MARKET REPORT
Review:
– Steve McClurg, co-founder and chief investment officer of Valkyrie Funds, has suggested the potential approval of Ethereum or XRP exchange-traded funds (ETFs) following the expected launch of spot Bitcoin ETFs in a recent Bloomberg interview. ETHEREUM SURGES +10%
– Oil falls as Stockpiles override Houthi shipping attacks
– Treasury 10yr yield above 4%
– Federal Reserve Bank of New York President John Williams: “DON’T SEEM CLOSE TO POINT OF SLOWING ASSET RUNOFF” & “NEED TO MAINTAIN RESTRICTIVE STANCE FOR SOME TIME”
– ECB Schnabel says it is too early to discuss rate cuts
– Soft Japan wages smoke YEN. Falls 1% against the Dollar
– Fed pricing is little changed, with 140bps of cuts priced for 2024 and a March implied cut still at 70%
DOLLAR closed up small:
– AUD up small: 66.95 +0.2% (67.13 – 66.95) close off bottom rge
– EUR down: 91.17 -0.33% (91.52 – 91.11) close off bottom rge
– GPB up smalls: 127.34 +0.2% (126.87 – 127.44) close off top rge
– JPY up: 145.77 +0.96% (144.66 – 145.79) close top rge
GOLD down smalls: $2027 -0.75% (2025 – 2043) close mid to lower rge
DOW/ES/ND: 37868 +0.28%, 4817 +0.5%, 16931 +0.63%
CRYPTO: BTC/ETH: -800/-1.7% 45934, +235/+10.4% 2494
CRUDE: $71.31 -0.93/-1.29%
Upcoming:
– US CPI!
– US Philly Fed Manufacturing Business Survey
– AU Trade Balance
– JAP Leading Indicator
MAJORS:
DX:
Traders await Dec CPI report (due Thursday) with little major US data released today. The highlight was Fed’s Williams in late trade noted he expects the Fed to maintain a restrictive stance of policy for some time. Weaker Jap wage data pushed the Dollar up 1% against the Yen. Index had a 102.36 – 102.06 Rge closing on off lows.
No call pre CPI.
1-
AUD:
Point of note weighted CPI for November eased more than expected to 4.3% from 4.9% (exp. 4.4%), this was the only point of note in an otherwise quiet session. Trade Data out today. US CPI tom morning to determine direction.
No call pre CPI.
6-
EUR:
ECB speak:
– De Guindos warning the rapid pace of disinflation seen in 2023 is likely to slow down in 2024, and to pause temporarily at the start of the year.
– Schnabel said financial conditions have loosened more than projected and it is too early to discuss rate cuts.
No call pre CPI.
9-
POUND:
At the UK Treasury Select Hearing:
– BoE Governor Bailey stressed the importance of returning inflation to target
– Breeden said the risk environment feels particularly challenging at the moment.
No call pre CPI
12-
YEN:
Japanese wages for November were much softer than expected, rising just 0.2% (exp. 1.5%, prev. 1.5%), adding support for the BoJ to keep rates on hold despite building expectations of an exit of Negative Interest Rate Policy (NIRP). Pushed Yen up 1% to 145.62 just off an 145.80 high.
No call pre CPI.
14-
GOLD & SILVER:
Gold nearing 2020 which is support BUT, CPI.
Quiet session, 2045 down to 2026, closing off lows.
Silver quiet with a 23.25 to 22.95 range closing mid range 23.10
No call pre CPI.
EQUITIES:
US:
– SPX +0.57% 4,783
– NDX +0.69% 16,793
– DJI +0.45% 37,696
– RUT +0.11% 1,970
EUR:
– DAX +0.01% 16,689.81
– FTSE 100 -0.42% 7,651.76
– CAC 40 -0.01% 7,426.08
– Euro Stoxx 50 +0.01% 4,467.55
SECTORS (W to S): Energy -1.01%, Materials -0.17%, Consumer Staples -0.13%, Utilities -0.06%, Real Estate +0.13%, Financials +0.2%, Health +0.42%, Industrials +0.48%, Consumer Discretionary +0.98%, Technology +1%, Communication Services +1.17%
– Sony +4%: Sony unit continues merger talks with India’s Zee Entertainment
– Meta +3.5%: Mizuho raised PT to USD 470/shr (prev. USD 400)
– Boeing +1%: In his first remarks since the ALK accident, CEO said it has to acknowledge its mistake, indicating a misstep by the aircraft maker played a role.
– Apple +0.6%: Downgraded at Redburn Atlantic.
– Home Depot +3% Upgraded at Wedbush
– Virgin Galactic +1%: Upgraded at Truist
– Etsy -3%: Downgraded at Goldman; projects a weak backdrop as consumer discretionary spending tightens.
– Amazon +1.5%: Laying off several hundred employees in its Prime Video and Amazon MGM Studios, according to The Information. Earlier, AMZN’s livestreaming platform Twitch is reportedly set to reduce its workforce by 35% (around 500 jobs).
– Chewy -6%: Announced a block sale of 12.3mln shares through MS; being resold at USD 20.45/shr.
OIL:
WTI (G4) SETTLES USD 0.87 LOWER AT 71.37/BBL; BRENT (H4) SETTLES USD 0.79 LOWER AT 76.80/BBL
Oil prices were ultimately lower on Wednesday after chunky builds were reported in the US energy inventory data, with ongoing Middle East tensions in the background. WTI and Brent contracts had been choppy during European trade, with a bout of weakness in the morning reversing in the afternoon to see contracts peak for the session at USD 73.59/bbl and 78.73/bbl, respectively, with desks pointing to the unrest in the Red Sea. That explanation was juxtaposed with fresh commentary from energy trader Vitol who said oil is not reacting to Middle East risk as there is no real disruption, saying that the oil market remains fundamentally balanced. The oil upside all unwound into the NY afternoon after the EIA reported crude stock building 1.3mln bbls in the latest week, but also another chunky build in the products with stocks across distillates and gasoline rising a net 14.5mln bbls, well above analyst estimates, and despite a decline in refinery utilisation.
Oil report courtesy of zerohedge.com
BOND YIELDS:
US 1-MO 5.378 -0.009 US 6-MO 5.258 -0.003 US 1-YR 4.832 -0.011 US 5-YR 3.973 -0.004 US 10-YR 4.03 +0.013 US 30-YR 4.206 +0.022
CRYPTO
With Bitcoin gaining SEC approval for Spot ETF’s speculation turned to future Ethereum or XRP next up say ETH SURGE up 10$ within sneezing distance of $2500. Throughout Dec I was calling for 50k in BTC and 2500 in ETH.
With BTC DOWN 2% today and ETH UP 10% this erased ETH’s underperformance relative to BTC.
No call on direction.
Best of luck out there. Let the market come to you
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