The total U.S. stock market climbed nearly 7% in November, with most of the gains coming in the days immediately following the election. Small caps led the way. The U.S. dollar also rose.

Share price gains

The most direct reason for share price gains was likely tied to the expectation that Trump will extend corporate tax cuts or possibly enact new ones. Beyond that, we will largely have to wait and see what actual policy is enacted. Trump is expected to be protectionist and to run large deficits, especially with a supportive Congress. This, along with possible deportation efforts, likely raises the odds of inflation rekindling. It will be interesting to see if plans for Elon Musk and Vivek Ramaswamy’s efficiency efforts amount to significant changes in spending. Talk of tariffs is already beginning. We do expect new import taxes to be initiated, but the magnitude and specifics remain highly uncertain.

International stocks trailing 

International stocks failed to join the rally and are once again significantly trailing U.S. stocks for the full year. The U.S. now represents two-thirds of the total global public equity market despite accounting for only about a quarter of global GDP. On a price-to-earnings basis, international stocks are trading at by far the largest discount to the U.S. in the last 20 years, according to JP Morgan. Some are using Trump’s election as a reason to give up on international stocks, and sentiment toward the asset class feels like it has hit a new low. Global diversification has been frustrating for U.S. based investors in recent years, but we are reminded that the cycles are long, and the biggest gains often follow periods of acute investor disdain.

Nvidia meets expectations

Nvidia was the last of the major US technology companies to release earnings on November 20th. The event was highly anticipated but ended up being somewhat anticlimactic. The leader in AI GPU chips posted another quarter of dramatic sales and earnings growth, but they merely matched expectations. The stock has traded lower since the announcement but remains one of the best performers of 2024.