The stock market rallied sharply last week. The Dow Jones Industrial Average rose 4.6% to 43,989 and at one point traded over 44,000 for the first time ever – the NASDAQ Composite jumped 5.7% to 19,287 – the Standard & Poor’s 500 Index rallied 4.7% to 5,996. The small cap Russell 2000 Index was especially a standout, soaring over 8.5% to 2,340. For the Dow and the S&P it was their best week in a year. The three major indices all finished the week at record highs!
The market rally was fueled by the conclusion of the election last Tuesday, with the Dow jumping over 1,500 points on Wednesday and the S&P and NASDAQ rising 2.5% and 3%, respectively. Investors are hoping the election outcome will result in favorable treatment on business issues such as deregulation, taxes, and mergers and acquisitions. Also supporting the stock market last week was an interest rate cut by the Federal Reserve. The Fed cut rates by a ¼ percentage point last week and Chair Powell stated he is “feeling good” about the economy.
Earnings Season continues in the week ahead with a fresh batch of reports. Companies scheduled to announce results this week include Home Depot, Shopify, Live Nation Entertainment, Tyson Foods, Cisco Systems, Advance Auto Parts, Applied Materials, and Walt Disney. We’ll also get some important economic data this week, most notably on inflation. The U.S. Bureau of Labor Statistics is scheduled to release the October Consumer Price Index on Wednesday, followed by the Producer Price Index on Thursday. Market expectations are for readings of a 2.5% year-over-year increase on the CPI and a 2.3% year-over-year increase on the PPI.
From all of us here at Southport Station to all of you who have served, we extend our deepest and most sincere thanks and appreciation for your service – Happy Veterans Day!
All the best – Southport Station Financial Management, LLC