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25.11.2024 09:17 AM
On Friday, Wall Street's key indexes ended the trading session with solid gains, securing a positive weekly result. Investors were pleased with economic indicators that signal stable activity in the world's largest economy.
November brought a 31-month high in the business activity indicator. The main driver of optimism is the expectation of monetary easing and possible tax breaks. These prospects are associated with the upcoming change in political course, which Donald Trump promises to implement after taking office next year.
Amid confidence in the growth of the domestic market, the Russell 2000 index (.RUT), which focuses on small company stocks, became a bright leader. On Friday, it added 1.8%, and over the week, its growth amounted to an impressive 4.3%. As a result, the index reached its maximum in recent weeks.
However, not all companies were able to please their shareholders. Thus, Alphabet (GOOGL.O) shares continued to fall, losing another 1.7% after a 4% decline on Thursday. The reason is the statement of the US Department of Justice, accusing the tech giant of monopolizing the online search market. AI leader Nvidia (NVDA.O) also fell 3.2% after choppy trading. The volatility came after investors released a mixed quarterly guidance.
Amid the S&P 500's gains, the value index (.IVX) rose 0.78%, reflecting a shift in investor sentiment. Companies that focus on long-term stability have begun to attract more attention than traditional growth stocks (.IGX).
"We're seeing a welcome shift in leadership from tech to a broader range of assets, as evidenced by the performance of the small-cap index and the strength of value stocks," said Mark Hackett, head of investment research at Nationwide.
Growth sentiment on Wall Street is providing a basis for optimism, although volatility risks remain. Investors continue to focus on key economic and corporate events that will set the tone for the market in the coming weeks.
All of Wall Street's major indices ended the day higher on Friday, gaining ground on positive investor sentiment. The Dow Jones Industrial Average (.DJI) added 426.16 points, or 0.97%, to close at 44,296.51. The S&P 500 (.SPX) rose 20.63 points, or 0.35%, to close at 5,969.34, and the Nasdaq Composite (.IXIC) rose 31.23 points, or 0.16%, to close at 19,003.65.
Among the S&P 500 sectors, industrials (.SPLRCI) showed the biggest gains, adding 1.36%. At the same time, the consumer discretionary sector (.SPLRCL) showed the worst result, falling by 0.69%.
The market ended the week on a positive note: the S&P 500 index rose by 1.68%, the Nasdaq added 1.73%, and the Dow showed an increase of 1.96%. Such results strengthen investors' confidence in the stability of the economy and support overall optimism in the market.
Investors continue to closely monitor the Federal Reserve's policy. Scenarios fluctuate between a pause and a possible rate cut, which is due to expectations about the impact of Donald Trump's initiatives on inflation. There's a 59.6% chance the Fed will cut rates by 25 basis points in December, according to CME Group's FedWatch tool. Such a move could be a powerful catalyst for further gains in markets.
Gap Inc. (GAP.N) shares soared 12.8% after the company issued a strong outlook. The Old Navy parent company raised its full-year guidance after reporting a strong start to the holiday season, signaling to investors that consumer demand remains strong.
Rising indices and positive corporate news suggest the market is poised for further gains, but uncertainty around the Fed's decisions remains a key risk factor. In the coming weeks, attention will be focused on consumer spending data and signals from the central bank, which could set the tone for the rest of the year.
Intuit (INTU.O), the owner of popular service TurboTax, is under pressure. On Thursday, the company released second-quarter revenue and profit guidance that fell short of Wall Street expectations. That sent shares plummeting 5.7% in Friday's trading session.
At the New York Stock Exchange (NYSE), gainers outnumbered losers by a wide margin, 3.2 to 1, indicating a preponderance of positive sentiment. The exchange also posted 532 new highs and only 41 new lows, a result that confirms that many companies are gaining ground.
The Nasdaq was also bullish, with 3,076 stocks ending the day in positive territory and 1,271 stocks in negative territory. The ratio of rising to falling stocks was 2.42 to 1.
The S&P 500 posted 83 new 52-week highs and only one new low. The Nasdaq Composite posted 179 new highs and 85 new lows.
