U.S. stocks could get off to a positive start on Monday after the averages registered their best week this year following the reelection of Donald Trump.
After witnessing heightened volatility in the run-up to the high-voltage 2024 presidential elections, and the Federal Open Market Committee's (FOMC) rate decision, Fed chair Jerome Powell remained cautious in his approach, but delivered the 25 basis point cut that was widely expected by experts and investors.
| Futures | Performance (+/-) |
| Nasdaq 100 | 0.34% |
| S&P 500 | 0.29% |
| Dow Jones | 0.28% |
| R2K | 1.32% |
In premarket trading on Monday, the SPDR S&P 500 ETF Trust SPY was up 0.28% to $599.84 and the Invesco QQQ ETF QQQ fell 0.28% to $515.57, according to Benzinga Pro data.
Cues From Last Week:
Dow Jones and S&P 500 registered their best week of the year after the election of Trump as the 47th U.S. president.
The S&P 500 surged 4.66% last week, while the Dow gained 4.61% during that period, with both indices recording their best week since Nov. 2023. The Nasdaq, meanwhile, jumped 5.74% during the week.
Most sectors on the S&P 500 closed on a positive note, with consumer staples, utilities, and real estate stocks recording the biggest gains on Friday.
However, materials and communication services stocks bucked the overall market trend, closing the session lower.
| Index | Week’s Performance (+/-) | Value |
| Nasdaq Composite | 5.74% | 19,286.78 |
| S&P 500 | 4.66% | 5,995.54 |
| Dow Jones | 4.61% | 43,988.99 |
| Russell 2000 | 8.47% | 2,399.64 |
Insights From Analysts:
Ari Wald, head of technical analysis at Oppenheimer & Co., noted that the current rally in U.S. equity markets is based on multiple factors and not just the post-election rush due to Trump's victory.
“There's market strength and there's meaningful market strength. We see last week's post-election breakout as meaningful market strength based on wide-ranging bullish action."
Moving past the election, investors will be looking forward to crucial economic data such as the October Consumer Price Index, or CPI. Economists expect a moderate uptick in CPI inflation to 2.6% in October, as compared to 2.4% in September.
The core inflation is expected to remain unchanged at 3.3%.
"The October CPI report will likely support the notion that the last mile of inflation’s journey back to target will be the hardest,” said economists at Wells Fargo, led by Jay Bryson.
Investors will also keep an eye out for crucial retail sales data ahead of the beginning of the holiday season.
Nathan Peterson, Director of Derivatives Analysis at the Schwab Center for Financial Research, laid out the thesis for market movements for the next week.
"If history is any guide, it shouldn’t be a surprise if we get some “back and fill” price action (consolidation of gains) from this week’s surge in stocks, but the timing is difficult if not impossible to predict," Peterson said.
"Today’s price action suggests to me that the post-election upside momentum is still in play, which bodes well for stocks, at least for the first half of next week."
Overall, Peterson maintains a cautious stance, saying markets could witness bullish momentum to kick off the week, but bearish sentiments could take over during the second half.
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Upcoming Economic Data
Monday's economic calendar is light, but crucial economic data is scheduled for the rest of the week.
- On Tuesday, Fed Gov. Christopher Waller will speak at 10 a.m. ET.
- Richmond Fed President Tom Barkin will speak at 10:15 a.m. ET.
- Philadelphia President Patrick Harker will speak at 10 a.m. ET.
- On Wednesday, the Consumer Price Index (CPI) will be released at 8:30 a.m. ET.
- New York Fed President John Williams will speak at 9:30 a.m. ET.
- Dallas Fed President Lorie Logan will speak at 9:45 a.m. ET.
- The monthly U.S. federal budget will be released at 2 p.m. ET.
- On Thursday, Federal Reserve Gov. Adriana Kugler will speak at 7 a.m. ET.
- Initial jobless claims data will be released at 8:30 a.m. ET.
- Federal Reserve Chair Jerome Powell will speak at 3 p.m. ET.
- On Friday, the Import price index will be released at 8:30 a.m. ET.
- Retail sales data will be released at 8:30 a.m. ET
Stocks In Focus:
- Taiwan Semiconductor Manufacturing Co. TSM will be in focus on Monday after it was reportedly ordered to halt shipments of advanced chips to China.
- Investors are awaiting earnings results from Aramark ARMK, Live Nation Entertainment, Inc. NYSE: LYV), and monday.com Ltd. MNDY today.
- Trump Media & Technology Group Corp. DJT shares gain over 5% in premarket trading on Monday.
- Tesla Inc. TSLA shares surged over 7%.
Commodities, Bonds And Global Equity Markets:
Crude oil futures experienced sideways movement in the early New York session, falling by 1.28%.
The 10-year Treasury note yield eased marginally to 4.306%.
Major Asian markets ended mixed on Monday.
Bitcoin BTC/USD hit the $81000 mark first time in history as cryptocurrencies rally after Trump’s win last week.
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Photo courtesy: Wikimedia
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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