3 months ago • 1 min
What’s going on here?
US stocks just pulled off their second-best November in over 40 years.
What does this mean?
High interest rates can drag stocks down, so investors weren’t counting on an especially jolly end to the year. But when inflation started retreating and rate cuts became the focus of water-cooler conversation, US stocks were really feeling the festive cheer. So not only did investors pick up stocks in anticipation of cuts, but the ones who hadn’t expected the pick-up started piling in out of fear of missing out. That meant US stocks notched some of their best November results in four decades, and December could follow suit. ‘Tis the season for “window dressing”, when pros sell their losing stocks and buy better looking ones instead to polish up their portfolios.
Why should I care?
For markets: Decisions, decisions.
You can’t blame investors for being caught off-guard, though. The economy is swaying between two completely opposite but equally likely scenarios. One: hardy economic growth, low unemployment, and tamed inflation. Two: a hard recession, out-of-hand unemployment, and stubborn inflation. Both outcomes would heavily influence the stock market, so it’s no surprise that investors can’t seem to make their minds up one way or the other.
The bigger picture: It’s a party in the USA.
The US has dominated the world’s stock markets for over a decade. And just as the most famous nightclubs charge exorbitant entry fees, those stateside show-off stocks charge a healthy admission price. But more intimate, small parties have their own charm, so investors may want to consider cashing in on some American stocks and spending the cash exploring foreign markets.
Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.