Major stock indexes finished the week higher, recovering some of the previous week’s losses despite some continuing uncertainty around the incoming Trump administration’s policies and escalating geopolitical tensions between Russia and Ukraine. Gains for the week were also relatively broad-based, with small caps outperforming large-caps and an equal-weighted version of the S&P 500 Index outpacing the main index. Shares of Nvidia ended the week little changed as investors appeared to be generally satisfied with the results, although the guidance for Q4 was lighter than some analysts expected. Solid US economic data sparked a rethink of Fed rate-cut expectations, with the curve now pricing in a 50-50 chance of 2 or 3 cuts by the end of 2025. As rate-cut hopes fell, the dollar continued its surge higher and is now at its highest since September 2022. US Treasuries were mixed on the week with the short-end up 7bps while the rest of the curve was lower in yield. That pushed the yield curve (2s10s) back down toward inversion again. Outside the US, both the STOXX Europe 600 Index and the Nikkei 225 ended the week 1% higher. Crude prices ripped higher this week, erasing much of the post-election losses, finding support at its 50-DMA and breaking back above its 100DMA today. Gold rallied back from its post-election plunge up all five days this week. Bitcoin was the big name this week, continuing its charge towards $100k (now up 45% since right before the election results).
Have a great week-end
Charles for the team