U.S. stocks continue to sizzle in the month of November after posting a robust midweek rally on the report of positive economic news. The positive sentiment in the market came as investors are gaining confidence amid the belief that the Federal Reserve could be easing back on interest rate hikes. Economic data contributing to the growing confidence hit the press midweek with cooling inflation and softer jobs data. That, in turn, leads investors to believe the central bank’s tightening is finally squeezing the US economy.
The long narrative of the “Resilient Consumer” is showing signs of nearing the end as the holiday season approaches. Retail sales declined for the first time since March as, despite stubborn inflation throughout the year, consumers were still spending. However, reports are starting to show the American consumer is beginning to tighten the belt when it comes to discretionary spending. Big box retailers are seeing consumers monitor spending and passing on big ticket items, sticking more to necessities. The resilient consumer has been worn down by higher costs and coping with the anxieties of mounting credit card debt and dwindling savings (1). More to come as the holiday season arrives and consumer spending continues to be monitored.
On the other hand, gasoline prices are headed lower going into the Thanksgiving holiday, which will benefit drivers at the gas pump. Spending less on gasoline will free up more money to spend in other areas. Prices have been steadily decreasing as of late due to lower seasonal demand alongside the use of less expensive winter-grade gas. “Earlier this week, eleven states saw their averages dip below the $3.00 per gallon level. Another fourteen were in a range between $3.01 and $3.25 per gallon.”(2) This could benefit the “Resilient Consumer” immensely as fewer dollars are allocated to fueling vehicles during the next few months.
Next week will be a short trading week due to the Thanksgiving holiday. U.S. stock and bond markets will be closed on Thursday (11/23) and will close trading early on Friday (11/24). On behalf of all of us at Biltmore Wealth Management, we extend warm wishes for a joyful Thanksgiving!