The market’s resilience shone through this week, with small and mid-cap stocks leading the charge. The Russell 2000 and S&P Mid Cap 400 demonstrated impressive momentum, surging 4.5% and 4.2% respectively. This rotation into smaller companies signals growing investor confidence in broader market segments. The major indices weren’t far behind – S&P 500 and Nasdaq Composite each gained 1.7%, while the Dow Jones Industrial Average advanced 2.0%.
A particularly intriguing development emerged in the tech sector. Alphabet faced headwinds, dropping 4.2% after the Department of Justice pushed for potential divestitures of Chrome and Android. The plot thickened when Microsoft-backed OpenAI revealed plans to develop its own browser – a move that, ironically, might strengthen Google’s position against antitrust concerns.
The retail sector delivered quite a show this week. Target took a significant hit, tumbling 17.8% (including a dramatic 20% plunge during Wednesday’s session) following disappointing earnings. Meanwhile, Walmart demonstrated its market leadership with a robust 7.4% gain after its earnings report exceeded expectations.
Bonds and Treasuries
The fixed-income market painted an intricate picture this week. The 10-year yield eased two basis points to 4.41%, while the 2-year yield climbed seven basis points to 4.37%. This narrowing spread between short and long-term rates deserves close attention, as it often precedes significant market shifts.
US Market Highlights
The domestic landscape buzzed with significant developments:
• Gary Gensler’s upcoming departure from the SEC Chair position signals potential regulatory shifts
• Housing market showed renewed vigor with October sales jumping 3.4%
• Business activity reached a 31-month peak with the S&P Composite PMI hitting 55.3
• Spirit Airlines entered Chapter 11 while maintaining operations
• Comcast’s decision to spin off its cable networks marks a strategic pivot
• Tesla shares rallied on potential autonomous driving regulation changes
Global Markets
International markets presented a complex tapestry of developments:
• Moscow updated its nuclear doctrine, raising geopolitical tensions
• Japan unveiled an ambitious $141B stimulus package
• China maintained its lending rates steady at 3.1% for 1-year and 3.6% for 5-year loans
• UK inflation surprised with a 2.3% October reading
• Canada’s inflation hit the 2% mark, complicating monetary policy decisions
Commodities & Crypto Corner
The energy sector, oil markets retreated significantly, with Brent and WTI touching yearly lows around $71 and $67, respectively. OPEC revised its global demand growth forecast down to 1.82 million barrels per day.
Gold declined for the second consecutive week, falling to around $2,570 as rising bond yields put pressure on the precious metal.
The cryptocurrency market delivered extraordinary drama this week. Bitcoin reached a staggering $93,500 before settling below $90,000, driven by over $2 billion in net ETF inflows.
Dogecoin surprised with a 32% weekly gain, partly fueled by speculation around Elon Musk’s potential government role.
Calendar
The Thanksgiving-shortened week still packs plenty of market-moving potential:
• Tuesday: Consumer confidence data and new home sales figures
• Wednesday: Personal income reports, GDP revision, and Fed minutes
• Notable earnings from Dell, CrowdStrike, and Analog Devices
The PCE price index release on Wednesday warrants special attention as the Fed’s preferred inflation gauge. Additionally, Pony AI’s IPO could shake up the autonomous driving sector, targeting a valuation of up to $4.6B.Remember, holiday-shortened weeks often bring unexpected volatility. Stay vigilant but measured in your approach.
