After post-election speed bump, Wall Street gets back to gains

MANHATTAN (CN) — With the election out of the way and the rest of 2024 mostly baked into current equities, Wall Street has begun focusing on next year.

By the closing bell on Friday, the Dow Jones Industrial Average grew by 852 points, the S&P 500 increased by 99 points, and the Nasdaq gained 323 points.

Economic data this week showed the U.S. economy remains strong with very few headwinds apart from interest rates. Experts increasingly say the odds of a recession have continued to fall, even though high interest rates and volatility in the bond market remain concerns.

“Our 2025 outlook remains bright, as the consumer is strong, manufacturing is poised to rebound, and business equipment spending has plenty of tailwinds,” Matthew Martin, senior U.S economist at Oxford Economics, wrote in an investor’s note.

On Friday, the University of Michigan’s monthly consumer sentiment survey — which was released early due to the Thanksgiving holiday — showed a slight uptick for November compared with October, gaining a little more than a point.

The university’s “consumer expectations” index also increased over the last month, from 74.1 to 76.9, though the “current conditions” index fell by a point.

“All year, consumers have repeatedly told us that the trajectory of the economy hinges on who becomes the next president,” Joanne Hsu, survey chief economist, said in a statement.

However, the index did not show an immediate move in sentiment either way, she noted. “This likely reflects the high level of uncertainty over how the next president will implement his economic agenda,” Hsu said. “Consumers remain in a wait-and-see mode as the nation prepares for a presidential transition.”

Retail sales in October also saw another solid increase, with the U.S. Census Bureau reporting a 0.4% increase last month while September’s retail sales were revised upward to 0.8%.

The only other major economic indicator released this week concerned housing. On Tuesday, the Census Bureau reported that showed that recent hurricanes likely stalled residential projects, with the Southeast United States seeing a downturn in construction and an overall 3.1% decline in October.

Overall, housing starts have seen a downward trend, said Jeffrey Roach, chief economist for LPL Financial, which was exacerbated by the storms and homeowners looking to start projects after the election. However, he noted, builders have reported an uptick in traffic among prospective buyers.

Home builder confidence rose this month, however, with the National Association of Home Builders’ index increasing by three points despite about one-third of builders noting they cut home prices this month.

“With elections now in the rearview mirror, builders are expressing increasing confidence that Republicans gaining all levers of power in Washington will result in significant regulatory relief for the industry that will lead to the construction of more homes and apartments,” said NAHB chair Carl Harris.

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