Market tries to rebound before Thanksgiving Day
The major indices were down between 0.6% and 1.1% shortly after the open, but they've reclaimed most, if not, all of those losses. The Nasdaq Composite is up 0.1%, the S&P 500 is relatively unchanged, and Dow Jones Industrial Average is down 0.2%.  Six of the 11 S&P 500 sectors are trading lower while five are trading higher. The materials (-0.7%) and consumer staples (-0.4%) sectors lag with modest losses, while the energy (+0.9%) and real estate (+0.9%) sectors outperform with 1% gains. The information technology sector, which is the market's most heavily-weighted sector, is up 0.2% after being down 1.1% intraday. Risk sentiment has been pressured by increasing expectations for the Fed to be more aggressive in tightening policy due to elevated inflation and an improving labor market. Prior to the open, weekly initial claims (199,000) fell to their lowest level since Nov. 15, 1969, and the Fed's preferred inflation gauge in the PCE Price Index was up 5.0% yr/yr in October.  San Francisco Fed President Daly (2021 voting member) even said she can see the case for a faster taper plan, according to CNBC. The FOMC Minutes from the November meeting will shed additional insight when it's released at 2:00 p.m. ET. It's also worth noting that the economic data today stretched beyond jobless claims and PCE: personal income and spending for October, the final November consumer sentiment report from the University of Michigan, new home sales for October, and the second estimate for Q3 GDP each increased versus their prior readings. Despite that, the 10-yr yield is down one basis point to 1.65% after brushing up against 1.70% earlier today. The fed-funds-sensitive 2-yr yield is up two basis points to 0.63%. The U.S. Dollar Index is up 0.4% to 96.91. Separately, shares of Nordstrom (JWN 22.72, -9.22, -28.9%), Gap (GPS 18.17, -5.33, -22.7%), and Autodesk (ADSK 252.04, -51.97, -17.1%) are sinking following their earnings reports. On the other hand, Deere (DE 369.16, +19.88, +5.7%), HP Inc. (HPQ 35.45, +3.26, +10.1%), and Dell (DELL 57.34, +3.67, +4.9%) are some earnings winners. Reviewing today's economic data:Initial jobless claims for the week ending November 20 plunged by 71,000 to 199,000 (Briefing.com consensus 265,000), which is the lowest level of initial claims since November 15, 1969. Continuing jobless claims for the week ending November 13 decreased by 60,000 to 2.049 million.The key takeaway from the report is that, with initial claims hitting their lowest mark since 1969, it will play into the burgeoning narrative that the Fed is going to need to be more aggressive with its tapering plans.Personal income increased 0.5% month-over-month in October (Briefing.com consensus +0.2%) while personal spending increased 1.3% (Briefing.com consensus +1.0%). The PCE Price Index jumped 0.6%, as expected, and the core PCE Price Index, which excludes food and energy, rose 0.4%, also as expected.The key takeaway from the report is that prices increased at a pace faster than income, stealing the purchasing power of those income gains and leading to more spending out of savings. Real disposable personal income declined 0.3% month-over-month while the personal savings rate, as a percentage of disposable personal income, fell to 7.3% from 8.2%.New home sales increased 0.4% month-over-month in October to a seasonally adjusted annual rate of 745,000 (Briefing.com consensus 800,000) from a downwardly revised 742,000 (from 800,000) in September. On a year-over-year basis, new home sales were down 23.1%.The key takeaway from the report is that the growth in new home sales is concentrated in higher-priced homes, as inflation pressures, exacerbated by supply constraints and labor shortages, are curtailing the building of lower-priced homes and pinching affordability for lower-income buyers.The final November University of Michigan Index of Consumer Sentiment increased to 67.4 (Briefing.com consensus 66.8) from the preliminary reading of 66.8. The final reading for October was 71.7.The key takeaway from the report is that the Index of Consumer Expectations has been pressured to its lowest level in a decade due to rapidly accelerating inflation and little belief that steps are being taken to mitigate rising prices. Roughly 25% of respondents said that inflation eroded their living standards in November.The second estimate for Q3 GDP showed an upward revision to 2.1% (Briefing.com consensus 2.2%) from 2.0%. The GDP Price Deflator was revised to 5.9% (Briefing.com consensus 5.7%) from 5.7%.The key takeaway from the report is the understanding that the change in private inventories fueled the Q3 GDP increase. Real final sales of domestic product, which excludes the change in private inventories, were flat, slightly better than 0.1% decline reported with the first estimate.The Advance report for International Trade in Goods for October showed a deficit of $82.9 billion, versus a revised $97.0 billion (from $96.3 billion) in September. The Advance report for Retail Inventories for October decreased 0.1%, while the Advance report for Wholesale Inventories for October increased 2.2%.The Weekly MBA Mortgage Applications Index increased 1.8% following a 2.8% decline in the prior week.