WEEKLY SUMMARY: S&P above 5,000 for the 1st time; Bitcoin on fire
Most of the major US #equity indexes moved higher over the week, with the S&P 500 Index reaching new highs and breaching the 5,000 threshold for the first time. The advance remained relatively narrow, however, with an equally weighted version of the index significantly trailing the standard market-weighted version for the fourth time in five weeks. #Nvidia soared and is now worth as much as the entire Chinese stock market (represented by the H shares of the Hong Kong stock market). Market sentiment was helped by the solid reception given to the U.S. Treasury Department’s record $42 billion auction of 10-year notes. Shares in New York Community Bank plunged after the lender reported weak results in the wake of its acquisition of failed Signature Bank during early 2023’s regional banking turmoil. On the #macro side, S&P Global’s services sector activity jumped unexpectedly to a four-month high while the Institute for Supply Management’s rival gauge also indicated solid growth. Outside the US, the STOXX Europe 600 Index ended 0.19% higher on some strong company earnings updates. In Japan, the Nikkei 225 Index rose 2.0%, reaching a 34-year high on yen weakness. #Stocks in #China rallied in a holiday-shortened week as the government’s latest raft of stimulus measures offset concerns about deepening deflation. The Shanghai Composite Index gained 4.97% for the week ended Thursday. Bitcoin soared +12% and is back above $48,000, its highest 'close' since December 2021.
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US equities gave back a portion of the previous week’s gains, as uncertainty over the incoming administration’s policies appeared to continue driving the so-called Trump Trade. Financials and energy shares continue to benefit from hopes for deregulation and merger approvals. Likewise, the price of Bitcoin had surged by nearly a third since the eve of the election, as investors anticipated looser regulation of digital currencies. Conversely, health care shares fell sharply following news that Robert F. Kennedy, Jr., would be Trump’s nominee to head the Health and Human Services Department (HHS). On the macro side, yoy US headline inflation rose for the 1st time since March, from 2.4% to 2.6%. PPI data came in above expectations.