Bank, the S&P 500 has fallen 16.1% during the current rate cycle, which began with the Fed's first hike in March. (At the market's October trough, stocks were down 25%.) It's the market's worst rate-hiking cycle since a 13.1% decline in 1973.

No surprise, investors continue to hang on every word from Federal Reserve officials, looking for any clues the hikes are coming to an end. While trading was quiet today, things could get more volatile by the end of the week, particularly with the Labor Department scheduled to release the November jobs report on Friday.

Economists surveyed by FactSet forecast some 203,000 new jobs during the month, down from a 261,000 gain in October. That decline would likely be seen as positive news by investors -- an indication that the labor market, and inflation, is cooling.