The financial markets witnessed a rollercoaster ride during the week of November 11–15, 2024. A standout development was the exceptional rally in cryptocurrencies, signaling renewed investor confidence in decentralized assets. XRP saw an explosive +58.89% surge, fueled by regulatory clarity in the U.S. and expanded adoption by financial institutions. Similarly, Bitcoin (BTC) climbed by +17.34%, while Litecoin (LTC) gained +15.42%, showcasing growing demand across digital asset classes.
Meanwhile, traditional commodities struggled. Gold, represented by SPDR® Gold Shares (GLD), declined by -4.54%, reflecting a shift in investor sentiment from safe-haven assets to equities and risk-on strategies.
Major stock market indices showed mixed performances but leaned toward volatility. The Invesco QQQ Trust (QQQ) dropped by -3.44%, hurt by losses in the technology sector, while SPY and DIA also experienced turbulence, driven by concerns about Federal Reserve interest rate policies and geopolitical headwinds. Small-cap stocks in the Russell 2000 (IWM) had one of the steepest declines, signaling risk aversion among investors focused on growth.
On the sectoral front, financial stocks showed modest strength, with KBWB gaining +1.65% on the back of robust earnings from major banks. However, the healthcare and technology sectors struggled, with SOXX (Semiconductors) down -8.25% and PSCH (SmallCap Healthcare) plummeting -6.60%. This bifurcation highlights investors’ growing concerns about growth and valuations in high-risk areas of the market.
Global Overview
Market Trends Across Key Regions
Global markets displayed sharp contrasts this week. In the U.S., heightened volatility underscored investor concerns about the Fed's potential rate hikes, which could further slow economic growth. The Dow Jones Industrial Average (DIA), SPY, and QQQ all posted losses, reflecting ongoing fragility in sentiment.
In Asia, markets struggled significantly, with the iShares MSCI All Country Asia ex Japan ETF (AAXJ) falling -4.13%, and South Korea’s EWY plunging -5.08%, driven by weak Chinese export data and geopolitical tensions. European equities showed relative resilience but still ended the week in the red. The WisdomTree Europe Hedged Equity ETF (HEDJ) declined -0.99%, weighed down by slowing industrial activity and inflationary pressures.
Cryptocurrencies: A Bright Spot
The most noteworthy global trend was the extraordinary performance of cryptocurrencies. XRP surged on the back of favorable legal rulings in the U.S., marking a win for decentralization advocates. Bitcoin’s rally was buoyed by institutional inflows, while Litecoin benefited from increased utility in peer-to-peer payment systems. These trends underscored the growing integration of digital currencies into mainstream financial ecosystems.
Sector Overview
Winners and Losers in Key Sectors
- Financials: The financial sector emerged as a relative outperformer. KBWB rose +1.65%, supported by rising interest rates that benefited net interest margins for banks. Similarly, XLF gained +1.10%, highlighting stability within the sector amid broader market declines.
- Energy: The First Trust North American Energy Infrastructure ETF (EMLP) added +0.79%, reflecting stabilization in oil prices and steady performance from midstream energy companies.
- Healthcare: The healthcare sector struggled significantly, with PSCH declining -6.60% and IBB (Biotech) falling -9.87%, driven by disappointing quarterly earnings and increasing pricing pressures.
- Technology: Technology stocks faced sharp corrections, with SOXX tumbling -8.25% due to weaker semiconductor demand forecasts and rising inventories, which painted a grim outlook for growth-oriented investors.
Commodities and Gold: Weak Safe Havens
Gold’s performance, represented by GLD (-4.54%), reflected waning demand for traditional safe havens as investor appetite shifted toward higher-risk assets like cryptocurrencies and equities. The decline in gold prices also correlated with a strengthening U.S. dollar and rising Treasury yields, further dampening appeal for the precious metal.
International Overview
Regional Performance Insights
- North America: U.S. markets experienced sharp volatility, particularly in technology and small-cap stocks. The QQQ (-3.44%) suffered amid tech-sector losses, while the Russell 2000 (IWM) declined more sharply, reflecting a broader risk-off sentiment.
- Europe: European equities had a mixed week, with the EZU (-2.16%) and HEDJ (-0.99%) reflecting soft industrial production and lingering geopolitical tensions. German industrial resilience helped offset broader regional declines.
- Asia: Asia faced significant headwinds, with South Korea’s EWY (-5.08%) among the worst performers. Chinese economic uncertainties and falling export activity dampened investor sentiment.
- Latin America: Latin American markets also experienced losses, with the EWZ (-1.05%) and BRF (-1.24%) highlighting ongoing concerns about growth and inflation in the region.
Market Volatility for Key ETFs
The week was characterized by rising volatility in major U.S. ETFs:
- QQQ: The Nasdaq-focused ETF saw a decline of -3.44%, impacted by technology sector weakness. Volatility spiked as semiconductor and growth stocks came under pressure.
- SPY: The S&P 500 ETF faced declines amid mixed earnings reports and fears over prolonged rate hikes.
- DIA: The Dow showed resilience compared to its peers but still ended the week in negative territory, reflecting broader market caution.
- IWM: Small-cap stocks were hit hardest, with the Russell 2000 ETF (IWM) showing sharp losses due to fears of higher borrowing costs impacting smaller businesses.
Summary
The week ending November 15, 2024, highlighted the growing divergence across asset classes and sectors. Cryptocurrencies stood out as the best-performing asset, with XRP and Bitcoin leading the rally. Traditional equities experienced heightened volatility, with financial stocks showing resilience while technology and healthcare suffered steep declines. Globally, Asian and Latin American markets bore the brunt of the downturn, while European equities managed to hold ground better. Commodities such as gold saw significant losses as investors favored riskier assets.