Led by the likes of Apple (AAPL), NVIDIA (NVDA), Microsoft (MSFT), Tesla (TSLA), Amazon.com (AMZN), and Salesforce (CRM), the Vanguard Mega-Cap Growth ETF (MGK) surged 3.7% last week. It drew some energy from an AI trade that was ignited by Salesforce’s (CRM) encouraging outlook for its Agentforce AI system for enterprises. The Mega-caps’ influence was plain to see in the outperformance of the market cap-weighted S&P 500 (+1.0%) versus the equal-weighted S&P 500 (-1.3%), while the Russell 2000 declined 1.1% and the S&P Midcap 400 Index fell 1.0%. The S&P 500 and Nasdaq both finished the week at record closing highs.
There were only three S&P 500 sectors that finished higher this week. Not surprisingly, these three sectors are home to the Mega-caps. The consumer discretionary sector (+5.9%) led the charge followed by communication services (+4.1%), and information technology (+3.4%). The other eight sectors had a tough go of it. The consumer staples sector, which declined 0.8%, lost the least amount of ground. Otherwise, losses ranged from 1.8% (financials) to 4.6% (energy).
The November nonfarm payrolls report showed an increase of 227,000 which was moderately above expectations. However, the unemployment rate ticked higher to 4.2% and salaries were up 0.4%. The higher than expected jobs reinforced investor belief that the economy will continue on a soft landing track and the rise in unemployment and salaries will give the Fed cause to implement another 25-basis points rate cut this month.
In other news, Bitcoin topped $100,000 for the first time ever and OPEC+ agreed to extend the additional voluntary adjustments of 2.2 million barrels per day announced in November 2023 until the end of March 2025.