Anchored but Agile - Markets Adapt as Rate Expectations Shift

This was a short week in the United States due to the Thanksgiving holiday, but it still left several relevant signals in economic, market, and political matters. Macro data continued to show moderate activity and slowing inflation. Retail sales rose only 0.2% in September, while pending home sales fell 0.4% year-on-year in October, reflecting consumers and the real estate market still under pressure from high interest rates. In industry, orders for durable goods rose 0.5% and non-defense capital goods grew 0.9%, a slight but positive sign of corporate investment.

The labor market offered mixed signals. Weekly jobless claims fell to 216,000, their lowest level in seven months, although continuing claims rose to 1.96 million, showing that finding a new job remains challenging. Consumer confidence fell again in November, affected by the perceived deterioration in the labor market and the prolonged disruption of the recent federal government shutdown. That shutdown led to the cancellation of the early release of third-quarter GDP data and could subtract up to 1.5% from fourth-quarter growth, according to the Treasury.

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