Stock Market Update

[BRIEFING.COM] The broader market is seeing a muted reaction to the release of the Fed's November Beige Book as well as comments from Fed Chair Jerome Powell at the NYT DealBook Conference.

Fed Chair Powell expressed confidence in the U.S. economy, highlighting its strong performance, low unemployment, and progress on inflation, while emphasizing a cautious approach to monetary policy aimed at balancing inflation control and labor market stability. He also reaffirmed the Fed's independence and continuity in its institutional relationship with the Treasury under the new administration.

Changing gears a bit, the Beige Book revealed that economic activity saw a rose slightly in most Discricts, with modest or moderate growth in some regions offsetting flat or slightly declining activity in others. Consumer spending remained stable, though businesses noted increased price and quality sensitivity among consumers. Mortgage demand was low, and commercial real estate lending was subdued, though financing remained available.

What's more, employment levels remained flat or grew slightly, with subdued hiring activity and low worker turnover. Wage growth softened overall, except for robust growth in entry-level and skilled trades positions, which is expected to continue.

Prices rose modestly, with businesses struggling to pass on higher input costs, leading to shrinking profit margins. While some raw material costs declined, insurance prices remained a significant burden, and tariffs were highlighted as a potential inflationary risk.