Election Month Market Moves: Setting the Stage for 2025

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November 2024 brought a whirlwind of market activity following the Trump election, with standout performances setting the tone for what could be the next big trading themes. Here’s a condensed look back—and some thoughts moving forward.

Market Highlights Post-Election

  • Explosive Gains: Ethereum (+49%), Bitcoin (+42%), natural gas (+26%), cloud storage (SKYY) (+17%),  broker-dealers (IAI) (+16%), and software (IGV) (+15%), stole the show.

$ETHUSD Ethereum to US Dollar price chart showing recent upward momentum and resistance levels, essential for traders and investors tracking cryptocurrency trends.

  • Broad Rally: Oil and gas (XOP), financials (XLF), the Russell 2000 (+11%), and internet stocks (FDN) (+10%) showed strong follow-through.

XOP SPDR S&P Oil & Gas Exploration & Production ETF stock chart; trend analysis and key market movements, highlighting the impact of US elections on oil sector performance.

  • Trading Targets: These sectors could lead the next wave of performance—we want to keep an eye on the frontrunners.

Trump-Era Market Signals

  • VIX Decline: A drop from $23 to $13.70 eased market fears, clearing the way for equity gains.

VIX Volatility Index chart showing market fluctuations and an impact from the US Election, highlighting investor sentiment and volatility trends, with potential implications for financial strategies and risk management.

  •  Sector Laggards: Cannabis stocks (MSOS, -37%) and solar energy (TAN, -9%) faced heavy losses amid Trump’s pro-energy, anti-renewables stance.

MSOS cannabis ETF stock chart showing significant decline after US Election in November 2024, highlighting trends in the US cannabis industry and investor sentiment.

Key Risks and Observations

  • Semiconductors are a source of concern: Semi ETF  SMH up 50% YTD but was down ~9% in November.

The Playbook

  • Trump Trade Momentum: Bitcoin (IBIT), software (IGV), S&P 500 (SPY), financials (XLF), broker-dealers (IAI), cloud storage (SKYY), and consumer discretionary stocks are leaders who we need to keep watching.
  • Tactical Approach: Wait for pullbacks, manage risk, and position for continued strength into 2025.

The market has identified its current leaders. As the Santa Claus rally approaches, expect continued momentum, but post-inauguration, market euphoria may cool off. That pull back could present a good buying opportunity.

Stay tuned!