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Week in Review: 11-15 November 2024

 

Financial Markets

For the week, the main stock market indices were DOWN, with the S&P500 losing 2.1% and the NASDAQ 100 3.4% in the red. The small cap index (Russel 2000) plummeted by 3.9%.

Precious metals continued correcting. Gold and silver fell 4.5% and 3.4%, respectively. Silver is reaching the 30$ level, which should be short term support.

WTI is around 67$ and is looking bearish. Oil will likely trade sideways in the near future (67-72$). But if it continues falling it can easily go to 64$/bbl.

Bitcoin continued its hysteria and ran up by 12.6% this week. We are in uncharted territories, but a pull-back and consolidation would be healthy.

The relative strength of the US dollar (DXY) was up by 1.6% and is reaching resistance (107). The EUR/USD is around 1.05$, the GBP/USD is at 1.26$, and the USD/JPY is at 154.30 JPY.

US M2 money supply at the date of 30th September 2024 was up by 0.38%.

The national financial conditions index (NFCI) for the week of 4th November 2024 loosened by 1.94% and doesn't translate signs of financial stress in the markets.

US bond yields went up again this week, and now sit at 4.307% for the 2-year and 4.441% for the 10-year.

Despite the stock markets falling, the VIX remained stable and at around 16. This means that put option sellers need to continue waiting for the next wave of volatility, which may come soon.


Comment Section

The markets corrected from the euphoria of the electoral week. Another fall of 1-4% in the main indices would be perfectly normal for the next couple of weeks. Precious metals are taking a break from the rally of the last months. Maybe the election result is contributing to a bit more certainty and less demand for gold.
 
We predict some more months of complacency and perhaps a lateral market, while the economic picture doesn't get perfectly clear regarding a possible recession. We don't see a lot of growth coming, so fundamentally valuations should not go up.

Take care, and good luck.


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