Weekly Market Performance — November 22, 2024

With additional content provided by Brian Booe, Associate Analyst, Research.

LPL Research provides its Weekly Market Performance for the week of November 18, 2024. U.S. stocks bounced back this week as focus turned to earnings reports, highlighted by NVIDIA’s (NVDA) much-anticipated third quarter results. Plus, investors drew mixed takeaways on the consumer from retail earnings. Overseas, an escalation in the war in Ukraine weighed on European sentiment, although stocks were able to persevere for a weekly gain, while Asian markets ended mixed. Treasury yields ended mixed, while crude oil and the dollar rallied.

Stock Index Performance

S&P 500 Index Sectors

Fixed Income and Commodities

Source: LPL Research, Bloomberg 11/22/24 @2:45 p.m. ET
Disclosures: Indexes are unmanaged and cannot be invested in directly.

U.S. and International Equities

U.S. Equities: Despite some choppy intra-week trading, stocks rebounded to a solid weekly gain as earnings stepped into focus. Major indexes switched between daily losses and gains throughout the week, as all three major indexes gained roughly the same amount of ground with the S&P 500 adding 1.6%, the Dow advancing 1.8%, and the Nasdaq rising 1.7%. Value outperformed growth, and small caps rallied over 4%. 

Earnings took center stage this week with the spotlight on semiconductor and artificial intelligence (AI) theme bellwether, NVIDIA (NVDA), reporting third quarter results after Wednesday’s close. In a highly anticipated earnings report that carried the same level of anticipation as macroeconomic releases, the chipmaking giant delivered an earnings beat, although underwhelming guidance initially weighed on the stock. NVDA slipped following the release before rebounding Thursday afternoon, lifting major indexes in the process, as markets analyzed upbeat takeaways on the AI theme. Also among earnings reports, Walmart (WMT) topped earnings estimates and raised guidance, propelling shares to end the week sharply higher. On the other hand, Target (TGT) came under pressure after failing to meet earnings forecasts and reducing 2025 guidance well below Wall Street’s expectations, sending shares over 17% lower.  

Additionally, markets faced geopolitical overhangs after Ukraine launched its first strike on Russian border territories using Western-supplied missiles on Tuesday, despite Russian President Vladimir Putin’s recently expanded nuclear doctrine. Russian forces responded overnight on Thursday, firing an intercontinental ballistic missile on the city of Dnipro. Overall, the market impact of the escalation in the U.S. was relatively limited.

International Equities: European stocks closed the week higher, climbing above the flatline on Friday as heightened European Central Bank (ECB) rate cut bets buoyed major indexes. For most of the week, the region traded through a defensive tone due to the escalation in the war in Ukraine before being lifted by surging healthcare and real estate names to close the week. Bolstered rate cut bets offset weak economic data on Friday, highlighted by the November flash Purchasing Managers’ Index (PMI) prints. Eurozone composite PMI missed estimates as services contracted for the first time in 10 months, and U.K. PMI indicated a contraction in both the manufacturing and services sectors. The economies of Germany and France also remained in focus, as third quarter gross domestic product (GDP) was revised lower in Germany while composite PMIs in both countries arrived below consensus.  

Asian markets ended the week mixed amid a flurry of headlines. Japan ended modestly lower despite a solid finish to the week, climbing on Friday after the Japanese cabinet announced it is set to approve a $141.9 billion fiscal stimulus package made up of cash stimulus for low-income households and energy subsidies. Also in play was a smaller-than-expected deceleration in core inflation. Throughout the week, trading was up and down in Japan as markets digested a flood of corporate takeover announcements. Greater China erased weekly gains after internet stocks sold off on disappointing earnings from search engine Baidu. Meanwhile, the tech-leaning markets of Taiwan and South Korea closed higher, and India rallied to a weekly gain on Friday, paring Thursday’s rout from a U.S. indictment of Gautam Adani — Chairman of Adani companies — over alleged bribes to Indian government officials.

