Three Things to Watch
- Inflation will be the main focus this week with the October Consumer Price Index (CPI) due out on Tuesday. Overall CPI is expected up 0.3% month over month (a deceleration from the previous month), and core CPI is forecast to increase 0.2%. That would represent a 3.7% year-over-year change for the headline number—still too high for the U.S. Federal Reserve (Fed) and any upside surprise would likely reignite Fed tightening rhetoric.
- There are 20 different Fed appearances, which should provide ample opportunity for members to clarify their stance(s) on policy and the economy. The Fed last met on October 28 and left rates unchanged, although two unnamed members did dissent. At the previous meeting in July, three members dissented, voting for an immediate 25-basis-point increase.
- Artificial-intelligence related stocks will be in the news with the ongoing investigation of the Nvidia CEO and the potential regulatory increases under a Democratic Congress. We expect more volatility in that sector of the market in the near term.
Three Things to Know
- On Thursday, the S&P 500 declined -4.4%, its largest daily drop since April 2025. Before that day, the index recorded 56 one-day declines of at least -4.0% since 1952. Following such drops, the S&P 500 has gained 1.0% on average over the next week. By comparison, its average weekly return across all periods has been 0.2%. Over the next month, the index has averaged a gain of 2.0%, compared with 0.8% across all periods. Over the following three months, the S&P 500 has averaged 6.7%, more than triple the historical average of 2.2%. (Source: The Kobeissi Letter)
- For the third quarter of 2026, the blended (year-over-year) earnings growth rate for the S&P 500 is 31.4%. If 31.4% is the actual growth rate for the quarter, it will mark the third-straight quarter of earnings growth above 25% for the index. (Source: FactSet)
- Value stocks (+24%) are now outperforming growth stocks (-6%) by over 30 percentage points in 2026. If that holds, it would be a record spread, even wider than what occurred in 2000 when the Dot-Com Bubble burst. (Source: Charlie Bilello)
The above information reflects the current opinion of the author. It is based upon sources and data believed to be accurate and reliable. Opinions and forward-looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security mentioned.
6099480 – EXP: 11/30/2029