Rotation.
Robert R. Fragnito
Chief Operating Officer | Financial Advisor | Portfolio Manager at MCF Capital Management, LLC
U.S. stocks finished in positive territory on Friday as investors shifted away from tech shares into other sectors of the market.
Stocks advanced on Friday as investors rotated away from tech and into industrials and cyclicals, citing upbeat growth prospects for the U.S. economy.
U.S. Treasury yields retreated slightly following weak eurozone PMI data, implying fears about the strength of the global economy. However, as reported by S&P Global, U.S. manufacturing and services data reflected growth in November. The U.S. services PMI witnessed significant growth, expanding to 57 from 55 in October.
Investors also monitored developments on the latest nominations for the new Trump administration as former Federal Reserve Gov. Kevin Warsh is being considered for Treasury secretary or the head of the U.S. Federal Reserve.
Gold and Oil prices soared over 5% this week due to intensifying geopolitical tensions between Russia and Ukraine. The U.S. dollar rose to a near two-year high over weakness in the eurozone.??
Trading on Friday:
- The U.S. 10-year yield slipped 2.2 basis points (bps) to 4.409%, down 1.7 bps for the week.
- NYMEX WTI crude oil settled up 1.63% to $71.24 a barrel, up 6.46% for the week.
- COMEX gold settled up 1.41% to $2,709.90 t oz, up 5.62% for the week.
- Bitcoin traded above 99,000 on Friday, with 100,000 in sight.
- The U.S. dollar advanced for its eighth consecutive week, while the euro dipped after economic data showed strength in the U.S. and weakness in the eurozone.
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Looking Ahead
Stocks bucked negative sentiment leading into the weekend as investors rotated away from tech. Sentiment was boosted as growth prospects in the new Trump administration look promising. All three major stock indexes landed firmly in positive territory this week.
However, the strength revealed in today's U.S. PMI data raised some questions about the Federal Reserve's future path of rate cuts. So far, traders still expect the central bank to cut rates at its December policy meeting.
Investors are headed into a seasonally strong period for stocks, with the understanding that the U.S. economy is strong, a new pro-growth administration will take power in 2025, and the Federal Reserve is cautiously willing to cut interest rates.
Our assessment of financial markets is positive.
OUR FIRM
MCF Capital Management, LLC is an independent, family-run, financial advisory firm that manages investment portfolios for individuals and businesses through Quantitative Market Data Analysis.
THIS ARTICLE IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT INVESTMENT ADVICE.?
???SOURCES:?LSEG Workspace, Dow Jones NewsPlus, MarketWatch, Wall Street Journal, Barron’s, FinancialJuice, Investing .com, CNBC, Reuters, Wells Fargo Investment Institute, TradingView, Zacks
Image: Friday’s Intraday Chart (1 Minute), Source: TradingView via LSEG Workspace