Stocks Rally In Best Week Of The Year Last Week, Big Three Indexes Soar To New All-Time Highs Stocks closed modestly higher on Friday and sharply higher for the week. In fact, it was the best week for stocks all year. And it was led by the small-cap Russell 2000 with a weekly gain of 8.57%. Moreover, the big three indexes (Dow, S&P 500 and Nasdaq) made new all-time highs in the process. Same for the mid-cap S&P 400. The Russell 2000 had to settle for putting in a new 3-year high. But it won't take much (less than 2.5%) for them to finally eclipse their old highs from November 2021, and put in a new high of their own. Stocks soared after the election on relief that it's finally over, and hopes for strong growth with the incoming administration. Last week's widely expected 25 basis point rate cut is also supportive for stocks. Especially after Fed Chair Jerome Powell's press conference where he said he was "feeling good" about the economy and that they've made "significant progress on inflation." But he acknowledged that, "even with today's cut, policy is still restrictive," which leaves the door open to another cut in December. Friday's better-than-expected Consumer Sentiment report didn't hurt either. It came in at 73.0 vs. last month's 70.5 and views for 70.8. The year-ahead inflation expectations (which is also part of that report), came in at 2.6%, down a bit from last month's 2.7% pace. In other news, China announced a 5-year, 10 trillion yuan ($1.4 trillion) package to deal with the country's local government debt. It's a much needed program. But investors were disappointed that China did not announce more stimulus measures in Friday's announcement. However, they are expected to announce such measures next year after getting a better understanding of the new administration's trade policies moving forward, including U.S. imposed tariffs on certain Chinese goods. The Hang Seng Index was off -1.07% on Friday, but is up 21.6% YTD, with most of that coming in the last 3 months when China began cutting lending rates and announced upcoming fiscal stimulus measures. Earnings season continues this week with another 1,533 companies on deck to report, even though more than 80% of the S&P 500 companies have already reported. We'll also get another look at inflation with Wednesday's (11/13) Consumer Price Index (CPI – retail inflation), and Thursday's Producer Price Index (PPI – wholesale inflation) reports. As we head into the end of the year, there's plenty to be bullish about. As we wind down the rest of 2024, it's important to remember that Presidential election years are excellent for stocks. There's usually a post-election rally. Q4 is also the best quarter for stocks. Interest rates are on their way down, which is bullish for stocks. And the trend of earnings estimates for the S&P are on an upward trend of improvement with Q3'24, so far, up 6.7%, Q4'24 expected to be up 8.1%, Q1'25 expected to be up 11.3%, and Q2'25 expected to be up 12.6%. There is so much going right for stocks right now, so make sure you're taking full advantage of it. See you tomorrow,  Kevin Matras
Executive Vice President, Zacks Investment Research | 
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