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Every so often, it’s worth taking a step back from the daily noise to see where the market and the economy stand. So that’s what we’ll do this week. Given cooling inflation, rate-cut optimism and the earnings season unfolding in a strong way, investors are recalibrating where things stand heading into year-end.


The S&P 500 rose 1.9% for the week, finishing once again at an all-time high at ~6,792 after a momentary pullback the prior week. Softer inflation data sparked hopes for a Fed pivot, sending equities higher. Technology and Energy led the move. Small-caps outperformed large-caps, showing signs of broader market participation, not just from the Mag 7. The VIX (fear index) slipped below 20, indicating calmer sentiment after a stretch of volatility tied to meme stocks and regional banks.


On the earnings front, major banks topped expectations. And aggregate S&P 500 profit growth for the third quarter is tracking around 8.5%, making it clear that corporate fundamentals have some resilience. Year-to-date, the index is up 15.5% (16.7% total return), driven by expectations of rate cuts, steady earnings along with ongoing enthusiasm for AI-related tech leaders.


Inflation and interest-rate expectations continued to dominate the macro narrative. The latest CPI report showed prices rising 3.0% year-over-year, just below forecasts. This small surprise pushed markets toward pricing in a 25-basis-point cut at next week’s Fed meeting with more easing into 2026.


The 10-year Treasury yield held just below 4%, which helps support equity valuations. Economic activity also showed some improvement. October’s PMI readings climbed back above 50. This line separates expansion from contraction. At the same time, the unemployment rate remains stable at ~4.2%, implying that there’s some cooling but overall it’s still a healthy labor market.


All in all, the data points to the “soft-landing” scenario we’ve all been hoping for. On the geopolitical side, trade tensions with China briefly caused some volatility, but markets normalized after reports that Trump and Xi plan to meet soon.



“Optimism is the faith that leads to achievement. Nothing can be done without hope and confidence.” — Hellen Keller


In this kind of environment, it helps to stay grounded in fundamentals. Falling rates and steady growth often create the right conditions for undervalued, cash-generating companies. These are the type of names showing up in our daily Convergent Stock Ratings CSR screener.


And as a reminder, our weekly Excel S&P 500 UVReport, available to Premium and Professional subscribers, provides a broader view across all 503 S&P 500 stocks.


The latest edition highlights improving free-cash-flow yields and rising forward EPS estimates in Industrials and Consumer Discretionary. These sectors historically outperform in early easing cycles. Even while indexes linger near record highs, there’s still opportunity in disciplined, fundamentally strong businesses trading below their intrinsic value.


At UVstocks.io, we’re not trying to predict what happens next. We’re working to help investors understand what’s driving value right now. If you found this recap useful, please share it with a friend or colleague who might benefit from a clearer view of the markets and where the undervalued opportunities may lie.


P.S. I'm sharing some investment information, but it's important to remember that what I'm providing is for informational purposes only and should not be construed as financial advice.


Happy Investing,

John


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