Dow Jones, S&P 500 keep winning streak alive, set new highs

The DOW and the S&P 500 just can’t stop winning. Both indices surged to new highs on Friday, capping off an impressive six-week streak.

The Dow Jones Industrial Average edged up by 36.86 points, closing at 43,275.91, while the S&P 500 gained 0.40%, finishing at 5,864.67.

Not to be left out, the Nasdaq Composite, buoyed by strong earnings from Netflix, climbed 0.63% to 18,489.55. This six-week rally is the longest streak of weekly gains for both the DOW and the S&P in 2024.

The former ended the week up 0.96%, while the latter closed the week with a 0.85% gain. The Nasdaq didn’t fall behind, wrapping up the week 0.80% higher.

Netflix had a killer day on Friday, rising 11% after reporting better-than-expected earnings, with ad-tier memberships growing by 35% in just three months. Procter & Gamble also reported earnings that beat estimates, though its revenue fell short.

Election year rally defies expectations

The stock market’s performance is defying the usual election year jitters. Rob Williams, chief investment strategist at Sage Advisory, pointed out that investors typically expect a dip before an election.

But this time, it’s different. “We’re seeing a reverse,” he said. “Stocks might remain strong up to the election, with volatility coming after.”

He thinks this could be due to investors already pricing in a potential win for Donald Trump. His business-friendly policies, including lower taxes and less regulation, could be driving optimism among investors.

More than 70 S&P 500 companies have already reported earnings this season, with 75% of them beating Wall Street’s expectations.

Meanwhile, hedge fund billionaire John Paulson believes that the economic strength we’re seeing is mainly due to increased federal spending.

He pointed to a 14% jump in government spending compared to last year, with the national deficit nearing $2 trillion.

Small-cap stocks also saw a boost, with the Russell 2000 index gaining around 2% for the week. Though it was relatively flat on Friday, small caps are outpacing the broader market, which rose less than 1% this week.

Crypto keeps surging amid stock market gains

Let’s not forget about crypto in all this. Bitcoin had a big week, surging 10.48% to hit $69,000, with the $70,000 mark now clearly in sight.

Institutional interest remains strong, with the BTC ETF raking in $203.3 million in inflows this week. The ETF closed on Friday with a six-day winning streak.

The U.S. Securities and Exchange Commission (SEC) approved Cboe’s BTC ETF options to be listed on the NYSE, which could help provide the liquidity needed to sustain this momentum. 

Bitcoin’s dominance in the crypto market is now at 58%, a level not seen since April 2021. With resistance at 60%, traders are anticipating a possible breakout that could ignite a broader rally among Layer 1 coins. 

As for the global picture, Japan continues to deal with weak inflation. Headline inflation dropped to 2.5% in September, down from 3.0% in the previous month.

This has kept the Bank of Japan (BOJ) from raising interest rates, contributing to a rally in the USD/JPY pair, which now sits below 150.