Stock Market Update Monday November 25, 2024 The Dow Jones Industrial Average surged 400 points to reach a new record high, while the small-cap Russell 2000 index achieved an all-time high, buoyed by investor optimism following the announcement of Trump's Treasury Secretary pick. Broader equity markets continued their upward momentum, with the S&P 500 and Nasdaq 100 each advancing by 0.3%.
Away From Stocks: Fixed-income markets experienced a notable rally, as 10-year Treasury yields plunged 15 basis points to 4.27%, signaling strong demand for government debt. In the commodities space, both WTI crude oil and gold faced sharp sell-offs, each dropping approximately 3% to settle at $69 per barrel and $2,626 per ounce, respectively.
Meanwhile, the cryptocurrency market saw a pullback, with Bitcoin retreating to $94,600. Market volatility, as measured by the VIX, eased further, closing below 15—a level often associated with investor complacency or confidence in the market's direction.
The day highlighted robust risk appetite across equities, tempered by recalibrations in energy, metals, and digital assets.
⚡️Get Started https://www.algotradealert.com/get-started
Free Trial 🔐Premium Membership➕📉Stock Market Update Daily News Letter 📈
👇 Premium Content 👇
The nomination of Scott Bessent as Treasury Secretary over the weekend provides a strong tailwind for the ongoing market rally, presenting a dominant narrative likely to overshadow incoming macroeconomic data in the week ahead. Market participants will be keenly focused on the reaction to this appointment, as it signals significant policy implications and strengthens bullish sentiment.
Scott Bessent's market-friendly credentials are well-established, given his advocacy for a "3-3-3" policy framework that resonates with pro-growth strategies. This plan aims to reduce the budget deficit to 3% of GDP by 2028, stimulate a sustained 3% GDP growth rate through deregulation, and achieve energy independence by adding an incremental 3 million barrels of oil (or its equivalent) per day to the production pipeline. From an investment standpoint, these initiatives collectively bolster equity markets. Lower deficits suggest a favorable interest rate environment with "yields staying low," promoting capital inflows. Robust GDP growth underscores the potential for the U.S. to "grow out of debt," reducing fiscal pressures over time. Furthermore, increased energy production implies "low inflation," a stabilizing factor for both consumer and producer prices.
The nomination reinforces the perception of a "Trump put" in the markets, where policies are geared toward maintaining equity strength and economic expansion. Scott Bessent's leadership adds significant economic credibility to the administration, enhancing market confidence in fiscal and monetary policy alignment. Adding to the optimism, this week aligns with a positive seasonal period for equities and benefits from the tailwind of a shortened trading week, historically a period of low volatility and upward bias. This confluence of factors sets a constructive tone for markets, amplifying the bullish momentum catalyzed by Scott Bessent's nomination.
Macro This Week:
Tuesday, Nov 26
9:00 AM ET: Sep S&P CoreLogic CS Home Price Index (expected: +0.30%)
10:00 AM ET: Nov Conference Board Consumer Confidence (expected: 112)
10:00 AM ET: Oct New Home Sales (expected: 725k)
2:00 PM ET: Nov FOMC Meeting Minutes
Wednesday, Nov 27
8:30 AM ET: 3Q S 2024 GDP QoQ (expected: +2.8%)
8:30 AM ET: Oct Preliminary Durable Goods Orders (expected: +0.5%)
10:00 AM ET: Oct Core PCE MoM (expected: +0.28%)
Thursday, Nov 28
Thanksgiving Holiday (Markets Closed)
Bottom Line:
On November 8, 2024, our proprietary algorithm issued buy signals for both the S&P 500 Equal Weight ETF (RSP) and the Dow Jones Industrial Average ETF (DIA). This development indicates that all five major indexes are now aligned with buy alerts. Consequently, any potential pullbacks in these markets should be viewed as strategic buying opportunities for investors looking to capitalize on upward momentum. Our next key cycle pivot date falls on November 15, 2024, which is expected to serve as a primary inflection point. Our year-end outlook remains optimistic, supported by our proprietary algorithm and favorable liquidity conditions. Cash on the sidelines continues to accumulate, creating potential for a strong inflow into equities. Jerome Powell & Co. maintain a dovish stance, reflecting a "no landing" economic scenario, while China's PBOC has introduced significant monetary easing, adding further global stimulus. October's volatility aligns with historical seasonal patterns; yet we believe markets will resume an upward trajectory following the election, paving the way for a strong December rally. The VIX is projected to settle in the 10-11 range, indicating a reduction in implied volatility as we approach the holiday season, which typically supports a risk-on sentiment in equity markets.
