Stock Market Analysis - November 18, 2024

Overview

As the market opens on November 18, 2024, traders are reacting to a week filled with significant events that have impacted investor sentiment and asset prices. The S&P 500 ended last week on a positive note, gaining approximately 2% as economic data pointed towards steady growth despite inflationary pressures.

Key Events Impacting the Market Last Week

1. Inflation Data: The Consumer Price Index (CPI) released on November 13 showed inflation rose 0.5% in October, slightly above expectations. This has led to speculation about future Fed interest rate hikes.
2. Earnings Reports: Major tech firms including Apple and Microsoft posted strong third-quarter earnings, which have helped boost confidence in the technology sector.
3. Employment Figures: The Non-Farm Payroll report released on November 8 indicated a surprising increase of 200,000 jobs added in October, signaling labor market strength.

Events to Watch this Coming Week

• Federal Reserve Meeting: The Fed is holding a key meeting on November 20, with anticipated discussions on interest rates. Investors will be closely watching for signals regarding future monetary policy.
• Retail Sales Data: Upcoming retail sales figures on November 22 could provide insights into consumer spending trends heading into the holiday season, a critical time for many sectors.
• Geopolitical Tensions: Developments in global relations, particularly regarding China and U.S. trade policies, could lead to market volatility this week.

Recommendations

• Buy: Consider adding to positions in ETFs like the SPDR S&P 500 ETF (SPY) and Invesco QQQ ETF (QQQ) given their recent performance and positive earnings outlook.

• Individual Stocks: Look at NVIDIA (NVDA) and Amazon (AMZN), as both have favorable growth trajectories due to increased demand in their sectors (AI and e-commerce, respectively).

• Sell: Be cautious with stocks heavily tied to interest rate sensitivities, such as real estate investment trusts (REITs). If you hold Vornado Realty Trust (VNO), consider trimming your position before the Fed meeting.

Conclusion

As we navigate through the upcoming week, remain vigilant about the indicators provided by the Fed and retail sales data. These will greatly influence market direction. Positioning in strong sectors like technology and ETFs could provide stability amidst any potential volatility.