This week brought two big events: the election and the latest from the Fed. With both out of the way, we’re seeing some interesting moves across the markets as we head into the weekend.
Stock Market Highs and Corrections in Gold
We’re looking at new all-time highs for the S&P and Nasdaq, with the S&P now above 6,000, which is pretty incredible.
But not everything is rallying. Gold, for example, has corrected from around $2,800 down to $2,700, even dipping as low as $2,675 at one point.
What’s behind that drop? Mainly, a stronger dollar, which has climbed back up to around 104.65. With the dollar up and some certainty back in the market post-election, the “fear factor” that often pushes gold higher has faded, giving us this correction.
Silver, Copper, and Bond Market Movements
Silver and copper have also seen similar corrections.
Bonds, on the other hand, have been hit hard since the Fed’s September rate cut, though we did see a bit of a bounce this week.
Right now, bonds are back up to around 118 after dropping to the 116–117 range. We’ll see if this bounce holds as we move forward.
Sector Shifts and Energy Plays
One interesting trend is the sector rotation happening as the market looks ahead to a new administration.
The “green” sectors, including some renewable energy plays, are likely to face some pressure.
Meanwhile, traditional energy, and even nuclear-related stocks, could be in for a boost.
As more nuclear plants come online or get built, there’s going to be a big question around infrastructure — specifically, how to get that power distributed and who foots the bill for those transmission lines.
Companies in the energy and infrastructure sectors might be worth keeping an eye on here.
Surprise Surge in Grains
One of the biggest surprises this week was the sudden surge in grain prices following the election. Even the grain experts were scratching their heads at this move.
The initial reaction might seem odd, especially if we anticipate the Trump tariffs that could initially hurt farmers.
But with the prospect of regulatory changes, it’s possible we’re seeing early optimism from the agricultural sector.
Looking Ahead: Key Data Next Week
Next week is going to be big for economic data, with the Consumer Price Index (CPI) on Wednesday, Producer Price Index (PPI) on Thursday, and retail sales on Friday.
These reports will be essential in determining if the Fed’s recent rate cuts were justified.
If CPI and PPI show inflation cooling, the cuts might make sense.
But if inflation is still running hot, those cuts could raise some eyebrows.
For now, if you’re positioned on the long side, you’re probably in a good spot, but it’s essential to be cautious and selective with your investments.
Certain stocks could see a nice lift, while others may get left behind as the market adjusts to the post-election landscape.
Have a great weekend, and let’s see what next week brings!
— Geof Smith
P.S. Nate Tucci’s Jump Trades strategy targets a huge return from just a tiny move in the stock. Click here to see what he’s targeting over the weekend.
