The Week in Review: 11/25/2024
“Quality is not an act; it is a habit.” ~Aristotle
Good Morning ,
The stock market returned to its winning ways last week after taking a breather the previous week, as investors digested post-election gains.
“Buy-the-dip” trading contributed to the upside bias following some consolidation.
The small cap Russell 2000 and S&P Mid Cap 400 benefitted from a capital rotation last week, gaining 4.5% and 4.2%, respectively.
|
Index |
Started Week |
Ended Week |
Change |
% Change |
YTD % |
|
DJIA |
43444.99 |
44296.51 |
851.52 |
2 |
17.5 |
|
Nasdaq |
18680.12 |
19003.65 |
323.53 |
1.7 |
26.6 |
|
S&P 500 |
5896.56 |
5969.34 |
72.78 |
1.2 |
25.1 |
|
Russell 2000 |
2303.84 |
2406.67 |
102.83 |
4.5 |
18.7 |
The S&P 500 and Nasdaq Composite moved higher 1.7% and 1.2% respectively and the Dow Jones Industrial Average settled 2.0% higher.
Losses in some mega cap names, specifically Alphabet, limited index performance.
Alphabet (Google’s parent company) shares dropped 4.2% last week after news that the DOJ is pushing for a forced sale of Chrome and potentially Android.
Subsequent reports indicated that Microsoft-backed and ChatGPT owner OpenAI is considering developing its own browser, which could represent a viable competitive threat that provides Google with some firepower in its antitrust case.
Target was another notable loser last week, dropping 17.8% (and 20% during Wednesday's session) after its disappointing earnings report and outlook.
Fellow retailer, and Dow component, Walmart jumped 7.4% on the week following its favorable earnings report.
The headliner on the earnings calendar was NVIDIA, which settled flat on the week.
NVDA's Q3 report garnered mixed responses due to a slight deceleration in its revenue growth rate. The report was solid overall though, and the company said demand for its Blackwell chip is "staggering."
Other story stocks included crypto-related names, which were reacting to price action in Bitcoin. The cryptocurrency reached a new high of $99,768 on Friday.
Early in the week, geopolitical angst was increased after reports that President Putin had lowered Russia's threshold for using nuclear weapons, that Ukraine had launched U.S.-made and UK-made missiles into Russia, and that Russian Foreign Minister Lavrov had called the attack on Russia an "escalation signal."
Treasuries settled mixed after last week's slate of economic reports. The 10-yr yield dropped two basis points to 4.41% and the 2-yr yield jumped seven basis points to 4.37%.
The economic lineup last week included stronger-than-expected Existing Home Sales for October, another decrease in weekly jobless claims, a U.S. S&P Global Services PMI for November that showed an acceleration in services sector activity, and a Manufacturing PMI that remained in contraction in November, but at a slower pace than what was seen in October.
The final reading of the University of Michigan's Consumer Sentiment for November showed a dip to 71.8 from 73.0 in the preliminary reading, but it was still above October's final reading of 70.5.
2024 has been a surprise to many investors as to the gains and where they came from… the top 3 sectors for 2024 are Financials, Information Technology, & Communications Services, up 36.5%, 34.7% & 32.8% respectively.
The bottom three sectors for 2024 are Healthcare, Materials, & Real Estate, up 7.1%, 11.1%, & 12.9% respectively. All decent gains as well.
Earnings season continues in the twilight hour for the third quarter.
With 95% of S&P 500 companies having reported, the blended year-over-year earnings growth rate for the quarter is 5.8%. This is the fifth consecutive quarter of year-over-year earnings growth. Revenues are up a commensurate amount, up 5.6% over the same period (source: Factset).
There will be a handful of earnings reports. We will hear from Best Buy, Dell, HP, and J.M. Smucker to name a few.
On the economic front, we will get a second look at third-quarter GDP as well as updated housing data from New Home Sales and Pending Home Sales for the month of October.
Despite the decline in the federal funds rate, mortgage rates are back on the rise after their initial dip. We will see how this is affecting home sales and new mortgage applications. Additionally, we will receive the meeting minutes from the last FOMC meeting.
Our week will be shortened due to the Thanksgiving holiday. Markets are closed on Thursday and will close early on Friday at 1PM EST.
Have a safe and Happy Thanksgiving!
Michael D. Hilger, CEP®
Managing Director
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