Most of US equities indices rose to record highs, as investors wagered that a “red sweep” (Republicans winning Presidency, Senate and Congress) would result in faster earnings growth, looser regulations, and lower corporate taxes. The small-cap Russell 2000 Index surged 8.57% for the week but was the sole benchmark to remain out of record territory. Meanwhile, the Dow Jones hit 44.000 for the first time while the S&P 500 closed just shy of 6,000, up 4.7% for the week, its best weekly gain in almost a year. On Thursday, the Fed announced a 25bps rate cut, its first easing move since cutting rates by 50 basis points in mid-September. In terms of economic data, the October ISM services sector activity came in at 56.0, well above expectations and the best reading since August 2022. U.S. Treasuries generated positive returns heading into Friday, as yields largely ended lower than where they ended the previous week. In Europe, the STOXX Europe 600 Index ended the week 0.84% lower. Worries about the impact of Donald Trump’s trade policies on European economic growth and central bank policy weighed on sentiment. Japan’s stock markets rose over the week, with the Nikkei 225 Index gaining 3.8%. The Shanghai Composite Index gained 5.5% as Beijing’s unveiling of fresh stimulus measures offset concerns about potential U.S. tariff hikes. The dollar rose for its sixth straight week to its highest weekly close in 5 months. Bitcoin topped $77,000 for the 1st time ever.
Have a great week-end
Charles for the team