Market Trends Overview

In the latest business roundup, major stock indices experienced moderate gains last Friday, marking a robust performance over three consecutive weeks. This positive momentum was primarily driven by a decline in Treasury yields, which fell due to unexpectedly low U.S. inflation data. Investors are increasingly optimistic that the Federal Reserve's cycle of interest rate hikes may be coming to an end. The yield on the 10-year Treasury note dropped by 19 basis points, settling at 4.44%.

During the past week, the Dow Jones index saw a rise of 1.9%, the S&P 500 increased by 2.2%, and the Nasdaq Composite gained 2.4%. Cumulatively, over the last three weeks, the Dow surged by 7.8%, the S&P 500 by 9.6%, and the Nasdaq by an impressive 11.7%. The week concluded with the 10-year Treasury yield at 4.44%, while the 2-year yield stood at 4.90%.

The US Dollar faced its most challenging week since July, declining by 1.60% to close at 103.90 in the US Dollar Index. This drop was driven by soft inflation figures and tepid economic activity in the U.S. A review of the daily chart indicates a bearish technical outlook for the DXY, with sellers dominating, suggesting potential further declines. The Relative Strength Index (RSI) currently trends below the midline, indicating a bearish perspective, while the MACD histogram shows an increase in red bars. The index is positioned below the 20 and 100-day Simple Moving Averages, reinforcing a negative outlook for the USD. Key support levels are seen at 103.80, 103.60 (200-day SMA), and 103.30, with resistance levels at 104.15 (100-day SMA), 104.50, and 105.00.

Private Equity Landscape

Private equity firms, which focus on investing in non-public companies, currently possess a staggering $2.5 trillion in cash reserves. This substantial pool of funds is typically used by PE firms to acquire private companies with growth potential, aiming to improve their valuations. Historically, higher cash reserves have been linked to increased PE deal activity.

Despite this impressive cash reserve, actual deal-making activity has been lackluster. The current economic landscape, characterized by multi-decade high interest rates and uncertainty, has caused mergers and acquisitions to drop to a 10-year low. The infographic presented by Citizens illustrates the historical rise of cash reserves and discusses potential catalysts for a revival in M&A activity.

Market Statistics Summary

Before delving into further statistics, let’s take a look at the weekly and year-to-date numbers from various markets and assets.

Bitcoin Adoption Trends

The accompanying graph illustrates a significant increase in blockchain addresses holding at least $1,000 worth of Bitcoin (BTC), closely mirroring BTC's price trends. On November 15, the total reached a record high of 8,306,118, surpassing the previous peak from two years ago. It is important to note that despite this surge in address activity, Bitcoin's price remains 89% lower than its peak of $69,000 from November 2021.