Weekly Market Wrap Up, November 18-22, 2013

Weekly Information Center

Market Insight

Federal Reserve officials began discussion on ways to exit or slow down the asset purchase program in 2014, leading the markets to gain short-term ground following the release of the FOMC meeting minutes.

Despite the potential scale back of the quantitative easing program, the Federal Reserve emphasized that it will maintain short-term interests near zero and not “taper” until unemployment levels reach 6.5% and inflation 1.5%. However, consumer prices index reported a decrease of -.1% to 1% year-over-year. With the unemployment level at 7.3% and inflation stagnant at 1%, “tapering” of the bond-buying program may not begin until mid to late 2014. As a result, it is imperative for investors to be well-positioned for an eventual hike in long-term rates. Although economic reports were not as robust as expected, 95.4% of S&P 500 companies having disclosed earnings for the season reported an increase in operating earnings of 12.2% year-over-year indicating another consecutive record level for the S&P 500. In turn, the low inflation and interest rates make stocks, particularly large-cap and growth stocks, appear cheap in relative terms.

Weekly Review

  • CPI decreased 100 bps to .1%
  • The producer price index fell .2
  • Existing home sales decreased from 5.29m in the previous month to 5.12m
  • Initial claims decreased from 344k to 323K
  • Retail sales increased to .4%

What to look for next Week

  • Housing Starts
  • Pending Home sales
  • Consumer Confidence
  • Durable orders


S&P 500 Sector Performance

Style Returns

Chart of the Week


Article submitted by: J. Camilo Parra of the Capital Markets Lab (CML). To learn more about the Capital Markets Lab (CML) please visit https://business.fiu.edu/capital-markets-lab/.

About Capital Markets Lab

The Capital Markets Lab (CML) provides students, faculty, and the South Florida community with unparalleled educational and technological resources relating to finance. By utilizing the most current financial research platforms available, students are given an opportunity to supplement academic theory with the real world analytical tools used by leading financial institutions. Visit us at http://business.fiu.edu/capital-markets-lab/.

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