Stocks managed to post gains on light volume ahead of the long holiday weekend.
Reassuring facts about inflation (opens in a new tab) calmed traders’ nerves, which were rattled in December by the Federal Reserve’s relentlessly hawkish policy interest rates (opens in a new tab). Be that as it may, there aren’t many market participants at this time of year, making it difficult to draw conclusions about what the equity benchmarks are doing.
This is especially true this year, given that the the bag will be closed (opens in a new tab) Monday in commemoration of Christmas, which falls on a weekend in 2022.
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For the most part, economic data on durable goods and inflation drove Friday’s session.
As for the former, the Department of Commerce reported that durable goods (opens in a new tab) orders fell 2.1% in November, which was well below economists’ forecast of a 0.6% decline. We also saw the release of the Fed’s preferred measure of inflation known as a Personal Consumption Expenditure Price Index (opens in a new tab) (PCE).
The latest report showed that inflation eased in November (opens in a new tab) to a 5.5% increase in prices compared to the previous month. That was in line with economists’ forecasts and represented a slowdown from October’s 6.1% monthly price rise. Any data that suggests the Fed is managing to control the worst inflation in four decades is generally applauded by the market, which is desperate for the central bank to slow its policy interest rate hikes (opens in a new tab).
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In less bullish news, the PCE report also showed that consumer spending (opens in a new tab) it only rose 0.1% in November, which represented a slowdown from the 0.9% increase in October. The figure worried at least some market participants as it could signal a possible slowdown in consumer spending.
“The personal income and spending report for November was close to what markets expected, although consumption was relatively weak in both nominal and real terms,” wrote Eugenio J. Alemán, chief economist at Raymond James (opens in a new tab). “The report was consistent with the weak retail sales report earlier this month, where we saw a very weak print for consumption of goods and a relatively strong print for consumption of services.”
At the closing bell, the blue-chip Dow Jones Industrial Average added 0.5% to end at 33,203, while the broadest S&P 500 gained 0.6% to 3,844. The technological heavyweight Nasdaq Composite rose 0.2% to close at 10,497.
The Best Bear Market ETFs to Buy Now
With only a handful of trading days in 2022, the stock market is certain to post its worst annual performance since 2008. All three major market benchmarks are in. bear market (opens in a new tab) territory this year, and it is not known when they will withdraw from it.
But as unpleasant as they are, bear markets are natural and inevitable, and surviving a bear market (opens in a new tab) it doesn’t have to be that complicated. Whether we talk about best stocks for a bear market (opens in a new tab)the best defensive DOW Dividend Stocks (opens in a new tab) or even actions chosen by artificial intelligence (opens in a new tab)investors have no shortage of strategies to mitigate the damage.
Most importantly, investments need to be diversified, and that’s where exchange-traded funds come in. Be sure to check out the best ETFs to fight a bear market (opens in a new tab) as it sets its 2023 allocations.
