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November 2021 Review and Outlook

Hawkish comments from Federal Reserve Chair Jerome Powell and uncertainty over the new Omicron variant sent the markets into a tailspin to end November. 

Executive Summary

  • Jerome Powell on Transitory Inflation: “It is probably a good time to retire that word” 
  • Omicron variant spooks markets
  • Oil declined over 20% in November
  • VIX saw its largest monthly surge since February 2020
  • Early holiday sales robust but below expectations

Index Performance for November:

Index performance

Hawkish comments from Federal Reserve Chair Jerome Powell and uncertainty over the new Omicron variant sent the markets into a tailspin to end November. 

Chair Powell’s comments at the Senate Banking Committee on the last day of the month caught investors off guard after he said it’s time to retire the word “transitory” when describing inflation. The Fed chair seemed more concerned about tailoring policy to keep inflation pressures in check and that it’s appropriate to discuss at the next policy meeting about wrapping up the taper quicker than expected. 

The prevailing thought was the Omicron variant would encourage the Fed to be more patient with tapering, especially after he was quoted on Monday saying, “The recent rise in COVID-19 cases and the emergence of the Omicron variant pose downside risks to employment and economic activity and increased uncertainty for inflation,”

A speedier taper plan would mean the Fed could hike rates sooner than previously expected, which would be extremely impactful to the markets. The Fed Fund Futures are baking in a 27% chance of a rate hike in March and a 59% chance for May.

Implied Overnight Rate & Number of Hikes/Cutes


All the major indexes made new highs earlier in the month but could not hold onto those gains. Only the Nasdaq 100 and the Nasdaq Composite were able to eke out gains. This was the 1st time in a decade that the S&P 500 closed November in the red.

Small-cap names took it especially hard. The Russell 2000 made a new all-time high of 2458.86 on November 8th only to see those gains record washed away, closing lower by 4.2% for the month. The selloff in the Russell was so severe in the last three days of November that it broke support at its 50-day simple moving average (SMA) of 2299 and its 200-day SMA of 2260.

Russell 2000 YTD:

Russell 2000 YTD

The yield on the benchmark 10-year Treasury saw a sharp decrease to end November, after starting the month near 1.41%, peaking at 1.69% and declining in the final week to end at 1.48%. 

10-year Treasury Yield One Year: 

10-year Treasury yield 1 year

Holiday Sales

Nearly 180 million Americans went shopping in stores or online over the Black Friday weekend (Thanksgiving - Cyber Monday), according to the National Retail Federation (NRF). This compares roughly to the 186.4 million shoppers last year and 189.6 million in 2019. While sales were robust, this is the first time we have seen a year-over-year decline in sales. Adobe Analytics reported online sales on Cyber Monday totaled $10.7 billion, down 1.4% from 2020, and Black Friday saw sales of $8.9 billion, slightly below last year. Several reasons have been flagged here for the decline, including bottlenecks in the global supply chain and a longer shopping period as many consumers looked to purchase items ahead of the major shopping days. The NRF estimates U.S. retail sales for November and December will increase by a record 8.5% to 10.5% for the year compared to 2020, to the tune of $859 billion. 

The S&P Retail Index (+3.6%) posted a strong month as consumer spending increased for the third consecutive month. This bodes well for the U.S. economy as consumer spending accounts for nearly two-thirds of our GDP. 

Holiday Sales

Sector Performance Total Return for November:

Sector performance total return for November

Earnings Commentary

Corporate profits were strong for Q3’21, coinciding with the S&P 500 Index making new all-time highs in early November. According to FactSet data, 82% have beaten consensus EPS expectations. The blended earnings growth rate stands at 40.7%, while the blended revenue growth rate is 17.5%. Essentially companies are reporting earnings that are 10% above expectations, below the 18% one-year average positive surprise rate but above the five-year average of 8.4%. 

Interestingly, FactSet pointed out they search for common themes on corporate conference calls that may impact earnings and revenue for the quarter. Nearly 350 of the S&P 500 companies noted the term “supply chain” on their conference calls which is the highest in over ten years. 


Volatility returned to the markets as the CBOE Volatility Index or VIX saw its largest monthly surge since February 2020, increasing over 68% in November from a low of 14.73 on November 4th to a high of 28.99 on the day after Thanksgiving. 