Despite the overall improvement in the market situation, trading volume on U.S. exchanges amounted to 13.49 billion shares. This figure was below the average of 14.65 billion shares over the past 20 sessions. The decline in activity may be due to expectations of key economic data and Federal Reserve decisions.
Markets continue to show signs of resilience, but weak forecasts from individual companies such as Intuit point to ongoing risks. In the coming days, market participants will focus on corporate earnings and macroeconomic data, which could determine the direction of the future.
Market attention is focused on American consumers and the retail sector this week, as Black Friday kicks off the holiday shopping season. This period is traditionally a litmus test for consumer activity, especially in the face of continued pressure from high prices.
Early signals from major retailers show contrasting pictures. Walmart (WMT.N) on Tuesday revised its forecasts upward for the third time this year, noting strong demand. At the same time, Target (TGT.N) disappointed: on Wednesday, the company reported lowered expectations for sales and profit for the holiday season. That put a significant dent in the company's stock, which fell into the red.
The holiday shopping season will be an important indicator of the health of consumer spending, which accounts for more than two-thirds of the U.S. economy. While inflation has slowed from record levels of two years ago, high prices remain a challenge for shoppers, according to Abby Roach, a portfolio analyst at Allspring Global Investments.
Despite inflation pressures, Americans are showing a more positive outlook this holiday shopping season. According to a Morgan Stanley survey of nearly 2,000 consumers, 35% of respondents plan to spend more on holiday shopping than they did last year. That's well above the levels of the past two years, adding to optimism about the season.
Retail stocks will also be tested this season. In 2024, their dynamics were mixed: Walmart held its ground, while Target and some other large retailers faced volatility.
Black Friday and the following weeks promise not only to revive the shopping malls, but also to give clear signals about the state of the economy and consumer sentiment. All this will certainly have an impact on the stock market and strategic forecasts for 2025.
The largest retail companies demonstrate different scenarios of success amid economic challenges. Walmart, the industry leader by market capitalization, ended 2024 with an impressive increase in shares of more than 70%. Costco Wholesale (COST.O) also showed strong results, adding 46%. Online giant Amazon (AMZN.O), balancing retail and cloud technologies, increased its share price by 30%.
Not all market players were able to withstand the economic pressure. Shares of Dollar General (DG.N) and Dollar Tree (DLTR.O) have plunged 40% and 50%, respectively, with analysts blaming inflation on the low-income consumers who make up the discounters' core customer base.
Target (TGT.N) is also struggling. The company, which has focused on low-priced staples, has lost 12% of its value in a year. Forecasts suggest that competitors have managed to lure away value-oriented shoppers.
Two sectors of the S&P 500 index, which includes most retailers, showed moderate gains. Stocks related to consumer goods companies rose 23%, while the consumer staples sector gained 16%. By comparison, the overall gain for the S&P 500 was 25%.
The coming week will bring another wave of corporate earnings. On the agenda are earnings from giants like Best Buy (BBY.N), Macy's (M.N), Nordstrom (JWN.N) and Urban Outfitters (URBN.O). The data will help assess how retailers are coping with the holiday season, which is traditionally a key time for the entire industry.
An equally important event will be the publication of the monthly consumer spending price index on November 27. This indicator, closely watched by the Federal Reserve, should provide additional signals about the state of inflation. According to forecasts, the index will increase by 2.3% in annual terms in October.
2024 has become a test for retailers: leaders continued to strengthen their positions, while more vulnerable companies faced pressure. Investors are closely monitoring the results of the holiday season and economic data to assess what awaits the sector in 2025.
Asian markets started the week with positive dynamics. Stocks in the region rose, and futures on US indices showed strengthening. The dollar's weakness amid falling bond yields has caught the attention of traders, a key driver of the market.
The appointment of Scott Bessent, a well-known fund manager, as US Treasury Secretary has sparked a wave of optimism among investors. Bessent is expected to act as a bridge between markets and Washington, adding confidence in his ability to smooth out market turbulence.
