[Chart courtesy of MarketWatch.com]

1. Moving the market

Equities began the session on a bullish note, with the S&P 500 and Nasdaq reaching new record highs.

Following yesterday’s mixed performance, the major indexes appeared to shift back into bullish mode. However, it remains uncertain whether we will see a repeat of the post-election surge.

Private payrolls, as reported by ADP, grew less than expected in November, with only 146,000 positions added compared to the anticipated 163,000. Additionally, the October surge of 233,000 jobs was revised down to 184,000. This will be followed by Friday’s November labor report, which could significantly impact the market.

Traders are also focused on Fed Chair Powell’s speech in New York this afternoon, which will be a moderated discussion.

The Fed’s Beige Book was released, indicating that the sluggish, flat, and declining conditions observed in September and November had reversed. This, combined with a strong jobs report on Friday, could be enough for the Fed to pause rate cuts for the foreseeable future.

This news propelled the markets into overdrive, with the major indexes achieving solid gains after some mid-day sideways movement. The Nasdaq led the charge, while Small Caps lagged.

The Mega-Cap tech basket surged to a new record high as bond yields retreated. The dollar came off its highs for the day and ended unchanged, while gold swung wildly but closed at the upper end of its recent trading range.

Bitcoin benefited from the nomination of a pro-digital asset SEC head and the fall of the French government, rising slightly above the $99,000 level.

Currently, there is a tug-of-war between investors who believe in the Santa Claus rally and those who remain skeptical after November’s stellar performance.

[Chart courtesy of MarketWatch.com]

1. Moving the market

The major indexes took a breather early on after a relentless climb over the past few months, with November standing out as the best performing month of the year.

Both the S&P 500 and Nasdaq hit record highs yesterday, continuing their strong post-election gains, with the S&P 500 up 4.6% and the Nasdaq up 5.2%. The Dow also saw a 6% increase since the election. However, Small Caps dropped sharply as the Nasdaq outperformed.

Despite initial bearish pressures, the S&P 500 and Nasdaq managed to eke out small gains by the end of the session. This came after South Korea reversed its martial law announcement, leading to a recovery in the Won currency and a bounce in the Korea ETF EWY from its early lows.

On the economic front, job openings in October were reported at 7.74 million, significantly higher than the expected 7.5 million, marking the largest increase in 14 months. We’ll have to wait and see what the revisions reveal in a few weeks.

Bond yields rose moderately, the Mega Tech basket approached its post-election highs, the dollar fluctuated without clear direction, and gold closed higher but gave back some early gains.

Bitcoin mirrored this pattern, initially surging on the Korean news before pulling back and finding support around the $95k mark. Crude oil outperformed, nearing the $70 level once again.

Will bullish sentiment remain strong enough to turn December into a repeat of November?

[Chart courtesy of MarketWatch.com]

1. Moving the market

The S&P 500 and Nasdaq edged higher into record territory, while the Dow lagged after previously touching the 45,000 milestone.

Intel, AI server maker Super Micro, and Tesla all saw significant gains, propelling the Nasdaq to lead today’s rally. November was the best month of the year for both the Dow and the S&P 500, with gains of 7.5% and 5.7%, respectively.

Small Caps, despite a significant pullback in July, benefited from potential tax cuts proposed by Trump and surged more than 10% in November. However, Bitcoin, through the ARKB ETF that we own, outperformed all with a 38% gain for the month.

Because of its volatility, Bitcoin pulled back today, bouncing off the $95,000 level as it continues to pursue the $100,000 milestone.

With the Nasdaq in rally mode, it’s no surprise that the Mega Cap tech stocks advanced as well. Bond yields were mixed, with the 2-year yield tumbling after an early surge. The dollar recovered from its recent slide, while crude oil dropped but managed to defend its $68 level.

While retail investors are thrilled with the performance of the indexes, caution is advised as insiders are selling into this rally:

It’s crucial to have an exit strategy in place, as we appear to be in a blow-off phase.

[Chart courtesy of MarketWatch.com]

1. Moving the market

The markets experienced a slight pullback, likely due to profit-taking after a strong November, during which the S&P 500 climbed over 5%. The Nasdaq suffered the most, partly because Nvidia’s stock fell by more than 3.5%.

The latest Personal Consumption Expenditure (PCE) price index, the Federal Reserve’s preferred inflation gauge, rose 2.8% year-over-year. This is the highest reading since April, indicating that inflation remains a significant concern.

On the economic front, Durable Goods orders increased by 0.2% month-over-month in a preliminary estimate, which is notably lower than October’s 0.5% increase. Continuing Jobless Claims reached 1.9 million, the highest in three years, although initial claims slightly decreased to their lowest level since April.

Weak economic data led to a decline in bond yields, with the 10-year yield dropping to 4.25%, and the 2-year yield nearly erasing its post-election surge. The most shorted stocks saw early gains but lost them later in the session.

In addition to the major indexes, the Mega Cap basket also declined as the dollar fell, though it remained well above its post-election highs.

Gold posted modest gains, crude oil fell for the third consecutive day, but Bitcoin was the standout performer, reversing its recent downtrend to surge past the $97,000 mark again.

The markets will be closed tomorrow, and there will be a shortened session on Friday. I will be taking the rest of the week off and will return on Monday for the next market commentary.

Happy Thanksgiving!

[Chart courtesy of MarketWatch.com]

1. Moving the market

Despite an early dip, the Dow managed to recover, and all three major indexes maintained the bullish sentiment from the previous day, with the Nasdaq leading the charge. However, Small Caps diverged and closed in the red.

Traders were grappling with the implications of Trump’s announcement of 25% tariffs on products from Mexico and Canada, along with a smaller 10% levy on Chinese goods. There are lingering questions about whether these tariffs will be implemented and, if so, at what stage in the product creation chain they will take effect.

As a result, the dollar rallied, but American automakers Ford and GM suffered sell-offs. The import tariffs are expected to impact not only foreign cars but also domestic ones, due to the importation of several vital parts.

Several macroeconomic data points, such as slowing home price growth, collapsing new home sales, and a contracting manufacturing index, contributed to the drop in the Citi Economic Surprise Index. These factors could not be offset by the post-election improvement in consumer confidence.

The Mega Cap basket surged higher after finally finding some stability, despite slightly rising bond yields. Bitcoin remained in a correction phase, heading down towards $90k, while gold managed to edge higher after yesterday’s sell-off, even in the face of a strong dollar.

Currently, we are in a strong seasonal pattern. According to ZH, since 1950, the S&P 500 has risen 80% of the time between the Tuesday before Thanksgiving and the second trading day of the New Year, with an average gain of 2.6%.

Will history repeat itself?

[Chart courtesy of MarketWatch.com]

1. Moving the market

This morning, the Dow and S&P 500 surged into record territory following President Trump’s announcement of his Treasury secretary nominee, Scott Bessent.

Traders reacted positively to the news, cheering the nomination of the hedge fund manager, who recently suggested that any tariffs proposed by Trump should be implemented gradually.

Despite the potential peace deal between Israel and Lebanon, the markets experienced significant volatility.

Crude oil, Bitcoin, and gold all declined, while stocks rallied, led by Small Caps, which benefited from a continued short squeeze. However, the Mega Cap basket slipped again, with one trader humorously describing it as a “source of funds for buying other stuff.”

Lower bond yields provided support for the major indexes, with the 2-year yield plunging significantly. The dollar followed gold lower after its recent relentless rise.

The options market indicated a strong bullish sentiment, with 65% of all options traded being calls, reaching a level of optimism not seen since December 2021.