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Since last week’s election, the US stock market has experienced a flurry of activity, both ways S&P 500 again Dow Jones Industrial Index (DJI) reaches the top.
The S&P 500 had its best week of the year, surpassing the 6,000-point mark for the first time in history. DJI was right behind it, breaking 44,000 points in another record first.
The best performing sectors include financials, energy and industrials. On the other hand, consumer staples, utilities and real estate stocks suffered.
Adding to the excitement, the Federal Reserve began another quarterly interest rate cut last Thursday. The benchmark rate is now down to around 4.625%. It is now close to the same level it was in December 2007, around the same time that the last global financial crisis began.
Stock market winners and losers
When the market closed on Friday, the top three S&P 500 stocks for the day were Motorola Solutionsincreased by 7.37%, Teslaup 8.19% again Fortinet (NASDAQ: FTNT ), up 9.99%.
The worst performing stock on Friday was the semiconductor giant The Super Micro Computersoftware company ANSYS and a private healthcare company Centene.
With Elon Musk’s vocal support of Trump, it’s no surprise that Tesla enjoyed a huge boost following the election result. The stock is now up 24% since the Republican candidate’s victory was announced early Wednesday.
Trump’s proposed tariffs on imports are likely the main cause of this increase, as China’s low-cost electric vehicles (EVs) threaten Tesla’s market dominance in the US.
There has also been talk of Musk taking part in the new administration.
An eye-catching Fortinet
An outside stock that caught my eye last week was cybersecurity company Fortinet, one of my holdings. The company designs and manufactures firewalls, gateways and endpoint security solutions for both large and small businesses. This provides a high level of protection against online threats such as malware, ransomware, and phishing attacks.
Fortinet’s big jump last week was helped by strong third-quarter earnings released on November 7. It recorded impressive results, with a total score of 83.2% and a performance ratio of 36.1%.
Revenue grew 13% year-on-year, to $1.51bn, driven mainly by a 19% increase in service revenue. Free cash flow came in at $572m.
The company also increased its share buyback program by $1bn, leaving $2.03bn authorized for future share buybacks. Guidance for the full year 2024 has now been raised to between $5.86bn and $5.92bn.
However, Fortinet also offered a cautious outlook on several major deals that will mature by the end of Q4. This may depress wages. In addition, it noted stiff competition from large vendors delivering discounted bundles that could threaten Fortinet’s pricing model.
The cost of goods purchased may also have an impact on the company, although this will depend on the specific goods being targeted and its global supply chain. Rising costs of foreign electronic components would force it to raise prices, reducing its competitive edge. Conversely, the reduction of cheaper solutions from foreign competitors may improve its market share in the area.
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