Fixed Income, Currency, and Commodity Markets

Fixed Income: The Bloomberg U.S. Aggregate Index traded slightly higher as yields ended mixed on the week. The 10-year yield shed a little over three basis points lower (0.03%), and the two-year yield ended six basis points higher (0.06%). Concerns about elevated U.S. Treasury supply and softness in demand from key buyers continue to weigh on the Treasury market. Although yields have risen recently on the back of stronger economic growth and less need for an aggressive rate-cutting campaign from the Federal Reserve (Fed), recent Treasury auctions have been met with only mixed demand. This week’s 20-year Treasury and 10-year Treasury Inflation-Protected Securities (TIPS) auctions were objectively bad with very little demand, which caused primary dealers, who are required to bid on Treasuries, to take down an even larger share of the auction. Moreover, because of elevated supply, the inventory of Treasuries on primary dealer balance sheets remains high and near levels of constraint last seen before the repo flare-up in September 2019 and during the COVID-19 pandemic — both episodes sparked the Fed to intervene. The orderly functioning of the Treasury market is a key responsibility of the Fed, and further primary dealer balance sheet constraints would likely prompt the Fed to hasten the end of its quantitative tightening. But with government budget deficits and Treasury supply expected to remain elevated, the Treasury market will likely remain more volatile than it has been over the most recent decade. 

Commodities and Currencies: The Bloomberg Commodities Index traded over 3% higher this week in a steady rise over the last five days. Crude oil rallied over 6%, finding support from a variety of sources. Escalation between Ukraine and Russia boosted oil prices on export risks from Russia, while strong U.S. demand and measures from China to boost foreign trade also pushed prices higher. Gold advanced all five days this week, continuing to rebound from last week’s losses, largely on so-called “safe haven” buying following this week’s missile strikes between Russia and Ukraine. Silver also advanced on similar dynamics. Copper ended modestly higher while under pressure from a rising dollar, which jumped to two-year highs as the euro weakened on struggling macro data while U.S. PMI came in better than expected. 

Economic Weekly Roundup

Housing Affordability Improved on Higher Incomes. Sales of existing homes in October rose over 3% from last month, but the pace of sales is still significantly below pre-pandemic rates. Housing affordability rose above 100 for the first time since early March. (A value of 100 means a buyer with median income has just enough to qualify for a mortgage on a median-priced home). Consumers have few options amid a low supply of available homes on the market. Investors made up 17% of total purchases, a bit higher than last year. The percentage of all-cash deals dipped to 27% from 30% in September, but is still elevated. 

The residential market has some headwinds from low supply and high borrowing costs, but the rise in consumer wealth has allowed more households to afford the median-priced home. 

Housing Starts Declined for Second Month. October housing starts declined for the second consecutive month as homebuilders waited to find out how the election would turn out. Major storms likely stalled the beginnings of some residential projects, causing a steep decline in construction in the southeast. Both housing starts and building permits declined in October as several homebuilders appeared to hold back the start of projects until after the election. However, more recent surveys showed a rebound in homebuilder confidence. 

Residential construction continues to trend downward, being weighed down by high mortgage rates and a softer job market. However, builders reported a recent uptick in traffic of prospective buyers, bolstering the near-term outlook for housing demand in the next six months. 

The Week Ahead

The following economic data is slated for the week ahead:    

• Monday: Chicago Fed National Activity Index (Oct), Dallas Fed Manufacturing Activity (Nov) 
• Tuesday: Philadelphia Fed Non-Manufacturing Activity (Nov), FHFA House Price Index (Sep), House Price Purchase Index (3Q), 20-City Composite Home Price Index (Sep), U.S. Home Price Index (Sep), New Home Sales (Oct), Conference Board Consumer Confidence Report (Nov), Richmond Fed Manufacturing Index (Nov), Richmond Fed Business Conditions (Nov), Dallas Fed Services Activity (Nov), FOMC Meeting Minutes (Nov 7) 
• Wednesday: MBA Mortgage Applications (Nov 22), GDP Annualized (3Q second) Personal Consumption (3Q second), GDP Price Index (3Q second), Core PCE Price Index (3Q second), Advance Goods Trade Balance (Oct), Wholesale Inventories (Oct preliminary), Retail Inventories (Oct), Durable Goods Orders (Oct preliminary), Capital Goods Shipments (Oct preliminary), Capital Goods Orders (Oct preliminary), Initial Jobless Claims (Nov 21), Continuing Claims (Nov 16), Personal Income (Oct), Personal Spending (Oct), PCE Price Index (Oct), Core PCE Price Index (Oct), Pending Home Sales (Oct) 
• Thursday: Thanksgiving Day Holiday, no economic releases 
• Friday: MNI Chicago PMI (Nov)