Second Best Month This Year

November 29, 2024

November has historically been the beginning of a 3-month period that accounts for 50% of all stock market gains for the year.  Investors tend to be in a good mood during the holidays and January sees the biggest inflow of funds into retirement accounts of any month during the year.  There were two differences this year, the Presidential election uncertainty and the normally weak months of September & October were both positive.  When the election results were confirmed, the market responded with an explosive rally that produced the best day in 2 years and sent all major indices to new all-time highs.  The market signaled a pro-business President who can secure the border is just what the country needs.  The optimism about Trump 2.0 continued through the end of the month with the S&P adding another 5.7% and now up 26.5% for the year.  The small cap Russell 2000 needs a strong economy, and that index led the way with a gain for the month of over 11%.  Oil lost 1% and gold had a volatile month that featured a new all-time high before ending with a loss of 3%. Interest rates edged lower.

The month began on a Friday with news that only 12,000 new jobs were created in September, the slowest pace of job growth since the pandemic.  Investors blamed the Boeing strike and Hurricane Milton, so the market had little reaction.  The first full week was all about the Presidential election and when we learned Trump had been elected and Republicans would control both the House and the Senate the market exploded higher.  The Federal Reserve Open Market Committee lowered interest rates by 25 basis points, as expected, but the Red Wave would push the market higher through the end of the month.  The S&P gained 4.6% for the week, its best weekly performance in over a year.  The second week began with Veterans Day and featured profit taking as the second reaction to a Trump win was higher interest rates.  The S&P ended the week giving back 2.1%.  The focus of the 3^rd week was the quarterly earnings report from the world’s most valuable company, Nvidia.  Artificial Intelligence (AI) has been driving this market and Nvidia drives AI.  There was caution ahead of the report, but when the report showed the company had beaten analysts’ expectations on all metrics it was rally back on and the S&P ended the week rising another 1.7%.  The final week included Thanksgiving and a half day of trading on Friday.  The week tends to feature low volume with an upward bias and that was the case this year as the widely followed index closed out a strong month with a gain for the week of 1.1%, right at the all-time high.

Many of us remember the technology stock meltdown in December of 2018 that saw the S&P drop more than 13%, but December has traditionally been one of the better months of the year for stock performance.  Over the last 100 years the average gain for the month has been 1.3% and the month has closed higher an amazing 73% of the time, almost 10% more often than the second-best month, which is April.  We are currently enjoying a Goldilocks economy where everything is just right.  The economy continues to grow, the Federal is lowering interest rates and inflation has quieted.  With that said, the Trump excitement has the market very richly priced, and we would not be surprised to see a 5% or more retreat before more gains.  We are in a seasonally strong time of the year, but as we learned in 2018, no period is immune from volatility.  We have a small hedge position and larger than normal cash.  On a tradeable decline we would close the hedge and put some of the cash to work.

If you know someone who would be interested in learning more about Greenberg Financial Group, please contact us at 520-544-4909, or visit our website at www.greenbergfinancial.com. As always, the key to successful investing is to have a portfolio that is consistent with your investment objectives and risk tolerance. We invite you to listen to our weekly Money Matters radio show which airs every Sunday Morning from 8:00 AM to 10:00 AM on KNST AM 790.  You can also listen to us on iHeart radio, follow us on Twitter @gbergfinancial or on Facebook under Greenberg Financial Group.  Previous radio shows are available by going to www.iheart.com or using the iHeart app and typing Money Matters with Dean Greenberg.