Welcome to Risk Reversal's Market Matrix, your AI-generated podcast, curated by Guy Adami and Dan Nathan, breaking down the day's most impactful stock market and business headlines.I'm your host, Brunson.
It's Friday, November 8th, and these are your top stories. The major indices soared to new highs today, closing out a record week for the stock market.The Dow Jones Industrial Average surpassed 44,000 and the S&P 500 broke 6,000 for the first time.
The rally, fueled by Donald Trump's election victory, has led to the best week for both indexes since November 2023. CNBC notes investors are optimistic about potential Republican policies, including deregulation and tax cuts.
However, concerns about inflation and federal deficit remain.One notable outperformance on the week includes Tesla, gaining around 30 percent and reaching a $1 trillion market cap.
Despite some worries about market valuations, experts suggest the primary uptrend may continue. Bloomberg reports following Trump's election victory, investors initially rushed into Trump trades, but are now reassessing their positions.
The dollar and treasury yields have retreated from post-election highs, while Chinese markets are focusing more on potential stimulus.
Investors are questioning whether Trump will fully implement his proposed tariffs, especially the 60% tariff on Chinese goods.While U.S.stocks continue to rise, other assets are moving sideways.
The market is now balancing Trump's policies with other factors like the Federal Reserve's actions and China's fiscal stimulus.Uncertainty remains about the extent of Trump's trade policies and their impact on global markets, particularly in Asia.
In a recent CNBC interview, Fundstrat's Tom Lee predicted that small cap stocks could outperform significantly if Donald Trump wins a second presidency.
Lee expects small caps to potentially outperform by over 100 percent in the next few years, citing their historical premium to the S&P 500.The iShares Russell 2000 ETF has already seen substantial gains, up 39 percent over the past year.
Lee attributes this potential growth to Trump's campaign promises of tax cuts and domestic economic revival.Additionally, Lee forecasts the S&P 500 could exceed 6,000 by year-end and reach 6,700 in 2025.
However, he cautions that Trump's proposed changes may not fully address broader economic challenges like the rising deficit and federal debt.
After a nearly 10% rally this week, Bank of America's stock gets an upgrade from Citi analyst Keith Horowitz, who sees potential for significant growth.
Horowitz cites attractive valuation compared to peers, potential benefits from lighter regulations under a possible Trump administration, and room for improved returns. The new target price of $54 suggests around 20% upside.
CNBC notes that with shares already up more than 30% this year, and most analysts bullish, Bank of America appears poised for continued success in the market.
According to CNBC, analysts say Bitcoin is poised to reach $100,000 by year-end following President-elect Donald Trump's victory.
Analysts cite Trump's pro-crypto stance, including plans to fire SEC Chairman Gary Gensler and create a Bitcoin reserve, as key factors.The potential for crypto-friendly regulation and increased corporate adoption are expected to drive growth.
Experts also point to the recent Bitcoin halving event and positive economic indicators as catalysts.
While some caution that predictions are challenging, many believe the $100,000 target is achievable, potentially by Trump's inauguration in January 2025. Now to an earnings season update courtesy of FaxSet's Jon Butters.
He writes that the S&P 500's Q3 earnings season shows mixed results.91% of companies have reported, with 75% beating EPS estimates, below the five-year average.
The blended earnings growth rate is 5.3%, marking the fifth consecutive quarter of year-over-year growth.Seven sectors report growth, led by communication services and healthcare.Revenue growth is at 5.5%, potentially the highest since Q3 2022.
Looking ahead, analysts project earnings growth of 9.4% for 2024 and 14.8% for 2025.The forward 12-month P-E ratio stands at 22.2, above both 5-year and 10-year averages.Next week, 12 more S&P 500 companies will report their Q3 results.
According to Bloomberg, China has unveiled a $1.4 trillion program to refinance local government debt over the next five years.This move aims to address one of the country's major economic risks without resorting to new stimulus measures.
Finance Minister Lan Fuan promised more forceful fiscal policy next year, potentially in response to future trade tensions with the United States.
While some analysts view this as a critical step in addressing economic challenges, others argue that direct fiscal stimulus for consumption would have a more immediate impact on growth.
The government's approach suggests a cautious stance, preserving room to respond to potential future economic pressures. Join our Market Matrix giveaway.To enter, simply follow the show on Apple or Spotify and leave a review.
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That's your risk reversal market matrix.Be sure to follow us to get alerts on new episodes every day.All of the articles mentioned on today's podcast can be found in the show description.
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I'm Brunson.Thanks for listening.
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