Thanksgiving 2024: Strong US Markets and Economic Optimism

Thanksgiving 2024: A Year of Market Highs and Economic Growth

A lot to be thankful for this Thanksgiving

Netflix shares have risen by +81% this year in 2024 and are now trading at 874.81. The highest price was on November 21, at 904.94.

Apple shares are testing the most important resistance in the daily chart at around 236 dollars per share. It has also risen by more than 25% in 2024. Dow Jones is up +19% year-to-date and is also close to all-time highs. The highest price was on November 27th. SP500 has also risen by +25% since January, and it looks like it will keep the way up. Nasdaq has risen by +22% in 2024 and is currently close to its all-time high. The dollar index has been somewhat sideways throughout the year, but it has still gained 4.7% in 2024.

The VIXX is sitting calmly near a support region on the daily chart, signalling that, at least for now, fear and uncertainty are far away.

The latest US unemployment rate reading was 4.1%, and next week's employment report data is not expected to show a number much different from that. This is also close to the lowest reading since 2020.

The latest reading on inflation in the US was 2.6%, one of the lowest readings ​​since 2020. In economics, it is known that there is a trade-off between variation in inflation and the unemployment rate.

The return of Donald Trump may bring even more economic optimism, as he promises to increase tariffs on imported products to favour domestic producers. In addition, one of his campaign promises was to reduce bureaucracy in the production process, probably reducing regulation in several sectors. This is expected to benefit both small entrepreneurs, which will have lower barriers to entry into the market, and large corporations, which will likely have fewer restrictions on production, including environmental and energy restrictions. This can bring more economic growth and a decrease in the unemployment rate in the US, and with that, the expectation is that GDP will grow even more in 2025, which may foster business growth and even more significant rises in the US indices. Of course, faster economic growth will likely keep inflation at the centre of monetary policy discussions. Discussing ways to reduce inflation when everything else is going well, and there is economic growth is like trying to brake a car that is speeding around a curve. For a sensible driver, this is the right thing to do, but politicians are not always so sensible. In practice, this means that faster economic growth may mean that the Fed will have to deal with higher inflation in 2025 by adopting restrictive measures (i.e., braking the car). The problem may be that Donald Trump likes a faster economy, and this has the potential to increase already known tensions between Trump and the FED over the next 4 years.

But these are future problems, and for now, the US seems to have a lot to be thankful for this Thanksgiving.

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Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.