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SPEAKER_00: On Ice, my weekly market review, December 1st, 2024.
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SPEAKER_00: Everything is relative.
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SPEAKER_00: Wall Street breathed a huge sigh of relief at the beginning of a holiday-shortened
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SPEAKER_00: week that,
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SPEAKER_00: despite all the glaring shortcomings of Trump's pick,
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SPEAKER_00: Scott Besant,
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SPEAKER_00: financial markets have at least not been saddled with a clownish Dr.
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SPEAKER_00: Oz-type figure as Treasury Secretary.
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SPEAKER_00: A degree of calm returned to bond markets on Monday as interest rates eased and
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SPEAKER_00: stocks moved higher at the open and held on to most of their gains throughout the session.
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SPEAKER_00: Yet again,
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SPEAKER_00: small cap names were the star performers,
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SPEAKER_00: indicative of the continuing healthy broadening of participation in the rally,
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SPEAKER_00: and tech and AI stocks remained on ice,
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SPEAKER_00: only minimally participating.
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SPEAKER_00: An exception was Macy's,
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SPEAKER_00: whose stock got trashed at the open just days before its traditional New York City parade,
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SPEAKER_00: after the company was forced to cancel its scheduled earnings report as a result of
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SPEAKER_00: the uncovering of an accounting scandal affecting $150 million worth of expenses
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SPEAKER_00: not taken into consideration.
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SPEAKER_00: They were hidden, it would appear, by an individual employee.
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SPEAKER_00: Trump's tariff policy began to come into focus on Tuesday,
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SPEAKER_00: with an opening salvo of specific threats on social media,
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SPEAKER_00: and overseas markets reacted badly.
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SPEAKER_00: By the time Wall Street opened,
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SPEAKER_00: Asian and European stocks had already buckled,
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SPEAKER_00: but it couldn't derail the upward momentum of the US stock indexes,
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SPEAKER_00: which continued higher,
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SPEAKER_00: with the notable exceptions of the three big US automakers,
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SPEAKER_00: which all tumbled on the tariff proposals.
- 1:51
SPEAKER_00: Both the S&P 500 and the Dow Jones Industrial Average reach new all-time highs yet again,
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SPEAKER_00: as traders seem to price in that the president-elect's approach on this issue may
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SPEAKER_00: be just characteristic bluff and bluster.
- 2:06
SPEAKER_00: As one equity strategist put it, this is just Trump's negotiating style.
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SPEAKER_00: Step one, punch in the face.
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SPEAKER_00: Step two, let's negotiate.
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SPEAKER_00: A deluge of retail sector earnings reports proved mixed at best.
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SPEAKER_00: Coles was an absolute disaster,
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SPEAKER_00: punished by a 23% dive in the stock price in the first 30 minutes of trading.
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SPEAKER_00: Best Buy was far from great.
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SPEAKER_00: Abercrombie & Fitch's fairly decent results failed to reach a very high expectation bar,
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SPEAKER_00: although the news out of Dick's Sporting Goods was positive.
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SPEAKER_00: The minutes from the last Fed meeting didn't really throw up any red flags about an
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SPEAKER_00: interest rate cut at the next one in December,
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SPEAKER_00: the probability of which is now moving steadily higher again.
- 2:56
SPEAKER_00: There was a big pre-holiday economic data dump on Wednesday morning.
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SPEAKER_00: Most importantly,
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SPEAKER_00: the Personal Consumption Expenditures Price Index inflation measure,
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SPEAKER_00: upon which the Fed relies heavily to determine its interest rate policy,
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SPEAKER_00: which came in a touch hotter than expected at 2.3% annualized.
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SPEAKER_00: Initial jobless claims, durable goods, and the latest Q3 gross domestic product estimate
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SPEAKER_00: of a 2.8% annualized increase all came in looking perfectly fine.
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SPEAKER_00: Markets mostly yawned in response at the open on what was the last full trading day
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SPEAKER_00: of the month,
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SPEAKER_00: but there were rather troubling earnings reports from Dell,
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SPEAKER_00: Hewlett-Packard,
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SPEAKER_00: and CrowdStrike.
- 3:48
SPEAKER_00: Stocks retreated from record territory,
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SPEAKER_00: and a six-day winning streak for the S&P 500 finally came to an end after prices
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SPEAKER_00: drifted lower in a light-volume session,
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SPEAKER_00: for the most part driven by yet more weakness in big tech names.
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SPEAKER_00: Traders returned to their desks on Friday for a half-day session showing no signs
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SPEAKER_00: of any hangover,
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SPEAKER_00: pushing stock prices further north to mourn new record highs for the S&P 500 and
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SPEAKER_00: the Dow Jones Industrial Average.
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SPEAKER_00: And November proved to be the strongest month of 2024 so far for both these indexes.
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SPEAKER_00: The path of least resistance into year end remains solidly higher,
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SPEAKER_00: and a few somewhat more conventional cabinet choices has been a market positive.
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SPEAKER_00: If that continues and growth stays Goldilocks,
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SPEAKER_00: then the S&P 500 could well remain above 6,000 and advance between here and New
- 4:47
SPEAKER_00: Year's Eve.
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SPEAKER_00: Once the confetti in Times Square has all been swept up in a few weeks' time,
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SPEAKER_00: however,
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SPEAKER_00: the outlook may possibly start to feel rather different.