- 0:01
SPEAKER_00: Wow.
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SPEAKER_00: My weekly market review, November 10th, 2024.
- 0:06
SPEAKER_00: Wow, where to even begin unpacking last week?
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SPEAKER_00: Okay, let's give it a try.
- 0:15
SPEAKER_00: As an immense week began,
- 0:17
SPEAKER_00: Wall Street was acutely aware that following the 2020 election,
- 0:21
SPEAKER_00: stock prices swung around in both directions in an 11% range in the 24 hours
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SPEAKER_00: following the closing of the polls.
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SPEAKER_00: And this time around, the election looked even closer than it did then.
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SPEAKER_00: If we go back to 2000,
- 0:35
SPEAKER_00: stocks fell 12% between election day and the Supreme Court's removal of the
- 0:41
SPEAKER_00: ambiguity surrounding the outcome a few weeks later.
- 0:45
SPEAKER_00: Throw in the current proximity to all-time record highs in stock prices,
- 0:49
SPEAKER_00: and it was perhaps no surprise that many traders appeared to have decided to sit
- 0:54
SPEAKER_00: things out until some kind of clarity emerged.
- 0:58
SPEAKER_00: As one analyst predicted, November 5th is going to be a blindfolded mud wrestle in a minefield.
- 1:06
SPEAKER_00: Stocks were flat at the open on Monday but drifted lower throughout the session as,
- 1:11
SPEAKER_00: if anything,
- 1:12
SPEAKER_00: uncertainty about the eventual winner actually increased on the final day of the campaign.
- 1:18
SPEAKER_00: Election Day finally arrived on Tuesday and traders and financial newsletter
- 1:23
SPEAKER_00: writers hunkered down for what was expected to be a long caffeine-fueled 24 hours.
- 1:30
SPEAKER_00: Stocks opened cautiously higher on light volume with a calm before the storm feel
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SPEAKER_00: as Americans headed to the polls,
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SPEAKER_00: but then accelerated sharply upwards as the session wore on with small caps leading
- 1:41
SPEAKER_00: the way.
- 1:43
SPEAKER_00: This was mostly a reaction to a growing sense at the time that however things were
- 1:48
SPEAKER_00: to shake out on a presidential level,
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SPEAKER_00: neither party seemed likely to achieve a sweep of the presidency,
- 1:54
SPEAKER_00: House and Senate.
- 1:56
SPEAKER_00: This might help prevent anything too crazy from happening in the coming years,
- 2:01
SPEAKER_00: and Wall Street really doesn't like crazy.
- 2:05
SPEAKER_00: Tuesday turned into Wednesday,
- 2:07
SPEAKER_00: and as the results poured in,
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SPEAKER_00: a resounding Trump win came into view pretty quickly,
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SPEAKER_00: along with a confirmed Republican Senate grab,
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SPEAKER_00: with the House too close to core yet,
- 2:18
SPEAKER_00: but likely also leaning red,
- 2:20
SPEAKER_00: which would complete the trifecta,
- 2:22
SPEAKER_00: effectively giving the new president pretty much a blank check.
- 2:27
SPEAKER_00: Trades reacted swiftly.
- 2:28
SPEAKER_00: U.S.
- 2:29
SPEAKER_00: stock index futures rallied substantially higher.
- 2:32
SPEAKER_00: Interest rates showed up and Bitcoin soared to new all-time record high levels.
- 2:39
SPEAKER_00: Europe woke up to the prospect of another Trump presidency,
- 2:43
SPEAKER_00: an almost certain explosion of a global trade war and a change dynamic in the
- 2:47
SPEAKER_00: Ukraine conflict,
- 2:48
SPEAKER_00: and local stocks sold off.
- 2:52
SPEAKER_00: When U.S.
- 2:52
SPEAKER_00: markets opened,
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SPEAKER_00: stock indexes ripped higher,
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SPEAKER_00: once again led by skyrocketing small caps on the prospect that the new
- 3:00
SPEAKER_00: administration will juice the economy and corporate earnings with lower taxes and deregulation,
- 3:07
SPEAKER_00: as well just pure relief that the hurdle of the U.S.
- 3:10
SPEAKER_00: election uncertainty had been cleared regardless of who won.
- 3:15
SPEAKER_00: Wall Street now had the certainty it craves at least.
