The markets demonstrated remarkable resilience this week, with buy-the-dip trading driving significant gains. The Russell 2000 and S&P Mid Cap 400 emerged as standout performers, surging 4.5% and 4.2% respectively, benefiting from strategic capital rotation. The broader market showed strength too, with the S&P 500 and Nasdaq Composite each advancing 1.7%, while the Dow Jones Industrial Average posted a solid 2.0% gain.
Some mega-cap names faced challenges. Alphabet experienced a 4.2% decline amid Department of Justice pressure regarding potential forced sales of Chrome and Android. Adding to the tech drama, OpenAI’s potential browser development could present a significant competitive challenge to Google’s dominance.
The retail sector painted a contrasting picture. Target stumbled significantly, dropping 17.8% following disappointing earnings and outlook. However, Walmart demonstrated its market leadership with an impressive 7.4% weekly gain. NVIDIA remained surprisingly flat despite reporting strong fundamentals and describing demand for its Blackwell chip as “staggering.”
Bonds and Treasuries
Treasuries showed mixed performance this week, with notable movements in key yields. The 10-year Treasury yield decreased by two basis points to 4.41%, while the 2-year Treasury yield increased by seven basis points to 4.37%.
Several economic reports influenced Treasury performance:
- Strong existing home sales data for October
- Decreasing weekly jobless claims
- Accelerating services sector activity in November’s U.S. S&P Global Services PMI
- Manufacturing PMI showing slower contraction compared to October
- University of Michigan’s Consumer Sentiment dipping to 71.8 from 73.0
The narrowing spread between the 2-year and 10-year yields suggests ongoing market uncertainty about the economic outlook and future Fed policy decisions. The Federal Reserve’s meeting minutes indicate a gradual approach to future rate cuts, with markets now pricing in a 66% chance of a December cut and expectations for two additional cuts in 2025
US Market Highlights
The economic landscape reveals several key developments:
- Personal spending increased 0.4%, while personal income jumped 0.6%
- Core PCE, the Fed’s preferred inflation gauge, rose to 2.8%
- Headline inflation settled at 2.3%
- Manufacturing sector shows improvement but remains in contraction territory
- Federal Reserve minutes indicate a gradual approach to future rate cuts
- Housing market showed unexpected strength with better-than-anticipated existing home sales
Global Markets
International markets presented a complex tapestry of developments:
- Israel and Lebanon reached a landmark permanent ceasefire agreement
- Trump announced aggressive tariff plans: 10% on Chinese imports, 25% on Canada and Mexico
- Canada’s economic growth slowed to 1%, marking six consecutive quarters of per-capita GDP contraction
- Bank of Korea surprised markets with consecutive rate cuts, lowering benchmark rates to 3.00%
- India’s growth cooled to 5.4%, its slowest pace since 2022
- China’s manufacturing PMI improved slightly to 50.3, while services PMI balanced at 50.0
Commodities & Crypto Corner
Did you know? The total cryptocurrency market has grown from zero to $3.2 trillion in just 14 years – a feat unmatched by any other asset class in history.The crypto market is making headlines with Bitcoin nearly touching $100,000, reaching $99,768. Ethereum surged to $3,300, while Solana reached $264.
Ripple showed remarkable strength with a 32% gain to $1.40.In traditional commodities, oil markets remain volatile amid geopolitical tensions.
Brent crude trades at $73, while WTI hovers around $70. Metal markets show mixed performance, with copper at $9,000 per tonne and aluminum reaching $2,630.
Gold continues its impressive run, trading at $2,685.
Key Events & Calendar
The most significant market-moving events will likely be Powell’s speech on Wednesday and the jobs report on Friday. Next week’s calendar is packed with market-moving events:
Economic Data:
- November nonfarm payrolls (consensus: 200K)
- October JOLTS report
- ADP private employment data
- ISM Services Index
- Factory Orders
Key Earnings:
- Salesforce (CRM)
- Lululemon (LULU)
- Kroger (KR)
- Marvell Technology (MRVL)
- Dollar General (DG)
Notable Events:
- Federal Reserve Chair Powell’s appearance at NY Times DealBook Summit
- Multiple speaking engagements by ECB Chief Lagarde
- Final manufacturing and services PMI data
I’m particularly interested in next week’s employment data, as October’s modest 12K addition was significantly impacted by strikes and weather events. The upcoming report should provide a clearer picture of underlying labor market dynamics.
