The Monday Morning Playbook: Week of December 2, 2024

Good morning,

The Brown Technical Insights time horizon is not two weeks.

That said, after being off last week for Thanksgiving, it has been a good two weeks for the most recently featured “Plays” from November 18.

from the November 18 Monday Morning Playbook

As a refresher, the call was to bet on bond yields stalling at resistance (4.47% on the 10-year, 4.4% on the 2-year) and related interest-rate sensitive areas of the equity market including small caps, real estate, and utilities to benefit.

Of the major asset classes, sectors, and indexes we regularly look at in last week’s performance, those were literally the 3 top performers, all with gains of more than 4.6%.

But it was far from just those areas. The S&P 500, Dow Jones Industrial Average, and Nasdaq 100 all gained between 2.6% to 3%, and all 11 sectors were higher.

Simply put, the equity market didn’t want to see rates break out, and they didn’t.

Adding to the bullish setup for stocks was the dollar, which finally fell on a weekly basis for the first time in over 2 months.

Looking forward, rates and the dollar are still risks to watch because I don’t think it is a sure thing they swing right back to recent lows. But as long as we’re below recent highwater marks, we should continue to lean into equities and risk assets and put new cash to work as quickly as we get it.

This week’s report will review:

• The reversals in rates and the dollar

• Biggest beneficiaries

• Major index technicals, breadth, and key stocks

• Animal spirits and sentiment risk

• ETF movers

• and more!