A Whopping $40B Injected Over 2 Weeks In November 💉

Thanks to Tiger for awarding the weekly top prediction for QQQ. The Thanksgiving week has historically been a period of thinner trading volumes due to fewer market participants. This can lead to lower liquidity and, in some instances, heightened volatility.

However, it’s often accompanied by a slight uptick in consumer and retail stocks, influenced by Black Friday sales and the kickoff of the holiday shopping season.

Yet, there’s also the often-cited “Thanksgiving Rally”: a pattern where the stock market has shown a tendency to perform slightly better during the holiday week.

Rocky White, a senior quantitative analyst at Schaffer's Investment Research, analyzed that in the past 50 years, the S&P 500 has seen an average increase of 0.54% during the week of Thanksgiving. Furthermore, 68% of these occurrences have yielded positive returns.

As trading resumes its full pace on Monday, Nov. 27, the market's eyes will be on the retail data emerging from Black Friday and Cyber Monday sales. These figures serve as important barometers of consumer confidence and spending habits, potentially swaying stock prices in sectors closely tied to consumer trends.

U.S. stocks could start the new trading week on a mixed note as they reopen after Thanksgiving. Friday’s session is abbreviated and the market closes at 1 p.m. ET. Nvidia Corp.’s (NASDAQ:NVDA) lean patch continues and the negative sentiment could pervade into the rest of the tech space. Bond yields have seen a small upward bounce, while crude oil continues to languish. Traders may also react to the S&P Global’s purchasing managers’ data shortly after the market opens.

Getting FOMO now?

Investors have injected a staggering $40 billion into equities over the past two weeks, propelling the S&P 500 index to its most robust monthly performance in 2023. The year 2023 has seen an influx of capital into equities. A whopping $143 billion has been funneled into this asset class, alongside an additional $42 billion poured into tech funds, according to Bank of America.

The S&P 500 index has experienced an impressive 8.7% increase thus far in November, marking its strongest monthly performance since July 2022. Looking at the returns in November, the last time the S&P 500 boasted such a robust gain in this month of the year was in 1980 when it rallied by 10.2%. Friday saw major U.S. averages closing out their fourth consecutive week in the green, signifying the longest winning streak since June of the same year.

Notably, the SPDR S&P 500 ETF Trust (NYSE:SPY), the largest exchange-traded fund tracking the S&P 500, has generated returns of 18% year-to-date, nearly doubling the 30-year yearly average for the index, with more than a month still left in the year. Tech stocks have outperformed even further, with the Invesco QQQ Trust (NASDAQ:QQQ) surging by 45% year-to-date.

A substantial 74% of the stocks that make up the S&P 500 index are now trading above their 50-day moving average, signaling broad market strength. Additionally, 53% of S&P 500 stocks are trading above their 200-day moving average, highlighting the sustained momentum in the market.

ETF performance to date

As the year-end draws close, a Morgan Stanley analyst cautioned that 2024 is likely to be a “tale of two halves” — a cautious first half giving way to strong performance in the second half of the year.

Mike Wilson, the firm’s Chief Investment Officer, warned that risks to global growth, driven by monetary policy, remain high, and earnings headwinds may persist into early 2024 before a recovery takes hold. In the second half of the year, falling inflation should lead to monetary easing, bolstering growth,” he added.

"We think near-term uncertainty will give way to a comeback in U.S. equities," said Wilson. He expects earnings growth to remain robust into 2025, with positive operating leverage and productivity growth from artificial intelligence likely leading to margin expansion.

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