Ottawa, November 15 - As the halfway point of November approaches, there have been many financial developments and movements, including the Federal Reserve's monetary policy actions to the market's response to the U.S. presidential elections and mixed economic signals across various sectors. These dynamics have created a unique environment for November, with analysts and investors closely monitoring these changes.

Markets Response to U.S. Presidential Elections

The U.S. markets reacted strongly to the outcome of the presidential election. With an overall favourable reaction to Donald Trump's election victory on November 5th, The S&P 500 jumped 4.7%, while the Russell 2000 index, which tracks small-cap stocks, surged by 7.8%. This is due to increased optimism regarding lowered regulation and potential tax cuts under the new administration. This product has further bolstered investor confidence in future economic growth.

The bond market also reacted positively to the election. Yields spiked initially, with the 10-year Treasury bond yield reaching 4.48%, its highest level in four months. However, yields reversed course, closing the week at 4.30%, down from 4.37% the prior week suggesting that markets may have overreacted initially as investors weighed the longer-term implications of the election outcome.

The market that responded the most to the election is the cryptocurrency market. Bitcoin dropped to around $87,000 in the cryptocurrency space after briefly surpassing $93,000 earlier in the month. gaining more than 25% since the election, fueled by hopes of favourable policies from the White House. Meanwhile, gold values slipped to around $2,570 an ounce, retreating from last week's record highs of $2,800 as the U.S. dollar strengthened.

Federal Reserve and Interest Cuts

The Federal Reserve continues its fight against inflation through November. Trimming its benchmark policy interest rate by 0.25%, this brought the range to 4.50%-4.75%, following the 0.50% rate cut in September. Chairman Jerome Powell acknowledged that inflation steadily moves towards the Fed's 2% target. This is a positive sign for investors as borrowing costs decrease with interest rates, however, the Federal Reserve remains cautious. Through balancing the need for growth with the risks of inflation and the labour market, Powell indicated that there is no immediate need for the Fed to lower rates further. Thus, signalling that the central bank is comfortable with its current stance.

Market Movers for November

Among notable stock moves, Disney surged 6.2% after posting better-than-expected quarterly results, while Cisco Systems saw a 2.1% drop following a strong earnings report but disappointing future guidance. Other companies like Super Micro Computer saw more drops, with shares sliding 11% after the company delayed its quarterly results and raised concerns about its listing on the Nasdaq.

Mega-cap technology stocks were mixed, with Nvidia, Microsoft, and Apple seeing gains, while Amazon, Alphabet, and Meta Platforms experienced declines. Tesla saw a sharp 5.8% drop after reports suggested that the Trump administration�s transition team is considering scrapping the $7,500 electric vehicle tax credit.

There is a new optimism and caution in the financial markets. The Federal Reserve�s actions have been aimed at sustaining growth, while the election results have sparked renewed confidence in future economic prospects. Moving forward, investors will need to stay updated on Federal Reserve policy, and the new presidential administration�s fiscal actions. As markets adjust to these shifting dynamics, investors will need to maintain vigilance in tracking fiscal policies going into December.