Exceptionally high market volumes on Friday as all US Indexes rose following the release of November's PCE data

The US Indexes all bounced on Friday following the the release of cooler than expected PCE (The Fed's preferred measure) inflation data for November. The VIX was down 6 at 18. The main indexes on Friday were; DJIA +1.18%, S&P 500 +1.09% and Nasdaq +1.03% (Mag7 +0.28%). On an equal weighted basis (our measure) the overall market was +1.26%. Breadth of 66% (daily range since the election is 9% to 71%). Daily volumes of 18b (the range since the election is 8b to 18b). 

Daily returns on - equal weight basis: Market +1.26%, Mag7 +0.28% (NVDA +3.1%, AAPL +1.9% GOOGL +1.5%, AMZN +0.7%, MSFT -0.1%, META -1.7% TSLA -3.5%), large cap +1.1%, medium cap +1.1%, small cap +1% and micro cap +1.5%. 

Weekly returns - equal weight basis: Market -2.8%, Mag7 -1.3% (AAPL +2.6%, GOOGL +0.8%, NVDA +0.3%, AMNZ -1.1%, MSFT -2.4%, TSLA -3.5%, META -5.6% ), large cap -3.3%, medium cap -3.9%, small cap -3.8% and micro cap -1.7%.

Our risk monitor remains in favour of the larger cap stock but only just.

All Sector and all market cap bands were strongly up on Friday on the back of very high volume: Healthcare was the best performer +1.49% and surprisingly has actually beaten the market over the last week albeit it is still heavily down since the Election. Technology was +1.46%, pushed higher by strength in Technology Hardware +2.1% (Semiconductors +2.5%, Cooms & Networking +2.5%, Electronic Equipment & Parts +2.1%) FinTech also beat the market with Blockchain +1.7%. Basic Materials +1.3% performed well after a weak last four weeks. Lithium stocks +3.9%, Gold +1.8% (Gold has underperformed over the lat 6 months). Financials marginally outperformed the market with Banking & Investments +1.7%, leading the way albeit these stocks have underperformed the market by 0.5%% over the last 4 weeks. Energy +1.2% slightly underperformed the market with Fossil Fuels weak at +0.5%, Uranium was -1.2% and Renewable Energy & Equipment +9.1% - this sub sector has beaten the market by 10% over the last 4 weeks. Department Stores +3% (10% ahead of the market over the last 4 weeks) led Consumer Cyclicals higher albeit weak Auto +0.5% and Media & Publishing +0.4% held the overall sector performance back. Industrials +0.9% underperformed although Drones & Space continued to be very strong but Transport flat lined.

A notable number of 52 week highs was seen in the following sectors: Consumer Cyclicals (Hotels and Media & Publishing), Financials, (Banking & Investment), Technology (Software & IT Services, Technology Equipment).

Very high volumes were seen in all sector: High levels in Basic Materials (Metals & Mining) Consumer Cyclicals (across the sector), Financials (across the sector), Healthcare (across the sector), Industrials (across the sector) and Technology saw a very high number (Software & IT Services, Technology Equipment)

The markets bounced strongly on Friday following the release of the PCE figures for November showing 2.4% annualised and +0.1% over October's reading - both numbers were lower than expected. PCE is allegedly the Fed's preferred inflation measure and the news was enough to give the markets a bit of hope regarding the outlook for interest rates as we move into 2025. With the Election result and distortions now baked into the market the immediate focus is moving to the Economic news with at least one eye on bond yields as they respond to what Trump's policies could mean for inflation.