Investment Review - November 2022
- The major U.S. stock indices rebounded in October as investors hoped the Federal Reserve nears the end of its rate hiking cycle. The Dow Jones Industrial Average recorded one of its best months since 1976, rising 14%. The S&P 500 was up 8% and the Nasdaq Composite advanced nearly 4%.
- Earnings expectations for the S&P 500 have declined 10% since January 3 while the index has declined nearly 20%. Valuation has improved, but the market may not yet be discounting a potential decline in earnings in a recession. Forward and trailing operating earnings for the S&P 500 have typically fallen 15-20% in recessions.
Sources: Bloomberg LLC, FactSet, U.S. Department of Labor
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