The biggest news of the week was clearly and obviously the election of our next 47th President, President Donald Trump. The market reaction was instant as expected, though it burnt out relatively quickly. Gold and other precious metals immediately dropped, wiping out gains that took upwards of a month to build. Though the losses were short lived as steady increases over the following days put gold back above $2,700. SIlver responded similarly but did not reverse as strongly, increasing an already relatively large g/s ratio to above 85. Bitcoin hit a new all time high and flirted with $77k intraday, despite what some technical analysis would’ve predicted if not for election influences. Simultaneously bullish activity was observed across major stock market indicators with the S&P moving nearly 3% (~+/1% in any given day on average) and the Dow Jones Industrial Average trading above $44k for the first time, though it did maintain through close.
The election paired with market performance resulted in higher than expected consumer sentiment numbers for the month of November, hitting a 7 month high. That is contrary to the major economic indicators that were reported on for the week. Both the trade deficit and jobless claims came in higher than median forecasts. Additionally the Federal Reserve held their Federal Open Market Committee hearing where they discussed the economy, talked through their decision to further lower interest rates, and fielded questions at the end. Their decision to further lower interest rates further pulls the bond market into uncertainty. The bond yield curve resembles a bowl opposed to the normal upward sloping and to the right. Currently bond yields decrease with time until you surpass five years indicating short term fiscal uncertainty and potentially continued Fed fund rate cut expectations with investors.
Overall there is nothing truly major that has actually changed other than the perceptions and expectations that accompany a Donald Trump victory. There have been continued stock market rallies with multiple new all time highs during the current Biden administrations time. The vast majority of major economic indicators are still pointing to problems that have not and will continue to not be solved. Debt levels across the board (personal, corporate, and government) are at all time highs and continuing to increase. Inflation will continue to push prices up and Fed expectations to continue to cut rates will only exacerbate the problem. Increasing consumer sentiment is going to be the driving factor until it can’t make up for the bad numbers anymore.
Notable mentions from the week
Joe Rogan Podcast with Elon Musk, Tuesday 11/5
2 Peter Schiff podcasts, Wednesday 11/6 and Friday 11/8
FOMC Meeting w/ Fed Funds Rate Cut Decision
The Weeks Economic Reports
Factory Orders
U.S. Trade Deficit
Jobless Claims
Wholesale Inventories
Interest Rate Decision and Meeting
Consumer Credit
Consumer Sentiment
Upcoming Economic Reports
Optimism Index
Consumer Price Index (CPI)
Year Over CPI
Core CPI
Year Over Core CPI
Fed Budget - Monthly
Jobless Claims
Producer Price Index (PPI)
Year Over PPI
Core PPI
Year Over Core PPI
Import Price Index
U.S. Retail Sales
Industrial Production
Capacity Utilization
Business Inventories
How are tariffs going to affect the economy?