VIX - November:

VIX - November

VIX - 2 Year:

VIX - 2 year

Economic Commentary

The U.S. Department of Labor’s November 5th Employment Situation Report posted better than expected numbers on job creation (+531,000 new vs. 450,000 consensus) and the unemployment rate (+4.6% vs. 4.7%). Hourly wages grew in line with expectations (+4.4%), while the labor force participation rate was unchanged at 61.6%. 

October’s CPI number was hot, coming in +0.9% M/M for October (vs. consensus +0.6%) and up 6.2% year-over-year. That’s the largest 12-month increase since November 1990. PPI for October (+0.6%) was in-line with analysts’ elevated expectations. On a Y/Y comparison, the index for final demand increased 8.6% (unchanged from September), remaining one of the largest 12-month advances recorded since 2010. The index for final demand, less food and energy, was up 6.8% (also unchanged from September).

The U.S. Initial Jobless Claims plunged to the lowest levels since November 1969. For the week ending November 20th, new claims decreased by 71,000 to 199,000 (consensus 260,000), while continuing jobless claims decreased to 2.049 million.

The U.S. Department of Commerce’s 2nd estimate for Q3’21 GDP saw an upward revision to +2.1% from +2.0% as private inventories increased in the quarter. The Commerce Department data also showed that consumer spending increased in October as Retail Sales increased for the third consecutive month.

Personal income increased 0.5% in October from September (consensus +0.2%) while personal spending increased by 1.3% (consensus +0.4%). A clear sign that households are spending more than they are earning. 

The PCE Price Index was up 5.0% Y/Y, versus 4.4% in September, and the core PCE Price Index, which excludes food and energy, rose 4.1% vs. 3.7% in September. On a monthly basis, the PCE deflator rose 0.6%, while core increased 0.4%.

The Conference Board’s Consumer Confidence Index posted its lowest reading since February 2021, citing rising prices and the Delta variant as the biggest concerns. November’s reading was 109.5 vs. consensus of 111 and below a downwardly revised 111.6 (from 113.8) in October.

U.S. Personal Consumption Expenditures Price Index:

U.S. Personal Consumption Expenditures Price Index



Oil prices fell in November but are still trading near multi-year highs after topping out at nearly $85 a barrel. In a parallel effort with other major energy-consuming nations, President Biden announced the release of 50 million barrels from the U.S. Strategic Reserve to “lower prices for Americans and address the mismatch between demand exiting the pandemic and supply.” Crude was down 20% in November but still up 38% for the year.

Regular unleaded gasoline has not seen that same price decline. According to AAA data, the average cost of a gallon of regular gas in the U.S. is $3.39, down a penny from October. One year ago, a gallon only cost $2.127. That is a 59% increase Y/Y.

Crude Oil Front-month Contract for November:

Crude Oil front month contract for November

Crude Oil Front-month Contract for the Past Five years:

Crude Oil front month contract for the past five years


Gold erased mid-month gains following the recent comments from Fed Chair Powell at the Senate Banking Committee hearing that the strong U.S. economy and persistent levels of elevated inflation could warrant ending tapering of asset purchases earlier than expected. Gold finished lower by 0.6% for the month.



Persistent levels of elevated inflation and a seemingly more hawkish Federal Reserve are accelerating the recent U.S. dollar rally. The world’s largest reserve currency reached a 16-month high of $96.938 on 11/24 before pulling back at month’s end. The U.S. Dollar Index finished up 1.85% for the month.



Bitcoin made a new all-time high in early November (topping $68,000) before giving back those gains on the same inflationary and Covid variant fears that impacted all aspects of the market at the end of November. Bitcoin declined 6.3% for the month.


Looking Ahead

Uncertainty over the new Omicron variant and inflation concerns from Chair Powell were enough to sink the market in November. Look for clarifying comments at the next policy meeting on tapering and interest rate expectations on December 15th. November’s non-farm payroll report will be released Friday. Expectations are for the employment rate to drop to 4.5%.

The information contained herein is provided for informational and educational purposes only, and nothing contained herein should be construed as investment advice, either on behalf of a particular security or an overall investment strategy. All information contained herein is obtained by Nasdaq from sources believed by Nasdaq to be accurate and reliable. However, all information is provided “as is” without warranty of any kind. ADVICE FROM A SECURITIES PROFESSIONAL IS STRONGLY ADVISED.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The Market Intelligence Desk Team


Nasdaq’s Market Intelligence Desk (MID) is designed to provide critical touch-points for timely trading analysis and market information.

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