Markets
November 2024 was a remarkable month for the U.S. stock market, driven by a post-election rally. The S&P 500 surged nearly 6%, closing at all-time highs. Mid-cap and small-cap stocks posted their best monthly gain since December 2023, up 8.8% and 10.9% respectively. Outside of the U.S., stocks in Europe and Asia declined due to Trump’s tariff threats, with the situation worsened by a stronger dollar. Foreign developed stocks finished down -0.6% while emerging markets were lower by -3.6%.
The rally was largely attributed to the quick and conclusive outcome of the U.S. presidential election, where the Republican party secured majorities in both chambers of Congress. This political shift is expected to lead to economic policies favoring lower taxes, higher tariffs, and deregulation, which many investors believe will stimulate economic growth.
In the bond market, U.S. Treasury yields experienced significant fluctuations. The 10-year U.S. government bond yield rose to 4.5% before settling closer to 4.2% by the end of the month. European government bond yields also saw declines, particularly in the face of political uncertainties in Germany and France.
Economic Data
US economic activity appeared mixed according to the hard data released for October, but more recent business surveys and labor market figures pointed to a healthier outlook in November. The Federal Reserve cut the target range for the federal funds rate for the second time by 25 basis points to 4.50-4.75%. Fed Chair Jerome Powell signaled a cautious approach ahead.
Looking Ahead
In conclusion, November was a significant month for the U.S. stock market, marked by a strong post-election rally and notable gains in mid-cap and small-cap stocks. The political shift following the U.S. presidential election has set the stage for economic policies that many investors believe will drive growth. As we move forward, it will be crucial to monitor these developments and their impact on both domestic and international markets.
