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

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 yesterday.

• 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 yesterday.
• 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 yesterday.

• Long-term interest rates — hugely influential for stock values — are down sharply, as inflation eases and the Fed hikes appear finished.
• The economy continues to seem quite strong.
• And earnings have been pretty good, with S&P 500 companies on track for the biggest jump in profits since the middle of last year. (Target and Home Depot both soared after reporting better-than-expected profits this week.)

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

"For two large countries like China and the United States, turning their back on each other is not an option ... conflict and confrontation has unbearable consequences for both sides."

Xi and Biden met at the 654-acre Filoli estate — often used to host weddings of nearby tech elite — about 30 miles outside San Francisco; there's a mansion, English gardens, and an orchard.

• The setting may have been genteel, but the stakes were high for the four-hour meeting.
• Both walked away saying they're committed to building a stronger relationship and working together in as many realms as feasible.

What happened: Biden achieved the goals he laid out ahead of time, including a resumption of military-to-military contact and an agreement to maintain closer lines of communication with Beijing.

The leaders agreed to crack down on the supply chain for illegal fentanyl, which often begins in China and ends with overdose deaths in the U.S.

• The agreement is aimed at limiting the manufacturing and export of fentanyl precursors from China to Mexico, where it then enters the U.S., Axios' Caitlin Owens and Alison Snyder write.

Reality check: On a much bigger issue, Biden reiterated that the U.S. will keep helping Taiwan try to deter a Chinese attack.

The bottom line: The months of intense diplomacy required to make this meeting happen paid off.

Go deeper

💰 Senate approves stopgap bill to keep government funded until 2024. (Axios)

👀 FDIC chair, known for temper, ignored bad behavior in the workplace, WSJ reports.

🛒 Walmart reports a 5% jump in sales for the third quarter, citing e-commerce. (CNBC)

🪧 Starbucks workers strike at 200 union stores on Red Cup Day. (Axios)

Annual wholesale price inflation has returned to pre-COVID levels, in another good sign that the post-pandemic price surge really is done and dusted, Matt writes.

• The Producer Price Index was up just 1.3% year over year in October, a sharp deceleration from wholesale inflation of more than 11% seen in the middle of 2022. It's now been under 2.5% for seven months.

Why it matters: This measure of the wholesale prices businesses charge to one another is considered something of a leading indicator for the prices that consumers end up paying.

The bottom line: More good news on prices is the pipeline.

The cost of extreme weather events is at least $150 billion per year in direct damages alone — and that's projected to climb in the near term, according to the latest National Climate Assessment, Axios' Andrew Freedman reports.

The big picture: Billion-dollar disasters are occurring far more frequently now than they did in 1980, the findings show, going from about one every four months to one every three weeks.

• Rising frequency and total costs are related to a booming population and increased expanse of the built environment, as well as climate change.