Stocks started the final trading month of 2022 on a volatile note as traders and investors digested a flurry of economic reports and Wednesday’s comments from Federal Reserve Chairman Jerome Powell. (opens in a new tab).
A reading on US manufacturing activity contracted for the first time since the height of the pandemic, raising the specter of recession (opens in a new tab) in 2023. Apple (AAPL (opens in a new tab)) stocks continued to struggle with potential impact on iPhone production (opens in a new tab) of the COVID-19 lockdowns and civil unrest in China. Meanwhile, the Fed’s preferred measure inflation (opens in a new tab) showed that the prices of basic goods and services continued to moderate.
Perhaps the most important macroeconomic news this Thursday came from the Institute of Supply Management. Its manufacturing activity indicator fell to 49 in November from 50.2 the previous month. Readings below 50 indicate shrinkage. The gauge has now declined in five of the past six months, but this was the first time factory activity has declined since May 2020.
Subscribe to Kiplinger’s Personal Finance
Be a smarter, better informed investor.
Save up to 74%
Sign up for Kiplinger’s free e-newsletters
Benefit and thrive with the best of Kiplinger’s expert advice on investing, taxes, retirement, personal finance and more, delivered directly to your email.
Profit and thrive with the best of Kiplinger’s expert advice, delivered directly to your email.
Elsewhere, the core price index for personal consumption expenditures (which the Fed pays more attention to) rose 0.2% in October. This was slightly below the average estimate of economists. The index, which excludes volatile food and energy prices, rose 5% year-on-year.
Personal income for October rose 0.7%, easily beating the forecast of an estimated 0.4% growth. Personal spending increased by 0.8%, which matched projections.
Sign up for the FREE Kiplinger Investing Weekly e-letter for stock, ETF and mutual fund recommendations and other investment advice.
Finally, market participants continued to process the implications of Speech by Fed Chairman Jerome Powell at the Brookings Institution (opens in a new tab). Although the central bank is now expected to raise interest rates by just 0.5% when it meets in mid-December, Powell remained tight-lipped about where rates would go. (opens in a new tab) will eventually peak.
All these mixed signals led to a mixed close for the major indices in a seesaw session on Thursday. The blue-chip Dow Jones Industrial Average fell 0.6% to close at 34,395, while the broadest S&P 500 it was essentially unchanged (or less than 0.1%) at 4,076. The technological heavyweight Nasdaq Compositehowever, it gained more than 0.1% to 11,482.
The starting point
O bear market (opens in a new tab) he’s still furious, but the best blue-chip stocks (opens in a new tab) never go out of fashion. In fact, the Dow—that elite bastion of only 30 blue chips—is now up just 3.4% for the year to date on a total return (price plus dividends) basis. Not surprisingly, a number of Dow stocks make the list best stocks to buy for a bear market (opens in a new tab). Another subset of the Dow, the Best Dow Dividend Stocks (opens in a new tab)is hitting the wider market in 2022.
In contrast to last year, when high-flying growth stocks (opens in a new tab) they were fashionable Several of those names, included caravan (CVNA (opens in a new tab)) and Rivian (RIVN (opens in a new tab)) – fell to earth, and now says a well-known technological bear dear old market Altaian (TEAM (opens in a new tab)) could even reach $0.
