DFG Navigator Archives | November 2024

Your Capital Markets Snapshot: Equity Markets Experienced Significant Gains

Last week, the equity markets experienced significant gains, with the S&P 500 posting its largest weekly gain of the year. This surge was largely driven by positive reactions to the U.S. election results, which were seen as favorable for corporate earnings. The Federal Reserve's decision to cut interest rates by 25 basis points also played a role, although the Fed maintained a cautious stance on inflation. Bond yields saw notable fluctuations, initially spiking mid-week before settling down. Overall, the markets were buoyed by strong economic data and investor sentiment, leading to record highs for the major indices.

Your Capital Markets Snapshot: Equity Markets Continued to Slide

Equity markets continued to slide for the second week, with the S&P 500 and NASDAQ posting weekly losses of over 1%, while the Dow's decline was fractional. The volatility was driven by concerns over the growth potential of technology stocks and artificial intelligence as well as increasing uncertainty in the outcome of Tuesday’s presidential election. Despite the volatility, earnings momentum remained positive, with third- quarter earnings for S&P 500 companies on track to rise by an average of 5.1%. On the bond market side, U.S. government bond yields continued to rise, marking the sixth increase in the past seven weeks with the yield on the 10-year note jumping 12 bps from the prior week to close at 4.37%.

Your Capital Markets Snapshot: Markets Experienced Notable Movements

Last week was eventful week as markets experienced notable movements driven by various factors. Rising bond yields contributed to interrupting the S&P 500’s six-week streak of gains, as stronger-than-expected economic data continue to temper expectations surrounding rate cuts. The US stock market saw mixed results as the S&P 500 and Dow fell; while the NASDAQ posted its seventh consecutive weekly gain, due to the tech sector being one of the only sectors with positive growth for the week. The yield on the 10-year U.S. Treasury note climbed, reflecting investor caution about inflationary pressures and future interest-rate cuts. Despite the down week and rising rates, the U.S. economy continues to appear resilient as initial jobless claims have continued to come in below estimates, GDP growth expectations remain around 3% for 2024, and recession expectations continue to decline.

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