The Strength of the Market is: Strong

The stock market climbed to new records on Friday. After Donald Trump's election win, the Dow Jones and S&P 500 had their best week in a year. Last week, the S&P 500 and the Dow Jones each gained about 4.7%, their best week since November 2023. The Nasdaq advanced 5.7% and the smaller company index, the Russell 2000, was up more than 8%. Trump’s domestic growth policies and hopes for easier regulation relative to the Biden administration turned investors eager to invest in the stock market. Generally, investors view a Republican-controlled government as more favorable on expectations for deregulation, the potential for more mergers and acquisitions and proposed tax cuts. Concerns, though, still do exist, including 1.) large federal deficit, 2.) increased tariffs and 3.) potential for an uptick in inflation. In addition to the Trump election victory news, stocks got a boost from the Federal Reserve last week, with interest rates getting lowed by 0.25%. Federal Reserve Chair Jerome Powell noted he is feeling good about the economy during a press conference following the interest rate reduction. In the final months of the year, there could still be room for the stock market to move even higher.

Economic reports from last week came back mixed:

•Vehicle Sales - higher than expectation

•Labor Productivity - lower than expectation

•Consumer Credit - lower than expectation

•Consumer Sentiment - higher than expectation

•Jobless Claims - in-line with expectation

This week, investors will look for guidance from economic reports like Small Business Optimism, Inflation, Retail Sales, Manufacturing and Jobless Claims.