• U.S job openings fall to 10.4M
• PPI for final demand +0.6% in Oct.

What to watch in the week ahead: Retail Sales.

Inflation has heated up significantly this year as surging consumer demand collided with supply shortages across major sectors of the economy. CPI inflation has been tracking above 5% year-over-year since the start of the summer, with the latest year-over-year gain in CPI at 5.2% overall and 4.0% excluding food and energy. The year-over-year gains in inflation have been amplified by declines in prices a year ago, but supply chain issues have been a problem. In particular, the global semiconductor shortage has increased the prices of a wide range of goods throughout the economy, and most notably for autos. These higher input costs have sent inflation higher, as well as a general recovery in prices of air fares, restaurants, and rents from their pandemic lows.

• Despite lingering inflation concerns, U.S. equities recovered strongly in October, thanks to robust corporate earnings. The S&P 500^® posted a gain of 7%, outperforming mid- and small-caps, as the S&P MidCap 400^® and the S&P SmallCap 600^® rose 6% and 3%, respectively. Volatility declined, as the VIX^® closed at 16.26.
• All factors posted gains, with Growth and High Beta in the lead. Unsurprisingly, defensive factors trailed in October.
• All sectors posted gains. Consumer Discretionary led, followed by Energy, which continued its dramatic turnaround, up 58% year-to-date.