Key Points
- The S&P 500 Index rose 0.48% and gained 5% in November, buoyed by investor optimism and heavy equity inflows.
- The 10-year Treasury yield fell to 4.20%, reflecting easing concerns over extreme trade policies.
- Canada saw modest economic gains, while European stocks remained stable. Miners benefited from optimism about China’s stimulus measures.
- Inflation rose to 2.3%, exceeding the ECB’s target but unlikely to derail planned rate reductions.
U.S. stocks climbed on Friday during a shortened post-Thanksgiving trading session, while Treasury yields fell, and the dollar experienced its largest weekly decline in three months. Market optimism stemmed from speculation that President-elect Donald Trump may take a more measured approach to trade policies, easing concerns over extreme tariffs.
The S&P 500 Index rose 0.48% or 28.68 to 6,027.42, continuing its November rally, which has seen the index gain 5%—on track for its best monthly performance since February. Treasury yields also retreated, with the 10-year note yielding 4.20%.
Trump’s Treasury secretary pick appears to have reassured investors, sparking confidence that tariff implementations will be moderate. This optimism has encouraged heavy inflows into U.S. equities, with investors pouring a record $141 billion over four weeks, according to EPFR Global. Key technology stocks have propelled the year-to-date gains of 26% in U.S. markets, buoyed by expectations of Federal Reserve rate cuts amid ongoing economic growth.
Globally, Canada’s economy posted a modest gain last month despite a weaker-than-expected third quarter, supporting the central bank’s stance on maintaining rate cuts. European stocks remained largely unchanged, though mining companies such as Anglo American Plc saw gains fueled by hopes of further economic stimulus from China.
The euro fluctuated slightly after inflation in the eurozone rose to 2.3% in November, slightly above the European Central Bank’s target of 2%. However, analysts believe the increase is unlikely to alter the central bank’s trajectory of rate reductions. In Japan, the yen briefly strengthened past 150 per dollar as Tokyo’s inflation data exceeded expectations.
Despite bullish sentiment in U.S. markets, Bank of America Corp. strategists highlighted a sharp contrast between investor enthusiasm for American assets and pessimism toward the rest of the world. They suggested that improving European fiscal spending conditions and a potential ceasefire in Ukraine could improve global market sentiment.
