“Opportunity comes to the prepared mind.”
-Charlie Munger
Here’s what you need to know this week:
- Stocks rebound after a short selloff
- The Republican party secures all three branches of the federal government
- Analysts are divided as to the Federal Reserve’s next move
Back on Top
Stocks experienced a brief selloff over the last two weeks but have since rebounded. The S&P 500 and Dow Jones both fell by roughly 2.50% while the tech-heavy NASDAQ endured a 4% drawdown. However, the dip proved to be short-lived: The Dow Jones is already back at all-time highs, the S&P 500 is just 0.04% below its all-time high and the NASDAQ is 1% below its own high.
Unified Government
The Republican party has officially won a majority of the House of Representatives, giving them control of both Congress and the White House starting in January. The GOP currently holds a slim majority of 219-213 with three races left to be called:
(source: NBC News)
This majority will give President-elect Trump more latitude to accomplish his agenda. Speaking of, Trump announced this week that he plans to implement a 10% tariff on both Mexico and Canada on his first day in office. Most experts agree that this move would cause inflation to rise, but so far the markets have been mostly unperturbed.
Coin Toss
The Federal Open Market Committee (FOMC) next meets on December 17th-18th to determine interest rate policy, and for the first time in more than a year investors are uncertain as to the next move. As of writing, the bond market is assigning a 53% chance of another 25 basis point (0.25%) rate cut and a 47% chance of no cut[1].
Analysts will closely be watching the release of the Personal Consumption Expenditures (PCE) reportfor October later today as for clues to the Federal Reserve’s next move. PCE is the Federal Reserve’s preferred measure of inflation, and analysts expect the report to show monthly inflation at 0.2% and annualized inflation at 2.3%[2]. An upside surprise would most likely lower the odds of a rate cut and possibly pump the brakes on the bull market. A lot can change in the three weeks between now and the FOMC meeting, but this will likely be the main market story until then.
What Else
- Markets will be closed for Thanksgiving and will close at noon on Friday in observance of the holiday
- US officials believe Israel and Hezbollah have agreed to a ceasefire, although there has not yet been an official announcement
- The OKC Thunder are tied for first place in the Western conference
- OU plays LSU this Saturday at 6:00 PM on ESPN
- OSU plays 16th ranked Colorado this Friday at 11:00 AM on ABC
What We’re Reading
Japanese researchers have developed the world’s first wooden satellite as an experiment to see whether timber is a suitable material for space exploration. Click below to read about the experiment and see pictures of the small wooden satellite:
What’s Happening Downtown
The Holiday Pop-Up shops return to Midtown this Friday, November 29th. The shops are open every Friday through Sunday until December 22nd and features a rotating roster of local vendors. Click below to learn more:
Written by: Kane Ogle, CFP®
Steve Beck, Amber Eduvigen, CFP®, Kane Ogle, CFP®, Cale Olbert, CFP®, Brett Valentine, Brandon Ingerson, Jenni Hess, Anne Boone
Sources: [1] CME Group [2] Yahoo! Finance