11/4-11/8/24 Weekly Market Recap - Movers, Macro, Monetary, and Fiscal

Summary - Movers, Macro, Monetary, and Fiscal

We’re finished another action-packed week! Between Election Day, the Fed’s decision on interest rates, and a slew of earnings reports, market volatility was very high. It was one of those weeks where a lot of moving parts  shook up global markets. Take a look below at the index movements as well as some strong performers!

Global Movements of the week

U.S. Equities with (5 day % change)

  • S&P 500 Index - SPX: 5,995 (+4.75%) 

  • Dow Jones Industrial Average: DJIA: 43,998 (+.59)

  • Big Movers of the Week: 

    • Tesla: $321.22 (+32.28%)

    • Nvidia (NVDA): $147.63 (+8.51%)

    • Palantir (PLTR): $58.39 (+41%)

      • Congratulations to the TMT Group’s Palantir pitch led by Astrid Qing!

    • Costco (COST): $943.80 (+6.52%)

    • Bitcoin (BTC): 76.287.24 (+10.37%)

    • Citigroup (C): 68.63 (+10.07%)

Chinese Equities:

  • Shanghai Composite (SHCOMP): 3,452.3 (+5.39%)

    • Support and stimulus form the Chinese central bank helped rally investor confidence these past months

Hong Kong Equities:

  • Hang Seng Index (HSIK): 20,728.19 (+0.78%)

Japanese Equities:

  • Nikkei 225: 39,500.37 (+2.67%)

European Equities:

  • UK Index (UKX): 8,072.39 (-1.37%)

Emerging Markets:

  • Brazil (IBOV): 127,881.54 (-2.02%)

Yield Curve:

  • Short-term rates: Lowering, signaling a recovery from the previous slowdown, but the economy is still not fully back on track.

  • Long-term rates: Rising, as traders speculate on potential rate cuts and continued growth, especially with Trump’s presidency in focus. This indicates that investors are preparing for long-term economic expansion despite short-term volatility.


FX Markets (5 day % change):

  • USD/CNY: 7.18 (+0.8%)
    The Chinese yuan saw weakness against the dollar, up by 0.8%.

  • USD/JPY: 152.512 (-0.29%)
    The yen strengthened a bit against the dollar by 0.29%.

  • USD/EUR: 0.933 (+1.51%)
    The dollar gained 1.5% against the euro, reflecting investor optimism around U.S. economic data.

Commodities (5 day % change):

  • Gold: $2,691 (-0.51%)

  • Silver: $31.27 (-4.42%)

  • Cocoa: $7,119.30 (+2.72%)

  • Crude Oil: $70.43 (+0.01%)

U.S. Monetary & Fiscal Policy:

  • Fed Rate Cut: The Federal Reserve has cut rates by 25 bps, bringing the range to 4.5-4.75%. A purple tied  Jerome Powell reaffirmed that election results would not directly influence monetary policy, and committed to serving until 2026, regardless of political pressure from Trump. 

  • Speculative Trump Fiscal Policy: After the Trump victory was cemented on Wednesday, speculative market sentiment caused strong movements in the equities market. First, Trump has been vocal on increasing American production of fossil fuels, quoting “drill, baby, drill.” In the past week, the energy sector (XLE) has been up an impressive 6.48%. Moreover, Trump highlights the elimination of Basel III, easing M&A approval, and changing liquidity regulations upon the financial sector (XLF), influencing a 5.26% return. Finally, Trump’s promise to return industrial manufacturing jobs to America via a 20% base tariff led a rally in the industrials sector (XLI) of over 4.2%. 

Global Macroeconomic News:

  • China’s Consumer Stocks: China-focused consumer stocks are seeing a rise, driven by market optimism following Trump’s election victory. Traders are betting that China will prioritize boosting domestic demand to counteract the potential tariffs introduced by Trump’s administration.

    • Beijing Fiscal Stimulus: China announced a fiscal stimulus plan, but it fell short of expectations, with no immediate plans to boost housing or consumption. The plan to refinance $1.4 trillion in local government debt aims to stabilize the Chinese economy, but concerns persist over its ability to manage the trade war with the U.S.

  • Geopolitical Tensions: There were significant tensions surrounding anti-Semitic attacks in Amsterdam, with over 60 arrests following attacks on Israeli soccer fans. This uptick in violence raises concerns over potential political instability in Europe.

  • Iranian Plot Against Trump: A foiled assassination plot orchestrated by Iran’s paramilitary Revolutionary Guard has raised new fears in the Middle East, with oil prices potentially impacted by regional instability.

  • European Central Bank (ECB):
    The ECB is not expected to rush into rate cuts despite growing risks to growth stemming from Trump’s economic policies. Markets anticipate a potential 25 bps rate cut at the next ECB meeting.

  • Inflation Spikes: Inflationary pressures in Brazil and Chile are rising, with the CPI spiking to 4.5%, well above the target of 3%. A major contributor to this spike has been energy costs, exacerbated by a historic drought that is impacting agricultural production—particularly in soybeans, corn, sugar, coffee, and beef.

What to Look for Next Week:

  • CPI Report: Watch for data on consumer price inflation to see how the Consumer Purchasing Index has shifted.

  • PPI: Producer price inflation will provide a glimpse into how wholesale prices are changing across various sectors.

Food for Thought:
What industry do you think Trump's planned 60% base tariff on all Chinese goods will impact the most?

Sources:
Bloomberg Terminal, Wall Street Journal, Trading Economics, Google Finance, Market Watch

Have a great week investing!


Sincerely,
Aremorph

Comments

  1. rebeccalea8486November 9, 2024 at 12:47 PM

    Wow! I'm going to start putting money into the markets! This blog breaks down tough topics into understandable words!

    ReplyDelete
  2. Waterorca14November 11, 2024 at 3:00 PM

    You really break down difficult concepts easily!

    ReplyDelete

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