Key Highlights
- The S&P 500® was up 5.73% in November, bringing its YTD return to 26.47%.
- The Dow Jones Industrial Average® gained 7.54% for the month and was up 19.16% YTD.
- The S&P MidCap 400® increased 8.66% for the month, bringing its YTD return to 21.02%.
- The S&P SmallCap 600® returned 10.77% in November and was up 16.26% YTD.
Market Snapshot
The predictive polls were again wrong for the U.S. presidential election, as the race was called for Trump in the early morning the day after the election (Nov. 6), and the expected too-close-to-call results became a clear Trump victory. The final count (still) continues, with Trump receiving 312 electoral votes (270 needed) compared to 226 for Harris, as the popular vote result was 49.9% (76.9 million votes) for Trump versus 48.3% (74.4 million) for Harris. The upper chamber (Senate) turned Republican, with a 53-47 majority over the Democrats (currently Democrats are in control at 51-49). The lower chamber (House of Representatives) remained in Republican control, as the known makeup for the coming Congressional term was 220 Republican and 214 Democrats (218 needed to win a majority) with 1 seat still open; there are currently 220 Republicans, 212 Democrats and 3 vacancies.
The initial market reaction to the election results was to post a broad (but not universal) relief rally, as the prospect of a prolonged battle over the election was avoided. Specifically, on the day after the election, the S&P 500 closed above 5,900 for the first time, at its 48th new closing high of the year, as Financials led the way up, gaining 6.2% on hopes of fewer regulations and more small- and mid-sized financial mergers, and more M&A in general. On the other side of the trades were the issues seen as being hurt by the expected change in government regulations and expenditures, including significant declines in solar issues, along with issues dependent on Chinese imports such as the dollar stores, as well as some housing and real estate issues. The initial voting breakdown (by age, gender, heritage and location) showed meaningful change in what was historically seen as traditional Republican and Democratic support, which will lead to changes in party priorities (and pollsters will need to review their assumptions and methodologies, again).
The S&P 500 went on to post three more closing highs in as many trading days on Nov. 7, 8 and 11, as it broke and closed above 6,000. It then posted two more new closing highs for the month, closing on the sixth one on the last day of trading for November (reaching 6,044.17 and a closing high of 6,032.38). The Dow Jones Industrial Average (not to be left behind) posted seven new closing highs in November, also closing the month at a closing high, and trading above 44,000 and 45,000 for the first time (reaching 45,071.29 intraday, with a closing high of 44,910.65, shy of the 45,000 mark). The market then moved past its relief rally to asset and issue reallocation, as it digested the impact of potential future government policies, regulations and spending. For the month, the index posted a broad 5.73% gain, as all 11 sectors gained, with 385 issues up (and 147 up at least 10%) and 118 down (with 12 down at least 10%), compared with last month’s 199 up and 304 down. Consumer Discretionary did the best, up 13.24% and Health Care did the worst, up 0.13%.
As for the all-important U.S. Fed watch, which lost its headline status to politics (but may return), the Street still sees a 0.25% cut at the Dec. 17-18, 2024, meeting (66% probability), as January is seen as a wait-and-see month (no change), with the March 18-19, 2025, meeting expected to bring another 0.25% cut (but there are lots of reports and politics between now and then).
The S&P 500 closed at 6,032.38, up 5.73% (5.87% with dividends) from last month’s close of 5,705.45, when the index was down 0.99% (-0.91%) from the prior month’s close of 5,762.48 (2.02%, 2.14%). The three-month gain was 6.80% (7.15%), bringing the 2024 YTD return to 26.47% (28.07%). The one-year period was up 32.06% (33.89%), the 2023 return was up 24.23% (26.29%) and the 2022 return was -19.44% (-18.11%).
