The S&P 500 rallied 4.9% this week, helped by the Fed softening its policy stance and by hope that U.S-China trade tensions would be meaningfully eased at the G-20 Leaders Summit. For the month, the benchmark index rose 1.8%.
Meanwhile, the Dow Jones Industrial Average gained 5.2%, the Nasdaq Composite gained 5.6%, and the Russell 2000 gained 3.0%. For the month, the respective indices gained 1.7%, 0.3%, and 1.5%.
The stock market had one of its best days of the year on Wednesday when Federal Reserve Chair Jerome Powell said he sees current interest rates "just below" neutral. That proved to be a rally point because the language Mr. Powell used in early October indicated a view that the fed funds rate was "a long way from neutral."
Mr. Powell added that there is no preset policy path, and the Fed will be data-dependent in its decision making, which pleased investors. By highlighting risks, though, that included previous rate increases, trade disputes, and Brexit/EU political uncertainty, the market chose to read between the lines that the Fed chair isn't wedded to three rate hikes in 2019. On a related note, the FOMC's minutes from its November 7-8 meeting, which were released on Thursday, did nothing to upset the notion that the Fed will be hiking rates next month; the CME FedWatch Tool puts the chances at 82.7%. This week, all S&P sectors finished higher with the consumer discretionary (+6.4%), information technology (+6.1%), health care (+5.9%), and communication services (+5.5%) sectors outperforming.
The rally began with the consumer discretionary group rising on the back of continued strength from th e U.S. consumer. Reports of record online Black Friday sales and encouraging forecasts for Cyber Monday sales helped lift investor sentiment. The SPDR Retail ETF (XRT) rose 5.1% this week, and Amazon (AMZN) climbed 12.5%.
Conversely, the defensive-oriented real estate (+2.7%), consumer staples (+2.9%), and utility (+2.7%) sectors underperformed the broader market, though still finished with respectable gains.
Looking at other markets, the Treasury yield curve saw some flattening with the 2-yr yield losing one basis point to 2.81%, and the 10-yr yield losing four basis points to 3.01%. The U.S. Dollar Index increased by 0.3% to 97.20, and WTI crude added 0.1% to $50.67/bbl, though lost over 20.0% this month.
Macro :
- $80 Billion Locked in a ‘Golden Cage’ in Austria May Be Set Free
- U.S. Financial Markets to Shut Wednesday to Honor Bush (2)
- S&P 500 Expected to Remain Flat in 2019, Stifel’s Bannister Says
- Brexit Could Challenge Ireland’s Economic Recovery, S&P Says
- New York Hedge Fund Brenner West to Close: WSJ - https://on.wsj.com/2Qv7kG9
- Deutsche Bank Sees S&P 500 Rising to 3,250 Next Year on Growth
- S&P 500 Expected to Remain Flat in 2019, Stifel’s Bannister Says
Keep an eye on :
- AD NA : Ahold Delhaize could make buys to enter Germany, France, Italy
- AIR FP : As Bombardier Flails, Belfast Factory Seeks More Outside Work
- AIRN SW : Airopack Plans to Raise EU117M Via Rights Offering
- BAMI IM : Banco BPM Finalized Consumer Credit Reorg, To Explore Agos IPO
- BAS GY : BASF, CVC Said to Explore Forming Construction-Chemicals Giant
- BN FP : Danone Struggling to Sell Its Earthbound Farms Unit: NY PostBanca
- CRG IM : Carige tries to back out of Creditis sale to Chenavari
- ACA IM : Profamily sold to Agos Ducato by Banco BPM for EUR 310m; Agos Ducato to consider listing over next two years
- DBK GY : Deutsche Bank Says No Board Members Were Formally Interrogated
- ENI IM : Eni Is in Talks to Grow Presence in Oman, UAE: Reuters
- EVK GY : Evonik methacrylates refresh bids due in December, sources say
- FME GY : NxStage/Fresenius Getting Renewed Questions From FTC: Cap Forum
- IMMO BB : Immobel Sells Cedet Building in Central Warsaw for EU129.5m
- BAER SW : Pictet Hires Middle East Wealth Mgmt Team From Julius Baer
- KARO SS : Karo Pharma Chairman Anders Lönner Dies
- MS IM : Mediaset Premium Concludes Sale of Unit R2 to Sky Italia
- ORA FP : Orange Sees EU500m in Net Banking Income by 2023 in Europe
- SAN SM : Santander Seeks Double-Digit Growth In Private Wealth Assets: FT
- SLHN SW : Swiss Life CEO Doesn’t See Capital Dilution Risk: FuW
- SLHN SW : Swiss Life looking for small to medium acquisitions
- SOBI SS : Sobi: L/T Elocta, Alprolix Studies Confirm Safety, Efficacy
- TRB LN : Nexstar Said to Buy Tribune Media in $4.1 Billion Deal: Reuters
- VAO GY : Vapiano Names Cornelius Everke CEO