Weekly Market Recap: Earnings Drive Gains, Economic Signals Ahead

Market Overview 

U.S. equities rebounded this week, with the S&P 500 gaining 1.7%, the Dow up 2%, and the Nasdaq rising 1.7%. Value stocks outperformed growth, and small caps surged over 4%. Earnings season drew focus, led by NVIDIA’s mixed results, Walmart’s strong performance, and Target’s disappointing forecast. Internationally, European stocks ended higher, buoyed by rate-cut expectations, despite weak economic data and geopolitical tensions in Ukraine. In Asia, markets were mixed; Japan’s fiscal stimulus plans supported gains, while China’s internet stocks weighed on Greater China indexes. 

Federal Reserve Insights and Economic Roundup 

The U.S. Treasury market saw mixed yields this week, with concerns about elevated supply and soft demand. A lackluster 20-year Treasury auction highlighted pressures on primary dealers. Elevated government deficits and ongoing quantitative tightening suggest continued volatility in Treasuries. 

Economic data showed slight improvement in housing affordability as October home sales rose 3%, although housing starts declined for the second month amid election uncertainty and severe weather. Builder confidence improved, with increased buyer interest suggesting potential demand recovery in the coming months. 

The Week Ahead 

Key economic releases to watch include: 

Monday: Chicago Fed National Activity Index, Dallas Fed Manufacturing Activity 

Tuesday: Home Price Indexes, New Home Sales, Consumer Confidence 

Wednesday: GDP (Q3 second estimate), Core PCE Price Index, Durable Goods Orders, and Personal Spending 

Friday: MNI Chicago PMI