Investing Update: Signs Of A Market Top?
What I'm buying, selling & watching
This week started off with the S&P 500 setting the 51st all-time high of the year. The 51 all-time highs in a calendar year, are the 7th most in history. With just over 6 weeks to go, we will see how many more records can be set.
Monday marked the peak of the week as the S&P 500 inched lower each day. Tuesday was the first down day for the stocks market since the election. The S&P 500 finished the week down 2.1%. The Nasdaq was off 3.1%. The Dow down 1.2%
Market Recap
Weekly Heat Map Of Stocks
Inflation Remains Under Control
CPI inflation data for October came in line with estimates.
Shelter continues to be a sticking point. Until that component starts to fall, I don’t see the Fed reaching their 2% target.
Auto insurance has led the inflation gains for a while. It’s starting to slowy creep down. I think everyone will cheer to see gasoline being down the most.
The inflation expectations have now hit the lowest level in 4 years. The lowest since December 2020. You can see that it has gone down just as fast as it went up. Right now the worries of inflation are over. We will see if it stays that way.
Another positive is that for 18 months now, the wage gains of 4% have outpaced the 2.6% gain in inflation.
A Post Election Surge Shouldn’t Be A Surprise
It seems that many are surprised by the surge that the stock market has had since the election. I think some forgot that post election rallies are the norm.
Remember what happened after the 2016 election? After Donald Trump won, the stock market surged.
Remember the 2020 election? After Joe Biden won, the market surged.
In 2024 it has happened again. The stock market has surged following the election.
We constantly hear how the stock market likes gridlock in Washington. Actually gridlock and a divided government isn’t exactly preferred.
I loved this from Jeff deGraaf over at RenMac, which shows that historically a unified government has been preferred over a divided government.
A unified government is where one party controls the House, Senate and White House. We now have a unified government with Republicans having control of all three.
I have to wonder if this is preferred because a unified government actually gets more done than a gridlocked goverment?