Monthly Market Update – November 2024

By Simmons Investment Advisors on December 1, 2024

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Headlines From Last Month:

• US stocks rallied sharply in November, spurred by Trump’s Presidential election victory and overall positive corporate earnings.  We saw the best post-election day rally in history as the S&P 500 rallied 2.53% on November 6th, while the Dow jumped 3.57% (more than 1,500 points) and the Nasdaq 2.95%.  The Russell 2000 (small caps) rallied 5.8% as well on that day.
• War in the Middle East:
  • On Nov 19^th, Russian President Putin lowered the threshold for using nuclear weapons in response to the US allowing Ukraine to use American-made long-range missiles.
  • On Nov 26^th, a cease-fire between Israel and Hezbollah went into effect.  President Biden announced it the day before, saying that it was “designed to be a permanent cessation of hostilities.”
• US Presidential election:
  • Donald Trump will return to the White House after defeating current VP, Kamala Harris.  He and Grover Cleveland are the only presidents to be elected to non-consecutive terms. 
  • Republicans will control the White House and the Congress, taking over the Senate while narrowly retaining control of the House of Representatives – this will ease the way for Trump’s policies.  These policies appear to include lower corporate taxes and looser regulations, which should drive corporate profits.
• The Federal Reserve cut rates by 25 basis points, as anticipated.
• The price of Oil (WTI spot) declined -2.25% in November.
• Gold prices dropped -4.14% last month, up 28.6% for the year.
• Mortgage Rates (looking at a 30-year fixed mortgage) continued to move higher, up to 6.95% (from 6.75% a month ago and 6.05% at the end of Sept), following the general trend of longer-term interest rates.
• Sports:
  • The Orlando Pride beat the Washington Spirit to win the NWSL championship.  Six-time World Player of the Year, Marta, has been on the Pride since 2017.
  • Our local High School (Greely) won State Championships for Girls and Boys Soccer and 8-Man Football:
    • Girls’ soccer defeated Hermon, 3-1, capping an undefeated season.  In the Southern ME Regional finals, they beat Cape Elizabeth 2-1.
    • Boys’ soccer also finished the season undefeated, downing John Bapst, 3-0. They beat local rival Yarmouth 1-0 in the Southern ME Regionals. 
    • The Football team beat Mt Ararat 58-20 in their Championship game.
  • Rafael Nadal concluded his illustrious career at age 38, competing for Spain in the Davis Cup.  Over the past 20+ years, he won 22 Grand Slams, including 14 Roland Garros titles.
  • Mike Tyson returned to the boxing ring in an over-hyped, underwhelming bout against You-Tuber Jake Paul, hobbling the distance (8 two-minute rounds) and losing unanimously.

• Economic Data:
  • Employment/Unemployment:
    • US Nonfarm Payrolls increased by 12K in October, down sharply from September’s increase of 254K, and below estimates for 100K. 
    • Unemployment held at 4.1%, in line with expectations.
  • Retail Sales:
    • Rose 0.4% in October, above expectations of 0.3%.  September’s increase was revised from 0.4%, up to 0.8% ⁽ⁱ⁾.
  • Inflation:
    • Consumer Price Index:
      • CPI rose 0.2% in October, up 2.6% on an annual basis, both in-line with consensus estimates ⁽ⁱ⁾.
      • Core CPI (excludes food and energy) rose 0.3%, and 3.3% year-over-year, also as expected ⁽ⁱ⁾.
    • Producer Price Index:
      • PPI rose 0.2% for the month, as anticipated.  On a 12-month basis, it increased 2.4% ⁽ⁱ⁾.
      • Core PPI (excludes food and energy) rose 0.3%, in-line with estimates.  From a year ago, it increased 3.1% ⁽ⁱ⁾.
    • Personal-Consumption Expenditures Index:
      • PCE rose 0.2% and 2.3% from a year ago (both as expected) ⁽ⁱ⁾.
      • Core PCE (excludes food and energy) rose 0.3% and 2.8% (both as anticipated) from a year ago ⁽ⁱ⁾.
    • Personal Spending rose 0.4% last month, as forecasted ⁽ⁱ⁾.
    • Personal Income jumped 0.6%, well above the expected rise of 0.3%⁽ⁱ⁾.

US Equities:

• The Dow closed above 44,000 and the S&P above 6,000 for the first time.  The Nasdaq also hit a new all-time high, closing at 19,298 on November 11^th. 
• Sector performance:
  • The Consumer Discretionary sector was the best performing sector last month, up 13.24%, followed by Financials (10.16%), Industrials (7.33%), and Energy (6.28%) ^(vii). 
  • Healthcare was the weakest sector, up only 0.13% ^(vii).
  • Year-to-date, each sector remains in the green, led by Financials (36.02%), Communication Services (34.21%), Information Technology (34.19%), Utilities (30.07%), Consumer Discretionary (26.19%), and Industrials (25.84%).  The biggest laggard is now Health Care, up only 7.76% ^(vii).
• Growth vs. Value:
  • Growth (Russell 1000 Growth Index) rallied 6.18% with Value (Russell 1000 Value Index) jumping 6.11%.
  • For the year, Growth is up 31.38% and Value is up 20.39%.
• Small-cap stocks (Russell 2000 Index) rallied 10.7% last month, up 20.11% in ‘24. 

• Monthly performance, calculated on a price return basis:
  • Dow jumped 7.54%
  • S&P 500 rose 5.20%
  • Nasdaq rallied 6.21%
• Year-to-date performance, calculated on a price return basis:
  • Dow is up 19.16%
  • S&P 500 is up 25.84%
  • Nasdaq is up 28.02%

US Fixed Income – Yields finished relatively unchanged month over month.  Following the election results, yields jumped as investors sold off bonds and priced in an inflationary environment from expected Trump policies.  Tariffs and an expanding deficit could lead to fewer Federal Reserve rate cuts.  But yields pulled back at the end of the month:

• Yields on US Treasuries at the end of November:
  • 1 year – 4.28% ^(iv)
  • 2 year – 4.15% ^(iv)
  • 10 year – 4.17% ^(iv)
• As a point of reference, at October month-end, yields were at:
  • 1 year – 4.27% ^(iv)
  • 2 year – 4.17% ^(iv)
  • 10 year – 4.29% ^(iv)

Regards,

Mike & Steve

DISCLOSURE: All data is as of previous month-end (November 30^th, 2024).  Sources include www.cnbc.com (i), https://www.cnn.com/business (ii), https://finance.yahoo.com (iii), other public websites, Hightower Advisors, LLC (iv), FactSet (v), Barron’s (vi) and www.spglobal.com (vii).