Quiver Morning Stock Market Reseach

U.S. equities rose for a fifth consecutive session, propelled by a rotation into small-cap stocks, which drove the Russell 2000 index to its highest level since 2021. Investor optimism is riding high as President-elect Donald Trump’s pro-business agenda promises tax cuts, deregulation, and fiscal stimulus measures that could stimulate economic growth. Economically sensitive stocks led gains, with the Dow Jones (DIA) climbing 0.9% and the S&P 500 inching up 0.2%. Bitcoin also surged, crossing $84,000 as cryptocurrency traders anticipate a more favorable regulatory environment under Trump. The bullish sentiment extends to corporate earnings, where S&P 500 (SPY) companies have posted an 8.4% profit increase for Q3, doubling initial forecasts. Analysts expect continued growth, with a projected 13% profit increase next year, the strongest since 2021. Meanwhile, Wall Street strategists caution that rising Treasury yields (TLT), nearing 5%, could present challenges for risk assets if the trend continues. Fed rate cuts and Trump’s policy agenda will be crucial in sustaining this rally, as market participants eagerly await the latest inflation data for additional clues. Market Overview:

• Small-cap Russell 2000 (RUT) reached a three-year high, reflecting investor optimism.
• S&P 500 up 0.2%, Dow Jones gained 0.9%, led by economically sensitive stocks.
• Bitcoin surpassed $84,000 amid expectations of pro-crypto policies under Trump.

Key Points:

• Corporate earnings beat forecasts, with Q3 profits for S&P 500 up 8.4%.
• Inflation and bond yields are key variables in assessing long-term market stability.
• Analysts forecast a 13% increase in S&P 500 earnings next year, bolstering sentiment.

Looking Ahead:

• Investors watch for upcoming U.S. CPI data to gauge inflationary pressures.
• Trump’s pro-business policies could drive further gains in U.S. equities.
• High yields may pressure growth stocks if the bond market tightens further.

The recent surge in U.S. stocks underscores a rally driven by expectations of a growth-focused administration under Trump. Small-cap stocks, as reflected in the Russell 2000’s performance, are enjoying renewed attention as investors anticipate fiscal stimulus and a pro-business stance that favors smaller firms. Bitcoin’s recent gains further highlight market optimism about regulatory shifts that could benefit risk assets across the board. As corporate earnings continue to exceed expectations and key economic data is on the horizon, investor sentiment remains bullish but cautious. Rising Treasury yields could temper enthusiasm, particularly in growth sectors, should they climb further. With inflation data and fiscal policy under scrutiny, the direction of U.S. markets remains closely tied to both macroeconomic indicators and Trump’s policy trajectory.