The Pulse on the Economy and Capital Markets: December 11 – 15, 2023

To Summarize: The financial markets spark optimism while holiday shopping broke records. However, concerns linger for lower-income consumers and businesses strained by inflation and rising interest rates. We unpack this and more in the November edition of The Pulse.

In the Markets: The stock, bond and crypto markets surged on the possibility of sidestepping a recession and the anticipation of lower interest rates in 2024. Last week the Federal Reserve announced expectations for interest rate reductions in 2024, with the belief that by 2025 they will have reduced rates by three-quarters of a percent.

Holiday Shopping Breaks Records: After what has been a rough year, retail sales – adjusted for inflation – grew year-over-year for the second time in three months, likely fueled by the deflation of online pricing. The sectors that experienced the largest increase were online retailers, restaurants and bars, and automotive.

Economic Stressors Impact Lower-Income Consumers: Despite strong holiday shopping, companies that cater to lower-income consumers continue to face challenges. Dollar Tree and America’s Car-Mart reported that the impact of inflation and reduced government benefits are causing discretionary spending to take a hit on both small- and big-ticket items.

Top Headlines: We’re reading about how Manhattan’s median rent fell for first time in over two years, Google is rolling out new AI models for healthcare, John Deere’s goal for fully autonomous farming by 2030 and pro pickleball players concern over merger and pay cuts.

Related resources:

• Manhattan median rent falls for the first time in over two years
• Google is rolling out new AI models for health care. Here’s how doctors are using them
• How Deere is preparing for a fully autonomous farm by 2030
• Pro pickleball players band together as chaos, a merger and pay cuts grip the sport