Major markets had a positive week, with all five indices closing higher. The S&P 500 marked its fifth consecutive week of gains, achieving the best monthly return since July 2022. Small Cap Value outperformed Large Cap Growth. Communication Services was the only major segment not participating in the gains.
The economic calendar presented mixed signals, suggesting a potential soft landing after the rate increase cycle. New Home Sales missed expectations, but the Case-Shiller Index met them with a 3.9% increase. Consumer Confidence exceeded expectations at 102.1, and the initial Q3 GDP revision rose from 4.9% to 5.2%.
Federal Reserve members indicated it was premature to expect rate decreases, but comments from Fed Members Bowman and Waller introduced conflicting sentiments. The Yield curve dropped significantly, with the two-year duration shedding 36 basis points, favoring bond indices. The Bloomberg Barclays Aggregate Bond Index added over two percentage points due to the decline in interest rates.