Nov 16, 2023 - Business

Everyone loves stocks again

Illustration of the Wall St. bull with a heart over its eye.

Illustration: Shoshana Gordon/Axios

The market is romping, as equity-friendly news seems to be erupting on all sides.

Why it matters: Stocks' recent move higher marks a break with the last few months, when a slump eroded most of the S&P 500's gains from early 2023.

State of play: This month the S&P is up in 10 of the market's 12 trading sessions.

  • In November, the S&P is up 7.4%, the Nasdaq composite is up 9.8% and the Russell 2000 index of small-cap stocks is up 8.4%.
  • Suddenly, the S&P is just 6% from touching an all-time high, the traditional confirmation that a new bull market has been born.

Zoom in: Part of what seems to be going on is a bit of optimism about improving economic ties between China and the U.S. following President Biden's one-on-one meeting with China's Xi Jinping on Wednesday.

  • Companies for which China is a key base of production — such as toy makers Hasbro and Mattel, and sneaker makers V.F. Corp., Skechers and Nike — all posted strong gains on Wednesday.
  • Likewise, stocks of companies for which China is a large source of revenue growth also jumped, including Expedia, Estée Lauder and Match Group.

Meanwhile, there may be some relief among investors about the passage of a short-term funding bill that avoids a government shutdown through the holidays.

The big picture: All this adds to the plethora of favorable developments that are pushing the S&P 500 toward what would be its best month of the year — if trading ended Wednesday.

The bottom line: A couple of weeks ago, hardly anybody saw a rally like this coming — but here we are.

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