The story of this week centers on mega-cap dominance and market concentration. I watched the S&P 500 climb 1.0% while its equal-weighted counterpart dropped 1.3% – a telling divergence that speaks volumes about market dynamics. The heavy lifters? Apple, NVIDIA, Microsoft, Tesla, and Amazon led the charge, with the Vanguard Mega-Cap Growth ETF surging an impressive 3.7%.
A fascinating development came from Salesforce’s Agentforce AI system, which sparked renewed enthusiasm in the AI sector. But the real showstopper? Bitcoin breaking $100,000 for the first time – though interestingly, this milestone didn’t trigger the usual market euphoria I’ve typically observed in my trading career.
Sector Performance
The market showed clear winners and losers this week, with a stark divide between growth and value sectors:
• Consumer Discretionary: +5.9%, driven by strong holiday sales
• Communication Services: +4.1%, benefiting from digital advertising growth
• Information Technology: +3.4%, propelled by AI enthusiasm
• Consumer Staples: -0.8%, showing defensive positioning
• Financials: -1.8%, pressured by yield curve dynamics
• Energy: -4.6%, hit by oil price weakness
Bonds and Treasuries
The fixed-income market delivered another winning week, reflecting shifting monetary policy expectations. The 2-year Treasury yield dipped to 4.10%, while the 10-year settled at 4.15%. I’m seeing patterns similar to previous cycles where yield curves begin normalizing ahead of potential policy shifts.
US Market Highlights
Employment data caught my attention this week. November’s payroll growth of 227,000 exceeded expectations, while unemployment ticked up to 4.2%. The services sector presents an interesting puzzle – growth slowed to 52.1 PMI, yet we’re still in expansion territory. Factory activity, however, continues to contract – its eighth straight month at 48.4.
Black Friday sales hit a record $74.4 billion globally, with U.S. spending soaring 10.2% to $10.8 billion. I found it particularly interesting that mobile purchases dominated, and AI chatbot usage for finding deals increased by 1800% year-over-year.
Global Markets
The US-China chip war has intensified, creating ripple effects across global markets. Beijing’s critical mineral export ban in response to US restrictions on advanced memory chips presents a complex challenge for tech supply chains.The OECD’s projection of 3.3% global growth for 2025 seems optimistic given current headwinds. China’s central bank has pledged bold support through various measures, including cutting financing costs and boosting liquidity.
Commodities & Crypto Corner
Oil markets continue their downward trend, with Brent hovering around $71.30 and WTI at $67.40. OPEC’s decision to postpone production increases until 2025 reflects a cautious outlook I haven’t seen since the pandemic’s early days.
The metals market offers some intrigue. Copper’s trading around $9,100 per tonne, buoyed by China’s manufacturing revival. Gold remains steady at $2,630 – a level that, in my experience, often precedes significant market moves.
Bitcoin achieved a historic milestone this week by surpassing $100,000 for the first time on Thursday. Interestingly, while this was a momentous achievement for the cryptocurrency, it didn’t trigger the typical market enthusiasm one might expect – the stock market notably remained subdued on Thursday, even after the S&P 500 had recorded 11 gains in 12 previous sessions.
Key Events & Calendar
This week’s calendar is packed with market-moving events. The November CPI release on Wednesday will be particularly telling – economists expect a 0.3% rise in both headline and core figures. The PPI data Thursday should provide additional inflation insights, with forecasts of 0.3% headline and 0.2% core increases.
Key earnings reports to watch:
• Monday: Oracle, Toll Brothers
• Tuesday: AutoZone, GameStop
• Wednesday: Adobe
• Thursday: Broadcom, Costco, Ciena
The Goldman Sachs U.S. Financial Services Conference starts Tuesday, followed by the Barclays Global Technology Conference on Wednesday – both events typically provide valuable insights into sector trends and corporate strategies.
Remember, markets are telling us a story through these numbers. As your guide through these financial waters, I’ll keep watching these trends and sharing insights to help you make informed decisions. Stay tuned for next week’s developments – they could be pivotal for setting the tone for the remainder of the year.