MSCI's broadest index of Asia-Pacific shares (.MIAP00000PUS) was up 1.6% by Monday morning, while S&P 500 futures were up 0.5%, nearing all-time highs. The move followed a 0.3% gain in the S&P 500 cash index (.SPX) on Friday, before the appointment was announced.
The US currency weakened amid a massive buying spree of Treasury bonds. The dollar fell 0.7% against the yen and 0.6% against the euro, reflecting a 7 basis point decline in U.S. long-term bond yields to 4.341%.
Japan's Nikkei (.N225) jumped 1.6%, while South Korea's Kospi (.KS11) added 1.5%. Australia's stock market (.AXJO) also rose 0.7% to new highs.
Against this backdrop, Chinese markets remain in the shadows, with Trump administration threats of higher tariffs and Beijing's weak stimulus measures weighing on investor sentiment.
As the week begins, Asian markets are confident in the stability of the global economy, but risks remain, particularly around China's trade restrictions and economic policies. Scott Bessent's appointment reinforces expectations that the US will be able to maintain a balance between political stability and market interests, which will be an important indicator for the future.
As the new trading week begins, Hong Kong's Hang Seng Index (.HSI) is up slightly by 0.2%. However, mainland blue chips (.CSI300) are down 0.2%, reflecting uneven investor sentiment.
Markets are expecting a quieter trading week ahead of Thanksgiving, which is celebrated in the US on Thursday. The holiday pause could weigh on liquidity, leaving market participants waiting for further cues.
Investors continued to closely monitor the appointment of Scott Bessent as Donald Trump's Treasury Secretary. His views on economic policy are already being discussed in the context of possible tax cuts, tariffs and stricter immigration policies.
Bessent previously said in an interview with CNBC that he supports gradual introduction of tariffs. In a conversation with Bloomberg, he emphasized the need to reduce the national debt, and in the Wall Street Journal, he advocated tax reform and deregulation. He paid special attention to stimulating bank lending and energy production.
Scott Bessent, before his appointment, worked with such well-known figures as George Soros and Jim Chanos, and also ran his own hedge fund. His experience and connections make him an important figure in the financial markets.
In the currency markets, the Japanese yen was trading at 153.76 to the dollar, demonstrating its traditional dependence on Treasury yields.
The euro managed to recover to $1.0477 after falling to a two-year low on Friday ($1.03315). Sterling also strengthened, rising 0.5% to $1.2592, after falling to $1.2475 on Friday, its lowest since May.
Investors continue to weigh the changes amid political appointments and currency volatility. Bessent's appointment provides a window into the future of US economic policy, while the forex market shows signs of adapting to new challenges. A week of less trading activity lies ahead, but key macro data remains in focus.
The Australian dollar gained 0.6% to $0.6538, while the New Zealand kiwi, despite recently falling to a one-year low, rose 0.5% to $0.5865. This came amid expectations of a key Reserve Bank of New Zealand meeting on Wednesday. Analysts are forecasting a 50 basis point rate cut, but the market estimates a one-third chance of a more aggressive 75 basis point cut.
The cryptocurrency market continues to show growth. Bitcoin, which has slightly increased over the weekend, is trading at $97,511. On Friday, it reached an all-time high of $99,830, which was the result of expectations of a more lenient regulatory environment for cryptocurrencies under the Trump administration.
The cryptocurrency has gained 45% in recent weeks, which coincided with Donald Trump's convincing victory in the November 5 election. The election of several pro-cryptocurrency lawmakers to Congress has increased investor confidence in the future of the sector.
In the commodity markets, oil prices remain near two-week highs. This is facilitated by increased geopolitical tensions between Western countries and key oil producers Russia and Iran. Supply disruptions continue to support prices.
Brent crude futures rose 0.2% to $75.30 a barrel, while West Texas Intermediate crude rose 0.2% to $71.38. Both benchmarks posted significant gains of around 6% last week.
Currencies, cryptocurrencies, and oil continue to be influenced by political and economic factors. The Reserve Bank of New Zealand meeting and the geopolitical situation in the Middle East will be key events of the week, which could set a new direction for markets.
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*A análise de mercado aqui postada destina-se a aumentar o seu conhecimento, mas não dar instruções para fazer uma negociação.
