MARKET REPORT
America is now unburdened by what has been
Villa Ramatuelle (12.5m E)
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:
– JOLTS above expectations
– Headline JOLTS rose to 7.744mln, up from the prior 7.372mln, which was revised down from 7.443mln, above the expected 7.475mln but within the forecast range of 7.2-7.9mln
– Fed’s Kugler, Daly, Goolsbee keep options open
COMPANIES
– AMZN announces slew of AI updates
– MSFT AI software sales & OpenAI deal targeted in FTC probe
– Tesla’s China Sales Fall 4.3% In November As BYD Sales Surge
– Stoli Vodka files for bankruptcy
GENERAL:
– South Korean President imposes martial law, then reverses decision
– China bans export of “Dual-use items” to US
– US imposes Iran sanctions
– Israel/Hezbollah tensions rise
– Barnier to face no-confidence vote on Wednesday, Macron will not resign before his mandate ends in 2027
– Market Implied Fed Rate Cut Pricing: December 18bps (prev. 19bps), January 24bps (prev. 23bps), March 40bps (prev. 37bps)
– Equities mixed, Treasuries steepen, Crude up, Dollar flat
Ahead:
– Australian GDP (Q3), US ADP, ISM Services PMI & Factory Orders, Fed Discount Rate Minutes
Week Ahead:
– Fed Discount Rate Minutes; French Government no-confidence motion
Speakers:
– RBNZ’s Orr, BoE’s Bailey, Fed’s Powell, Musalem; ECB’s Lagarde, Cipollone
MAJORS:
DX:
– Fed’s Waller’s remarks late on Monday, (leaning towards a cut in December meeting) sparked gains in T-Notes, specifically in the 2yr, likely allowing the buck to take a breather. Gains in treasuries extended on South Korea’s President enacting martial law, albeit, modest moves were soon in the buck, with DXY slipping modestly.
Concerning JOLTS, October’s figure was 7.475mln, above the expected 7.44mln, jumping from a downwardly revised Sept figure of 7.372mln, paving the way for a bounce in the Dollar, although, limited.
Fed’s Daly said a December rate cut is absolutely not off the table (MM price 70% chance of 25bps cut), and believes the neutral rate is closer to 3% (Fed’s Median is 2.9%). Meanwhile, Kugler said October’s PCE inflation showed the job is not yet done on the 2% goal.
Next is ADP (exp 150k prev. 233k), Factory Orders (Oct, exp. 0.2%), ISM Services PMI (exp. 55.5, prev. 56); Fed’s Chair Powell, Fed Discount Rate minutes and Beige book.
EQUITIES:
EURO:
– DAX: +0.51% at 20,035, FTSE 100: +0.56% at 8,359, CAC 40: +0.26% at 7,255, Euro Stoxx 50: +0.64% at 4,878
US:
– SPX +0.05% at 6,050, NDX +0.31% at 21,229, DJIA -0.17% at 44,706, RUT -0.73% at 2,416
Sectors:
– Utilities -0.88%, Financials -0.75%, Industrials -0.65%, Real Estate -0.61%, Consumer Staples -0.46%, Materials -0.33%, Health -0.19%, Energy -0.05%, Consumer Discretionary +0.13%, Technology +0.56%, Communication Services +1.12%
OIL:
– WTI (F5) SETTLED USD 1.84 HIGHER AT 69.94/BBL; BRENT (F5) SETTLED USD 1.79 HIGHER AT USD 73.62/BBL
The crude complex saw gains as it was buoyed by numerous bullish factors such as concerns surrounding Israel/Hezbollah truce, expectations of OPEC+ extending supply cuts, refinery outages and fresh Iranian sanctions. Throughout the US session WTI and Brent saw gains to settle around highs, after seeing earlier lows of 67.91/bbl and 71.68/bbl in the EZ morning.
Newsflow was supportive as Bloomberg source reports noted that OPEC+ is firming up a deal for a 3-month output hike delay, while in the Middle East Lebanon’s ceasefire is looking increasingly tense with Israeli PM Netanyahu pledging a strong response after Hezbollah violations.
Upside was also observed after the US Treasury announced it is imposing sanctions on 35 entities and vessels that play a critical role in transporting illicit Iranian petroleum to foreign markets. Regarding refineries, Iraq halted operations at Basra (280k BPD) and Exxon’s Joliet refinery (275k BPD) reported a unit upset. Ahead, private inventory data after-hours is the next risk event whereby current expectations are (bbls): Crude -0.7mln, Distillate +0.9mln, Gasoline +0.6mln.
Bank commentary: JPMorgan said Brent crude oil price is projected to average USD 80/bbl in 2024, and added “our price forecast calls for Brent oil to average USD 61/bbl, with WTI at USD 57/bbl in 2026”. Separately, Bank of America stated a looming surplus of 0.8mln BPD should result in Brent and WTI prices averaging just USD 65/bbl and USD 61/bbl in 2025, respectively, while downside risks include a trade war or an OPEC+ price war and upside risks come from the Middle East and Russia/Ukraine. Report courtesy of newsquawk.
CRYPTO
– For the first time since its approval, Ethereum exchange-traded funds (ETFs) have recorded monthly inflows surpassing $1 billion, signaling a significant rise in institutional interest. This milestone coincides with ETH’s price climbing to $3,700, raising expectations for further gains in the near future.
– In September, Ethereum ETFs faced a tough month with net outflows of -22,678 ETH, indicating weak investor demand. However, October saw a dramatic rebound, with 218,878 ETH in inflows, showing a surge in investor interest.
November continued the positive momentum, with Glassnode reporting a significant jump to 288,733 Ethereum ETF monthly inflows — the highest since the ETF’s approval in July. With ETH trading above $3,700, this surge translates to a remarkable $1.06 billion, marking a key milestone for the altcoin.
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/shorts/3RRp5tBTyuE
https://www.youtube.com/watch?v=_23hZhc3DlA
https://www.youtube.com/watch?v=4013hHZHf0I
Song of the day:
https://www.youtube.com/watch?v=Rk_sAHh9s08
https://www.youtube.com/watch?v=sJT3vIMsCQo
Joke of the Day:
https://www.youtube.com/watch?v=r2u4Z9jCC04
https://www.youtube.com/watch?v=JFyDj7dRlmM&t=10s
House of the day:
https://www.youtube.com/watch?v=_uSe2oR1DgY&sttick=0
(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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