- 3:19
SPEAKER_00: On the other hand,
- 3:20
SPEAKER_00: bonds crashed heavily as interest rates roared higher on the back of fears about a
- 3:25
SPEAKER_00: Trump-triggered spike in US inflation and deficit spending.
- 3:30
SPEAKER_00: Gains on this side of the Atlantic mounted as the session continued and it ended up
- 3:35
SPEAKER_00: being the best single day for the S&P 500 in two years.
- 3:39
SPEAKER_00: The index closed at yet another record high and within striking distance of the $6,000 milestone.
- 3:46
SPEAKER_00: The Nasdaq also made new all-time highs.
- 3:49
SPEAKER_00: But the star performer of the day was the Russell 2000 small cap index, which closed up nearly 6%.
- 3:57
SPEAKER_00: As smaller companies were seen to be the main beneficiaries of a high tariff policy,
- 4:02
SPEAKER_00: like the one Trump has been talking about.
- 4:05
SPEAKER_00: Possibly the penultimate interest rate setting meeting of the Federal Reserve as an
- 4:10
SPEAKER_00: independent central bank,
- 4:12
SPEAKER_00: free from presidential interference,
- 4:14
SPEAKER_00: if Trump has his way,
- 4:16
SPEAKER_00: concluded on Thursday afternoon in advance of Chairman Jerome Powell's press conference.
- 4:22
SPEAKER_00: Stocks built further on the previous day's massive gains in advance of the 2 p.m.
- 4:27
SPEAKER_00: Eastern announcement.
- 4:29
SPEAKER_00: It was notable,
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SPEAKER_00: however,
- 4:31
SPEAKER_00: that Wednesday's biggest winners were Thursday's underperformers,
- 4:35
SPEAKER_00: which is actually a good sign for market breadth.
- 4:38
SPEAKER_00: To the surprise of absolutely no one,
- 4:41
SPEAKER_00: interest rates were cut by a quarter of a point by unanimous decree from the Fed Committee.
- 4:47
SPEAKER_00: Neither the decision itself or the chairman's rather tense presser afterwards had
- 4:52
SPEAKER_00: any real impact on stock prices,
- 4:54
SPEAKER_00: but the morning's gains carried the indexes deeper into new all-time record high territory.
- 5:01
SPEAKER_00: The Fed's move reinforced that nothing in the election or recent data has changed
- 5:06
SPEAKER_00: the fact that we are still in an interest rate cutting cycle,
- 5:10
SPEAKER_00: and that's good for stocks.
- 5:13
SPEAKER_00: Perhaps the most interesting answer given by Powell,
- 5:16
SPEAKER_00: who has been Fed chairman since 2018 and whose term ends in May 2026,
- 5:22
SPEAKER_00: was when he was asked whether he would resign if asked to do so by Trump,
- 5:26
SPEAKER_00: to which he gave an emphatic one-word answer,
- 5:29
SPEAKER_00: no.
- 5:32
SPEAKER_00: Wall Street took something of a well-deserved breather on Friday,
- 5:36
SPEAKER_00: exhaling to digest the week's tumultuous moves.
- 5:39
SPEAKER_00: But stocks still managed to move higher on the day,
- 5:43
SPEAKER_00: with the S&P 500 briefly breaking through the 6,000 level before closing at its
- 5:49
SPEAKER_00: 50th all-time record high of the year.
- 5:52
SPEAKER_00: The stock market has its certainty, but it may come with a frothy price tag.
- 5:58
SPEAKER_00: The index scorecard for the week showed the S&P 500 up by 4.7%,
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SPEAKER_00: its best week of 2024,
- 6:06
SPEAKER_00: and the NASDAQ 5.7% higher.
- 6:09
SPEAKER_00: And the Russell 2000 small cap index with an astonishing 8.8% rise, its best week for years.
- 6:19
SPEAKER_00: Making investment decisions and moving assets around based on politics is a fool's errand.
- 6:26
SPEAKER_00: Long after the torrid election reaction has faded,
- 6:29
SPEAKER_00: Fed policy,
- 6:30
SPEAKER_00: economic growth and earnings will again be what steers this market.
- 6:35
SPEAKER_00: Making knee-jerk portfolio-changing decisions right now is a really, really bad idea.
- 6:42
SPEAKER_00: The best investment advice I can give now is to quote the next president from his
- 6:47
SPEAKER_00: 2020 campaign in reference to the Proud Boys.
- 6:51
SPEAKER_00: Stand back and stand by.