1. Moving the Markets

Thanks to the Trump post-election rally, the month of November ended up being a positive one, an amazing feat when considering that on election night the futures were way down with the Dow at point being in the negative by almost 900 points.

Today, all the glory went to the energy complex (+4.8%) propelled by oil prices which rocketed higher by over 8% and within striking distance of the $50/bbl milestone. The cause of this rally was an alleged OPEC agreement curtailing production. Sure, we’ve seen this movie many times before, so it remains to be seen if this is a deal that is truly nailed down. I have my doubts.

While November was quite a month for the indexes, it’s interesting to note, that widely diversified portfolios with international exposure were left in the dust as the Trump rally was concentrated primarily in domestic equities. ZH posted this spot-on chart:

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1. Moving the Markets

News-wise, it was a mixed bag as health insurers offered an upbeat outlook while a sharp drop in oil prices (-3.87%) pulled down energy shares. The major indexes got off to a good start, faded in the end but managed to close above the unchanged line by a small margin.

The steam of the Trump rally appears to have slowed down some, which makes sense, as none of what ails this country has been resolved. The focus has simply been shifted to the possible economic expectations associated with a Trump presidency, and it remains to be seen if those good intentions can actually be turned into reality.

Hope vs. reality, the theme of the stock market over the past year, during which hope has been the clear winner, but what about next year? How do 2017 GDP growth expectations line up with the current level of the major indexes? ZH presented the following chart:

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1. Moving the Markets

The smooth three week post-election ride of the major indexes hit a speed bump today with equities notching their worst performance in almost a month. However, that’s sounds worse than it actually was as the S&P 500 and the Nasdaq gave back only around 0.5%, which is hardly earth shaking.

The main culprits for the pullback were the consumer discretionary and financial sectors, which have been among the best performers since the election; gold bucked the trend and gained the most in a month (+1.30%). The US dollar, which had been on a tear ever since bond yields spiked, had its biggest drop in a month.

Oil rallied and ended higher but not before giving back half of its gains after the OPEC session ended as usual in no certifiable agreement. This stock market rally may not be all it’s cracked up to be as volume was notably absent as ZH reports. The chart below clearly shows that equity trading volume collapsed while bond trading volume exploded to five year highs:

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ETF Tracker StatSheet

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Market Commentary

Major Indexes Inch Higher During Holiday Shortened Week

1. Moving the Markets

There was no letting up this week as the major indexes kept the rally going with the only fly in the ointment being extremely low volume as many traders took off for the Thanksgiving holiday. The S&P 500 managed to gain +1.4% during the past four trading days.

Investors were keeping an eye on retailers during this Black Friday, but initial reviews saw store traffic as being subdued across the nation, most likely due to early discounted selling over the past few weeks. Another argument could be that consumers are suffering from sticker shock caused by soaring Obama-care premiums reducing disposable cash for the holidays. Dollar sales in the second week of November were 8 percent lower than in the same period last year.

Ten of the eleven major S&P sectors closed higher with the leader being utilities, which sported a gain of +1.43%. The energy sector closed down propelled by a loss of -4.17% in oil prices, which “enjoyed” their headline driven roller coaster ride. Bond prices slipped as yields rose, a phenomenon that, depending on its continued magnitude, will affect the stock market negatively at some point in the future.

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