Two things that will drive stocks after last week’s Trump-Fed rally | Wilnesh News

Talk about an eventful week.

Normally when the Fed cuts interest rates, it’s a big deal.

Thursday’s Fed meeting, however, pales in comparison to Tuesday’s presidential election, which produced a winner before the sun rose the next morning.

The stock market’s reaction to Republican Donald Trump’s victory over Democrat Kamala Harris was swift and forceful on Wednesday, raising eyebrows. Dow Chemicalthis S&P 500 Index and Nasdaq A record high. The Federal Reserve’s interest rate cut the next day added fuel to the market bulls, with the S&P 500 and Nasdaq rising. The Dow was flat on Thursday. On Friday, the Dow Jones surpassed 44,000 points for the first time and the S&P 500 topped 6,000 points for the first time. They closed slightly below these levels. All three equity benchmarks ended the week at record highs.

The Dow Jones and S&P 500 both rose more than 4.6% this week. They had one of their best weeks of the year and their first positive few in the last three years. The Nasdaq rose 5.7% this week. The tech-heavy index’s weekly gain, while the strongest of the three, was only its best since September. This week, consumer discretionary, energy, industrials, financials and information technology are the top five sectors.

• Last week, we sold shares of industrial laggards Honeywell Triple the power and lower the status to a level that Jim Cramer said won’t hurt us. Wednesday, already running Wells Fargo and Morgan Stanley After Trump’s victory, when both percentages surged by double digits, our discipline dictated that we take profits, which we did. BlackRock, one of our new positions, stayed away from Wednesday’s gains in financial stocks, taking some of the bank stock gains and buying more shares of the world’s largest asset managers.

We said last weekend that the risk to the market is not who wins, but who wins decisively. That’s exactly what we got.

Wall Street, however, has traditionally favored prolonged gridlock in Washington, a situation caused by a divided Congress or a White House controlled by one party and Capitol Hill controlled by another. The exact combination is still up in the air. While the presidential race was quickly decided and Republicans flipped the Senate, the House race remained too close to call. According to NBC News. As of Sunday afternoon, Republicans needed to win six of them to gain a majority.

Only time will tell how the balance of power will play out and whether that will be good or bad for stocks. But one thing we do know is that Trump likes to grade himself on market performance. During Trump’s first term, from Inauguration Day 2017 to his last day in office, the S&P 500 rose 67%. Barring anything catastrophic, President Biden and Vice President Harris will hand the baton of a healthy economy, tame inflation, and a strong stock market to Trump.

In the coming week, Wall Street and the Federal Reserve will pay close attention to two government inflation reports. The financial reporting season begins to end, with only two club names left. home depot and disneyreporting quarterly results.

This week’s key economic report, the October Consumer Price Index, will be released before the market opens on Wednesday. Economists expect headline CPI to rise 2.6% annually, slightly higher than in September, according to estimates compiled by FactSet. The core interest rate, which excludes volatile food and energy prices, is expected to increase by 3.3% on year, unchanged from last month. The housing component of the CPI, which accounts for about one-third of the entire index, will also be a focus given the stickiness of housing inflation costs.

• While Thursday’s producer price index for October isn’t as closely watched as the consumer price index (CPI), it could move markets. Monthly PPI readings remain important because they show the wholesale prices businesses are paying, often called input costs, and whether they need to raise consumer prices to protect profits. According to FactSet, economists expect overall PPI to increase by 2.3% annually and core interest rates to increase by 2.9% annually.

• In other data this week, October retail sales and October industrial production are both released on Friday. Retail sales give us a sense of where consumers are at and where they are focusing their purchasing power heading into the holiday shopping season. About two-thirds of the nation’s economy is driven by consumer spending. The monthly Industrial Production and Capacity Utilization report provides insight into the manufacturing and mining, electric and natural gas utility sectors, which have long been under pressure.

(look here View the complete list of Jim Cramer Charitable Trust stocks.

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