US Markets
Stocks notched solid gains in November as post-election enthusiasm and holiday shopping combined to fuel the advance.
The Dow Jones Industrial Average led, gaining 7.54%. The Standard & Poor’s 500 Index picked up 5.73%, while the Nasdaq Composite added 6.21%.1
Post-Election Rally
Despite a jittery start to November, stocks rallied following Election Day results and gained momentum following the Federal Reserve’s second consecutive interest rate cut. An economic update that showed a 2.2% rise in third-quarter productivity helped support the move.2,3,4
The combination of news pushed the S&P 500 to cross the 6,000 mark, while the Dow breached 44,000 for the first time.5
A Mid-Month Breather
After all three major averages hit record highs, markets took a breather as investors anxiously awaited fresh inflation data. News that retail and wholesale prices ticked up slightly in October sent markets down, even though both numbers were in line with economists’ expectations.6
Stocks remained under pressure after unexpected comments from Fed Chair Powell, who said the Fed wasn’t “in a hurry” to cut rates.
Similar comments from another Fed official seemed to reinforce Powell’s sentiment and put additional pressure on stocks.7
Holiday-Shopping Optimism
But year-end optimism, especially around consumer spending during the holiday shopping season, re-started the rally.
News that weekly jobless claims fell to a seven-month low also boosted momentum.8
Despite the headwinds from the Fed about rate adjustments, tough talk on tariffs and a handful of disappointing Q3 reports from technology companies, the S&P 500 and Dow Industrials each posted their best monthly gain of the year.9
What Investors May Be Talking About in December
In the month ahead, investors will most likely be monitoring a wide range of economic reports for clues about the Fed’s thinking.
Specifically, investors will be watching holiday spending.
A solid holiday shopping season can suggest a strong economy, which may prompt the Fed to reconsider its position on rate adjustments as it pursues its dual mandate of stable prices and maximum employment.
Also, expect any report on the jobs market to be scrutinised.
Some recent numbers have been influenced by the anomalous effects of hurricanes and a worker strike in September, which may have influenced the final numbers. The Fed has a variety of weekly and monthly reports on the state of the jobs market.
The Fed’s next scheduled two-day meeting ends on December 18. Fed Chair Powell has repeatedly said the Fed’s decisions are data-dependent, so all economic reports can factor into rate adjustment talks.
World Markets
The MSCI EAFE Index fell 0.74% in November, in stark contrast to U.S. averages that benefited from a post-election rally.11
European markets were mixed. The United Kingdom rose 1.35%, and Germany picked up 2.88%. Meanwhile, Italy lost 3.64%, while France dropped 1.57%. Spain was flat (-0.27%).12
Emerging markets were also mixed. Egypt fell 0.52%, while India added 0.52%.13
Pacific Rim stocks were generally lower. Japan’s Nikkei and China’s Hang Seng were among the hardest hit. Australia was a bright spot, picking up 3.38%.14
The Fed
The Federal Reserve cut short-term interest rates by 0.25% following its November meeting, bringing the benchmark Fed Funds Rate target range to 4.5% to 4.75%.
At Fed Chair Jerome Powell’s post-meeting press conference on November 7, he signaled less certainty on the pace of future rate adjustments. He explained the ongoing need to weigh the risks of a resurgence in inflation and a cooling labor market.24
The FOMC’s next meeting is scheduled for December 17-18.
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1. WSJ.com, November 30, 2024
2. WSJ.com, November 6, 2024
3. WSJ.com, November 7, 2024
4. MarketWatch.com, November 7, 2024
5. WSJ.com, November 8, 2024
6. WSJ.com, November 13, 2024
7. WSJ.com, November 14, 2024
8. MarketWatch.com, November 21, 2024
9. WSJ.com, November 29, 2024
10. SectorSPDR.com, October 31, 2024
11. MSCI.com, November 30, 2024
12. MSCI.com, November 30, 2024
13. MMSCI.com, November 30, 2024
14. MSCI.com, November 30, 2024
15. Reuters.com, November 27, 2024
16. WSJ.com, November 1, 2024
17. The Wall Street Journal, November 15, 2024
18. Reuters.com, November 15, 2024
19. KPMG.com, November 19, 2024
20. WSJ.com, November 21, 2024
21. Realtor.com, November 26, 2024
22. The Wall Street Journal, November 13, 2024
23. KPMG.com, November 27, 2024
24. The Wall Street Journal, November 7, 2024
25. NPTrust.org, 2024
26. DonorBox.org, September 18, 2024
27. DoubletheDonation.com, 2024
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