Wall Street’s best week yet of 2024 saw major indexes surge, fueled by election buzz and strong consumer sentiment data. Optimism around the new administration’s pro-growth policies propelled the S&P 500 to its record-breaking 50th high of the year, underscoring investor confidence in the economic outlook as markets rally in response to the election’s impact.

Tesla Reclaims Trillion-Dollar Valuation

Tesla was a standout performer this week, with its stock surging enough to reclaim a trillion-dollar valuation. After recent pullbacks, Friday saw a rotation into defensive sectors like utilities and consumer staples, which benefited from oversold conditions and took the lead by the week’s end.

Investor Appetite Surges with $20 Billion Inflow

Investor interest in U.S. equities has surged following the election, with $20 billion flowing into U.S. equity funds in a single day. This massive influx, particularly into small-cap stocks, suggests high expectations for pro-business policies from the incoming administration, which investors believe could provide a solid boost to these sectors.

The S&P 500 briefly touched the 6,000 level, a psychologically significant milestone that could drive even more investor interest. However, some analysts caution that the market may consolidate its gains before launching into a year-end rally.

Bond Market Stabilizes Amid Declining Treasury Yields

After a volatile week, the bond markets found stability as Treasury yields declined. The U.S. dollar also continued its recent winning streak, adding further strength to market sentiment. By the end of the week, the S&P 500 rose by +4.7%, the Nasdaq Composite jumped by +5.7%, and the Dow climbed +4.6%, reflecting a broad rally across the markets.

Weekly Performance Recap  

For the week: 

• S&P 500: +4.7% 
• Nasdaq Composite: +5.7% 
• Dow Jones: +4.6% 

Friday’s Closing Levels:  

Market Sentiment Buoyed by Election Results

It doesn’t take much to read the market right now—investors are clearly pleased with the election outcome. The rally gained momentum after Republicans secured the House, raising expectations for market-friendly policies under the new administration. With these developments, stocks have reached all-time highs and appear likely to continue climbing.

FOMO Rally and Lack of Pullback

While this rally seems promising, it has a distinct Fear of Missing Out (FOMO) feel. Ideally, I would have preferred a “sell on the news” scenario post-election to create a buying opportunity on a dip. However, despite the upward momentum, we haven’t seen any significant pullback since the August lows. The market trend is still firmly upward, with no apparent obstacles in sight.

Major Market Milestones Reached

The rally has pushed major indices to notable milestones: the S&P 500 has hit 6,000, the Dow reached 44,000, and the Nasdaq climbed above 21,000. These new highs raise the question—will they attract profit-taking soon? It’s something investors will have to watch closely in the days ahead.

Source: CBOE, Bloomberg 

This commentary is written by James Gomes, a seasoned finance industry veteran with extensive experience of over 30 years, including a substantial tenure at a reputable US bank exceeding 20 years.

Risk Disclosure 
Securities, Futures, CFDs and other financial products involve high risks due to the fluctuation in the value and prices of the underlying financial instruments. Due to the adverse and unpredictable market movements, large losses exceeding your initial investment could incur within a short period of time.
Please make sure you fully understand the risks of trading with the respective financial instrument before engaging in any transactions with us. You should seek independent professional advice if you do not understand the risks explained herein.  

Disclaimer 
This information contained in this blog is for general reference only and is not intended as investment advice, a recommendation, an offer, or an invitation to buy or sell any financial instruments. It does not consider any specific recipient’s investment objectives or financial situation. Past performance references are not reliable indicators of future performance. Doo Prime and its affiliates make no representations or warranties about the accuracy or completeness of this information and accept no liability for any losses or damages resulting from its use or from any investments made based on it.  
The above strategies reflect only the analysts’ opinions and are for reference only. They should not be used or considered as the basis for any trading decisions or as an invitation to engage in any transaction. Doo Prime does not guarantee the accuracy or completeness of this report and assumes no responsibility for any losses resulting from the use of this report. Do not rely on this report to replace your independent judgment. The market is risky, and investments should be made with caution.