MARKET REPORT
America is now unburdened by what has been
Tahoe, $60m. USD.
You were found in clear conditions. But you’re handsome in the fog.
“Voters seem to forget when politicians ‘give’ you money, it is the voters’ money they have already taken.”
Day in Review:
Today:
DATA:
– Home prices in America’s 20 largest cities rose (again) in September (the latest data from S&P CoreLogic’s Case Shiller index) but at a slower pace than expected (+0.18% MoM vs +0.3% exp vs +0.33% prior):
– New Home Sales collapsed 17.3% MoM in October. That is the largest MoM drop since July 2013
All the revisions are lower
– US Consumer Confidence beats expectations
– FOMC minutes:
– “Many” members suddenly favor more gradual rate-cutting-cycle
– Some say Fed could pause easing and hold rates at restrictive levels if inflation remains elevated
– Many said uncertainty over the neutral rate level makes it appropriate to reduce restraint gradually
– Some said easing could be accelerated if labor market weakened or activity faltered
– Some judged downside risks to jobs market and economy had diminished
– Participants anticipated it would be appropriate to move gradually towards a more neutral stance
– Almost all agreed that risks to achieving dual mandate goals remain roughly in balance
– Some said it might be appropriate in the future to consider setting the overnight reverse repo rate to the bottom of the Fed Funds Rate target
– Many saw excessive cooling in the jobs market as having diminished somewhat since September
– Fed staff forecast called for economic conditions to remain solid, as in its previous assessment: 2024 GDP growth projection seen higher
COMPANIES
– Intel Awarded Nearly $8 Billion For US Chip Factories
– Biden gives Rivian $6B lifeline
GENERAL:
– Israel cabinet approves ceasefire deal with Lebanon
– Trump to tariff on all products coming in from China, Mexico, and Canada, crude is not exempt on Canadian and Mexican import
– Strong US 5YR note auction
– OPEC+ is reportedly beginning talks on delaying an oil production restart again
– Equities mixed, Treasuries mixed, Crude down, Dollar down
– Market Implied Fed Rate Cut Pricing: December 15bps (prev. 13bps), January 20bps (prev. 19bps), March 33bps (prev. 33bps).
Ahead:
– Australia CPI (Oct), US PCE (Oct), PCE Prices Prelim (Q3), Initial Jobless Claims (23 Nov, w/e), Durable Goods (Oct), GDP 2nd Estimate (Q3), Advance Goods Trade Balance (Oct), German GfK Consumer Sentiment (Dec)
Week Ahead:
– Thurs Thanksgiving, Friday Black Friday
Speakers:
– ECB’s Lane
MAJORS:
DX:
– The dollar index headed lower on Tuesday, despite gaining versus the majority of major peers, as Yen’s strength offset any potential upside.
The highlight came via Truth Social, where the President-elect continues a pro-tariff agenda, namely, planning to raise tariffs on products from China, Mexico, and Canada, causing weakness in the high-beta FX.
FOMC Minutes were a non-event, with uncertainty remaining over the next Fed rate decision in December. The Minutes suggested most participants view employment and inflation risks as balanced, emphasising gradual easing towards a neutral stance due to the uncertainty about the neutral rate. Upcoming employment and CPI data will be crucial to determining the next policy announcement, with Fed pricing currently discounting a ~ 58% chance of a 25bps rate cut.
US Consumer Confidence increased more than forecasts in November driven by growing optimism surrounding the labour market, the Richmond Fed Comp Index remained sluggish at -14, and New Home Sales Units dropped more than expected, below the low end of forecasts.
Wednesday is a busy one for the US, with Core PCE (Oct), Initial Claims, GDP 2nd Est (Q3), and Durable Goods (Oct) ahead.
EQUITIES:
EUR:
– DAX: -0.52% at 19,305, FTSE 100: -0.40% at 8,259, CAC 40: -0.87% at 7,195, Euro Stoxx 50: -0.79% at 4,762
US:
– SPX +0.57% at 6,022, NDX +0.57% at 20,923, DJIA +0.28% at 44,861, RUT -0.73% at 2,424
Sectors:
– Materials -0.67%, Energy -0.23%, Industrials +0.15%, Financials +0.21%, Health +0.45%, Real Estate +0.53%, Consumer Staples +0.65%, Technology +0.80%, Communication Services +0.81%, Consumer Discretionary +0.90%, Utilities +1.56%
BONDS:
YIELD CHANGE
US 1-MO: 4.639 +0.004
US 6-MO: 4.485 -0.008
US 1-YR: 4.378 -0.005
US 5-YR: 4.183 +0.011
US 10-YR: 4.295 +0.032
US 30-YR: 4.466 +0.019
TWO’s/TENS: 0.05 +0.04
KEEP DOING WHATS WORKING, STOP WHAT ISNT
Best of luck out there.
Let the market come to you
Post of the day:
https://www.youtube.com/watch?v=weZLwY_k6SY
https://www.youtube.com/watch?v=msKubf4fE8E
https://www.youtube.com/watch?v=YI3tsmFsrOg
Song of the day:
https://www.youtube.com/watch?v=bdVohQNmTAk&list=RDMMbdVohQNmTAk&index=31
Joke of the Day:
https://www.youtube.com/shorts/Qn-7IXZwEvE?sttick=0
https://www.youtube.com/watch?v=opqtrB6hTjk
House of the day:
https://www.youtube.com/watch?v=laxK_3rKRHk
(Seize all assets of Duke and Duke enterprises)
I can be contacted should anyone have any questions, input at [email protected] during US hours of EST 9am until 5pm
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