Holiday cheer Holiday cheer\images\insights\article\bridge-blue-ridge-parkway-autumn-small.jpg November 21 2023 November 21 2023

Holiday cheer

Thanksgiving brings increased travel, falling prices and rallying financial markets.

Published November 21 2023
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It’s been a difficult year, to be sure. Geopolitical risks have grown, spreading from the ongoing Russian invasion into Ukraine to the Israeli/Hamas war. Washington is contributing significant financial and military support to our allies, sparking protests. The Mexican border continues to be a major problem, with eight million illegal aliens streaming across into the U.S. over the past three years. This has created a massive migrant problem in many major sanctuary cities like San Francisco, Chicago, Philadelphia and New York City. 

On the economic front, the Federal Reserve has been aggressively raising interest rates over the past 20 months. They have taken them to a 22-year high of 5.25-5.5%, simultaneously shrinking the balance sheet from $9 trillion to $7.8 trillion. With an expected lag, the tighter monetary policy has begun to orchestrate the desired effect. The unemployment rate has risen from a 53-year low of 3.4% in April 2023 to 3.9% in October; CPI inflation has declined from a 41-year peak of 9.1% in June 2022 to 3.2% in October 2023; and GDP growth is poised to slow over the next several quarters.

Even the contentious presidential election has not dissuaded the financial markets from donning their rally caps over the past month. In fact, it seems they have discounted the political turmoil. The S&P 500 has surged by 11% since Oct. 27—largely reversing a like-sized decline in stocks during August through October—and is approaching our 4,600 full-year target. Benchmark 10-year Treasury yields have plunged from a 16-year high of 5% on Oct. 19 to 4.4% now.

So as we approach this week’s Thanksgiving holiday, let’s reflect on our many blessings as we share a meal with our family and friends. Giving Tuesday arrives next week, and charity is a terrific way to celebrate the season. Please consider volunteering at a soup kitchen, donating to a food bank or participating in a food drive at your local church, temple or community center.

Happy Thanksgiving, everyone!

Travel forecast: busy! The American Automobile Association (AAA) predicts that 55.37 million people will travel at least 50 miles away from their homes over the five-day Thanksgiving holiday weekend, whether by car, airplane, train, bus or cruise ship. That’s up 2.5% from 2022 and the third busiest since AAA started tracking Thanksgiving travel in 2000, trailing only 2005 and 2019.

  • On the road again AAA predicts around 49 million people will travel by car, a 1.7% increase over last year (though still 1.6% below 2019’s pre-pandemic 50 million). Roadways in Atlanta, Boston, Los Angeles, New York City, San Francisco, Seattle and Washington, D.C., are expected to be the most congested. Gas prices have declined 15% over the past two months, from $3.88 per gallon in mid-September to $3.30 now—a huge benefit to travelers.
  • Fly the busier, but cheaper, skies An estimated 4.70 million people will fly over the holiday, 6.6% above year-ago levels and 2.5% above the pre-pandemic volume in 2019. The average price for a domestic flight over the Wednesday-through-Sunday period has actually declined around 9% from a year ago, according to booking and price-tracing app Hopper. Those with more flexibility who flew over the 11-day stretch from last Friday to next Tuesday saw deeply discounted domestic prices about 18% lower than 2022, says the travel search engine Kayak. The Transportation Security Administration and industry trade group Airlines for America report that the broad Thanksgiving holiday is expected to set a record of nearly 30 million passengers, up 11.5% from last year and 6% higher than 2019.
  • What about skateboards? Another 1.55 million travelers are leaving town by bus, rail, or cruise ship, a nearly 11% increase over 2022 levels and 4.5% above pre-pandemic travel trends in 2019.
  • Weather wild card While the weather on turkey day should be terrific in New York City for Macy’s annual Thanksgiving Day Parade, much of rest of the country likely won’t be as lucky. The West and East Coasts are expecting heavy rain leading into Thanksgiving, and Buffalo (of course) is bracing for a major snowstorm.

Dinner break The American Farm Bureau Federation reports in its 38th annual survey that Thanksgiving dinner for 10 people will be 4.5% less expensive at around $61, compared with last year’s record $64. But this year’s price with all the fixings should still be 25% higher than in 2019.

Turkey market stabilizing Much of the decline in the overall price of Thanksgiving dinner is due to a sharp drop in cost for turkeys, typically the most expensive part of the meal. The average retail price for a 16-pound turkey is $27.25 ($1.71 per pound), down 5.6% from 2022. The lower cost of turkeys in 2023 is due to a drop in avian influenza cases. Last year, the record outbreak in 39 states led to the death of 7 million turkeys (about 3.6% of the nation’s population), leading to a spike in prices. In addition, increased truck availability is easing supply-chain constraint and reducing transportation costs.

What about the trimmings? The Farm Bureau says that side dishes are expected to be 4% more expensive this year. Pumpkin pie mix is up by 3.7% and dinner rolls are around 3% higher. But whipped cream will be 23% cheaper, cranberries down 18%, frozen pie crusts down by 5%, and cubed stuffing lower by 3%.

Adult beverages mixed Although beer prices are 5.3% higher this year, wine is a relative bargain, up only 1.2%. So pair your delicious Thanksgiving dinner with a nice pinot noir, zinfandel or syrah. If you prefer white, the most popular traditionally are chardonnay, sauvignon blanc, pinot grigio and riesling.

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Tags Markets/Economy . Equity .

Views are as of the date above and are subject to change based on market conditions and other factors. These views should not be construed as a recommendation for any specific security or sector.

Consumer Price Index (CPI): A measure of inflation at the retail level.

Gross Domestic Product (GDP) is a broad measure of the economy that measures the retail value of goods and services produced in a country.

S&P 500 Index: An unmanaged capitalization-weighted index of 500 stocks designated to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. Indexes are unmanaged and investments cannot be made in an index.

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