John Hancock: Weekly Market Recap Week Ended November 30th
The power of words
A single sentence in a speech by the chairman of the U.S. Federal Reserve was cited as the chief catalyst that sent the major indexes soaring between 2% to 3% on Wednesday. Jerome Powell eased fears of a more aggressive pace of interest-rate increases when he said that rates are currently “just below” estimates of a neutral level—one that neither stimulates nor suppresses economic growth.
The major stock indexes surged around 5%, gaining more than enough ground to recover the steep losses they posted in the prior week when the S&P 500 entered a correction. The latest week’s rally left stocks almost exactly where they were in mid-November.
The yield of the 10-year U.S. Treasury bond briefly fell below the 3.00% threshold on Thursday for the first time in more than two months, marking the 11th time in 13 days of trading that the yield has declined. As recently as November 8, the yield was as high as 3.24%.
On the heels of stocks’ worst October result in a decade, the major indexes endured another rough ride in November but ended up slightly higher overall. The S&P 500 added around 2%, although there was a big gap of nearly 7% between the index’s peak on November 7 and its low point on November 23.