The Monday Moneybeat

MARY REICHARD, HOST: Coming next on The World and Everything in It, the Monday Moneybeat.

NICK EICHER, HOST: Stocks soared last week and all four major indexes posted big gains to pull out of last week’s market correction. Remember, a correction is defined as an index 10 percent or more below a recent high.

The Dow Jones Industrial Average picked up 5.2 percent on the week, the Standard & Poor’s 500 up 4.8. The Russell 2000 index of small company stocks erased its annual loss by gaining 3 percent last week. The tech-heavy stock index, the NASDAQ, perked up, too. It rose 5.6 percent.

Apple continues to struggle, though. Its stock shed 20 percent of its value in the month of November, and last week suffered another indignity: trading places with longtime rival Microsoft. Apple had been the first-ever $1 trillion company and the stock market’s most valuable. Last week, Microsoft claimed that mantle, surpassing Apple’s $847 billion valuation by posting $851 billion.

REICHARD: What drove the rally was a strong signal from Federal Reserve Chairman Jerome Powell that the central bank is rethinking its interest-rate strategy. Powell said the Fed’s benchmark rate is very near neutral. A month earlier, he said it was a long way from neutral.

Investors took it to mean that the Fed is going to back off its aggressive policy of interest-rate hikes. That’s good news for stocks, and by the end of the day that Powell spoke, the markets rocketed up in value.

EICHER: Three new economic reports last week: The first one says consumers remain largely confident about the economy. The Conference Board’s Consumer Confidence Index fell back slightly in November, just 1.4 percent lower than October. But bear in mind October’s index had hit an 18-year high.

The second report says consumer spending is very healthy. The Commerce Department posted October numbers, and they were three times higher than the previous month. The increase of 6/10s of a percent is the best growth in nine months. Consumer spending matters: it drives 70 percent of Gross Domestic Product.

REICHARD: The third report says the housing market continues its swoon. The National Association of Realtors says that pending home sales fell 2.6 percent in October, for a year-over-year decline just shy of 7 percent. The inventory of unsold new homes is at its highest level since 2009.

EICHER: And that’s today’s Monday Moneybeat.

(AP Photo/Richard Drew) Specialist Matthew Greiner works at a post on the floor of the New York Stock Exchange, Monday, Nov. 26, 2018. 

WORLD Radio transcripts are created on a rush deadline. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of WORLD Radio programming is the audio record.

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