We’re back! The stock market surged yesterday, shifting the emotion needle from Neutral back into ‘Greed.’

Green is everywhere on the screen, and small-cap factors are erupting.

Banner Day

Many records fell yesterday, including the best post-election day session in the books.

The S&P 500 (SPX) bounced off its 50-day moving average and surged to a new record close.

Sector Performance

It is a good day for the market whenever those large boxes are green. Investors decided it was better to dump defensive positions and dash into momentum names.

The Same Tide

Overall, more than eighty-eight names in the S&P 500 finished higher. Every name in Communication Services (XLC) finished in the black.  Even declining sectors saw most components higher.

Heat Map & Market Breadth

Higher bond yields and mortgage rates hit Real Estate (XLRE) names, and suddenly, the demand for miracle weight loss drugs slowed.

Market breadth was highly bullish, especially from new highs to new lows on the New York Stock Exchange (NYSE) and the NASDAQ Composite. Also, the volume is robust again.

Market Breadth	NYSE	NASDAQ
Advancers	1,732	2,812
Decliners	1,083	1,532
New Highs	470	658
New Lows	52	153
Up Volume	4.18 billion	5.25 billion
Down Volume	2.14 billion	2.88 billion

There are many signs that the transition to the end of the year could be smooth sailing with even less volatility.

Today’s Session

Third quarter productivity grew 2.2%, below consensus of 2.5%, which was also the second quarter final read.  Unit labor cost grew 1.9%, much higher than consensus of 1.0% but it’s trending lower.

Unit labor cost was north of 8.0% in the first quarter of 2022.

Also note, the Atlanta Wage Tracker now sees a minimum advantage for job switchers over job stayers.  The Fed must grapple with these trends, but also the string of economic surprises.

Remember, a positive economic surprise is not the same as strong, or even solid, economic developments.

Comments

Start lowering our national debt which is going to require significant reductions in the size of our government Ken Terry on 11/7/2024 10:01:12 AM

We desperately need an honest media that informs and educates instead of indoctrinates. The same can be said for our education system. Ric Walter on 11/7/2024 10:45:09 AM

Return "One nation under God" as the underpinning of our democratic republic. Ron Switzer on 11/7/2024 10:53:49 AM

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