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Markets & Economic Update for November 2022: Economic Impact of the Election, Inflation

David Lundgren, CFA®
November 14, 2022

Each month, senior leaders of Hancock Whitney's Asset Management team discuss the latest news and events that impact markets and the economy.

 

This month: As we await final election results that will determine the makeup of the next Congress, persistent inflation and the war in Ukraine continue to affect the U.S. economy.

 

Watch and listen to the webinar:

 

HubSpot Video

 

Key Takeaways:

  • While votes are still being tabulated, it appears the Republicans will control the House with Senate control yet to be determined. Divided government was the expected outcome that materialized, but the real surprise was that a ‘Red Wave’ did not occur as many pundits had predicted. The political landscape has changed and divided government will have implications on the economy, policy, and markets.
  • The big macroeconomic news of the month was the stronger than expected 2.6% Q/Q annual rate of Real GDP growth in 3Q22. Despite the stronger than expected GDP report, real private domestic final sales. which serves as a good indicator of the underlying trend of U.S. economic growth, continued the deceleration that has been evident all year. The immediate outlook continues to be guarded and deteriorating, and Wall Street economists project a flat economy though the first half of next year.
  • Equity markets rallied during October with U.S. stocks outperforming International.  Stocks advanced as 3rd quarter earnings in the aggregate to date came in a bit better than expected, but markets also seem to be driven in part around an unlikely “Fed pivot” as it did during the summer hope rally.
  • Bond prices fell during the month as interest rates around the globe continued to rise higher during October.  Markets continue to be alarmed by the stickiness of inflation and the concern that central banks including the Federal Reserve would be forced to act even more aggressively regarding policy.
  • Ukraine has launched successful counteroffensives in both the east of the country, as well as in the southern Kherson region, making sizeable gains in the east in particular. Additionally, Russia announced a withdrawal of its troops from the southern city of Kherson and surrounding areas, the only regional capital that Moscow had seized since its invasion began. Ukrainian officials expressed caution over the statements, saying Russia could be bluffing and that significant Russian forces could remain in Kherson.

The Hancock Whitney Asset Management team is ready to guide your portfolio and help you achieve your investment goals. 

 

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