Monthly Observations from CIO, Chris Zaccarell

Alina Myakota |

Markets in Review

Stocks staged an impressive rally in November, with the S&P gaining 8.9%, increasing its year-to-date gains to 19.0%. The MSCI All Country World index also jumped, gaining 9.1% for the month, which improves its year-to-date return to 14.7%. Bonds also jumped with the Bloomberg BarCap U.S. Aggregate Bond index up 4.5% in one month, bringing its year-to-date return to a 1.65% gain. Inflationary pressures have receded and the Federal Reserve has indicated that they are going to stop raising interest rates as a result. Investors are looking ahead to future rate cuts, but the Fed is being more cautious in their outlook signaling that they will pause their rate hikes for now, but aren’t ready to claim “Mission Accomplished” in their inflation fight.

Monthly Highlights

  • Slowing inflation data has allowed the Federal Reserve to stop raising interest rates. 
  • OpenAI, the company behind ChatGPT, fired their CEO but was forced to reverse course.
  • The stock rally in November bodes well for December and possibly next year.

News in Review

Below are some stories that caught our eye this past month. To learn more, follow the links to the full article.

GDP and Inflation Data Bolsters Case that Fed is Done Hiking Interest Rates

Despite a rapidly growing economy – Gross Domestic Product (GDP) is growing at 5.2% – the rate of inflation is slowing down. Because prices are increasing more slowly, the Federal Reserve has stopped raising interest rates, even though the economy continues to grow. Investors are now anticipating rate cuts, but the Fed has shown no indication that they are ready to begin lowering rates, so it may take longer than people expect for interest rates to come back down.

CEO of Premiere Artificial Intelligence Company is Ousted and then Brought Back

OpenAI, the company that took the world by storm last year when they released their ChatGPT software, fired their CEO without warning. Sam Altman, who was well known in the artificial intelligence community, was blindsided by the decision, as was one of the biggest investors in the company, Microsoft. Given the uproar within the company – hundreds of employees threatened to quit – and by their investors, the board had no choice but to re-hire Mr. Altman.

Stocks’ November Rally is Good for the Market in December and Potentially 2024

The stock market in November rallied the most in over a year and history would suggest that a rally that strong will be followed by gains in December and next year as well. Of course, history doesn’t guarantee anything in the future, but when the market gains by 8% or more in any month, it typically rises 1.8% the following month (e.g. the average gain, when looking at data from 1950-2022). Likewise, 90% of the time this has happened in the past, the stock market was higher a year later. While no one knows what will happen with Fed interest rate policy or whether or not the economy will fall into recession, in the absence of Fed rate hikes or a recession, it’s possible that the stock market rally will continue well into next year.

Designer Drink Container Survives Ordeal Which Leads to CEO Marking a Surprising Decision

The makers of the Stanley tumbler – a competitor to YETI – were pleasantly surprised to learn of how durable their product was after seeing a video from a woman whose car caught on fire. The woman was unharmed and apparently, the drink container wasn’t either, so the president of Stanley, Terence Reilly, decided to buy the woman a new car as a goodwill gesture (and because of all of the great publicity).



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