Bulls Ran Wild Last Week After Fed Backed Down

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Stocks Just had their best week in seven years as the Federal Reserve turned dovish.

The S&P 500 surged 4.9 percent between Friday, November 23, and Friday, November 30 — its biggest weekly gain since December 2011. More than nine-tenths of its members advanced, and every major sector climbed at least 2 percent.

The Nasdaq-100 fared even better, ripping almost 6.5 percent. Still, the tech-heavy index remains under a potentially key level around 7,000.

Fed Chair Jerome Powell said monetary policy is “just below … neutral,” signaling that the central bank will stop hiking interest rates sooner than previously expected. That removed one of the biggest worries plaguing sentiment in recent months.

Consumer discretionary stocks, health care and technology were the top sectors with gains of 6 percent each. Safe-havens like real-estate investment trusts and utilities lagged the broader market, while transports had their best week in a year.

S&P 500, weekly candles, with changes below.

Aside from Powell’s comments, most economic news deteriorated slightly from very strong levels. Initial jobless claims rose more than expected but remained near long-term lows. Consumer confidence also dipped for the first time in five months, and housing data remained weak.

Salesforce.com (CRM) was the biggest gainer in the S&P 500 last week, spiking 17 percent on the heels of another strong quarter. Amazon.com (AMZN), Nvidia (NVDA) and Vertex Pharmaceuticals (VRTX) vied for the No. 2 spot.

Luxury-goods merchant Tiffany (TIF) found itself at the bottom of the totem pole with an 11 percent drop after missing estimates. Ditto for Laboratory Corp. of America (LH), except the medical-testing stock fell just 10 percent after apparently losing hospital referrals.

Oil was also in the news, concluding its worst month in at least 20 years as inventories continued to build. Energy will probably stay in the news as OPEC members head to their meeting on Thursday.

That’s not the only big event in coming sessions. The Institute for Supply Management’s manufacturing index and construction spending come out later this morning.

Tomorrow features automobile sales, along with earnings from Autozone (AZO), Hewlett-Packard Enterprise (HPE), Toll Brothers (TOL) and Marvel Technology (MRVL).

Markets are closed Wednesday in memory of the late President George H.W. Bush. Some events planned for the day are likely to be rescheduled. ADP’s private-sector payrolls report was due. Alphabet (GOOGL) CEO Sundar Pichai and the Fed’s Powell were slated to appear before two different parts of Congress in the late morning. There’s also ISM’s service index, oil inventories and the Fed’s Beige Book of economic conditions.

Aside from the OPEC meeting, Thursday features jobless claims and factory orders. Broadcom (AVGO) reports earnings as well.

The week concludes with the Labor Department’s ever-important non-farm payrolls report on Friday morning. Consumer sentiment follows shortly after.

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David Russell is VP of Content Strategy at TradeStation. Drawing on nearly two decades of experience as a financial journalist and analyst, his background includes equities, emerging markets, fixed-income and derivatives. He previously worked at Bloomberg News, CNBC and E*TRADE Financial. Russell systematically reviews countless global financial headlines and indicators in search of broad tradable trends that present opportunities repeatedly over time. Customers can expect him to keep them appraised of sector leadership, relative strength and the big stories – especially those overlooked by other commentators. He’s also a big fan of generating leverage with options to limit capital at risk.