MARKET REPORT
America is now unburdened by what has been
Connery, Med.
“Money is a terrible master but an excellent servant.”
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:
– ADP Employment Disappoints, US Manufacturing Sees Biggest Job Losses Since June 2023
– After surging 233k higher in October (biggest jump since July 2023), expectations were for a slowdown in job additions in November to +150k. Both results disappointed with October’s surge revised down to just +184k and November’s print missing expectations at +146k
– ISM Services Sentiment Slumps In November; Prices Up, Orders Down
– S&P Global US Services PMI rose from 55.0 (Oct) to 56.1 (Nov final) – fastest expansion since March 2022
– ISM Services PMI tumbles from 56.0 (Oct) to 52.1 (Nov) – the biggest drop since June
– Crude -5.07mm – biggest draw since August
– Distillates +3.38mm – biggest build since July
– Powell reiterated that the central bank is not in rush to lower interest rates, emphasizing that the US economy remains solid but continues to face inflationary pressures.
– Powell reaffirmed the resilience of the US economy, citing stronger-than-expected growth and a robust labor market amid persistent inflationary pressures. Powell underscored the Fed’s focus on steering monetary policy toward neutral levels
– Following rate reductions in September and November, market odds for a December quarter-point cut rose to 75.5% from 66.5%
– Factory Orders in line
– Disappointing Australian GDP (Q3)
– Better-than-expected China Services PMI
– Mixed EU PMIs: Germany misses, France & EZ beat
COMPANIES
– Footlocker -9% after lowering full year guidance
– GM To Take More Than $5 Billion Charge, Close Plants, As Part Of China Restructuring
– Southwest to end DEI practices after lawsuit
– Salesforce surged 11.1% after exceeding revenue forecasts and raising its fiscal-year guidance
– Marvell Technology jumped 23% on strong earnings
– Meta to invest $10B for Louisiana data center
GENERAL:
– French government toppled as PM ousted in no confidence vote
– CEO of United Health Care assassinated in NYC
– S&P & NAS extend records +0.3% and 1.3%
– Euro Bourses close higher
– US economy most resilient of major global growth engines
– President-elect Donald Trump announced Wednesday afternoon that he has selected billionaire entrepreneur and veteran SpaceX astronaut Jared Isaacman to lead the National Aeronautics and Space Administration (NASA)
– Market Implied Fed Rate Cut Pricing: December 19bps (prev. 18bps), January 25bps (prev. 24bps), March 42bps (prev. 40bps)
– Equities up, Treasuries up, Crude down, Dollar flat, Crypto surges (ETH leads) on TRUMP SEC appointment
Ahead:
– Swiss Unemployment, US Challenger Layoffs & Weekly Jobless Claims
Week Ahead:
– OPEC+ Meeting; BoE DMP
Speakers:
– Fed’s Barkin, BoJ’s Nakamura, BoE’s Greene, ECB’s Patsalides
MAJORS:
DX:
– The Dollar ended the US session flat, as GBP, CHF, and EUR upside offset gains against the Yen and Aussie. The DXY was edging higher throughout the European session, yet a very soft ISM Services PMI (Nov) report erased gains.
Regarding Fedspeak, Musalem kept doors open noting he is waiting for the data before the December meeting, Barkin said he cannot ignore the October jobs report, and Powell cannot see the reason why the economy cannot continue being in good shape.
On Thursday, weekly initial claims are due (expected to rise by 2k) as well as Barkin again and International Trade data (Oct)
EUR & GPB:
EUR and GBP were modestly firmer versus the buck. EUR/USD hit highs after the US ISM Services PMI miss as attention turned to the French no-confidence vote. French PM lost the no-confidence voter (331/574 voted in support of no-confidence), which saw marginal upside in EUR/USD (sell the rumour, buy the fact play) although the move was shortlived and it trundled lower thereafter. The next course of action goes to President Macron who is expected to find another PM to form a majority around to deliver fiscal reform. Candidates for the role haven’t been forthcoming as they know they are unlikely to be able to form a working gov’t and pass the necessary fiscal reform; EUR/USD sits marginally above 1.05 heading into APAC trade.
Meanwhile, European Services PMIs were mixed, France and EZ beat, while Germany missed. Separately, ECB’s Vujcic said other ECB officials broadly agree on rates; Nagel said he has no objection now to a rate cut next week, favouring a gradual cautious approach to rate cuts. Elsewhere, Lagarde said growth will be weaker in the short term, with the pace of lowering rates not determined.
The Pound hit lows after BoE’s Bailey said he sees four 25bps rate cuts in 2025, that is, an extra 25bps of rate cuts than what money markets are currently pricing in. As such, GBP weakness followed, sending Cable to lows of 1.2630. That said, the move lower swiftly pared, helped by beats on PMI Services, with gains later extending on the soft US ISM Services report, leaving Cable off highs of 1.2721 into overnight trade, hovering just above 1.2700.
EQUITIES:
EURO:
– DAX: +1.00% at 20,216, FTSE 100: -0.28% at 8,336, CAC 40: +0.66% at 7,303, Euro Stoxx 50: +0.83% at 4,919
US:
– SPX +0.61% at 6,086, NDX +1.24% at 21,492, DJIA +0.69% at 45,014, RUT +0.42% at 2,427
Sectors:
– Energy -2.47%, Materials -0.89%, Financials -0.39%, Real Estate -0.3%, Consumer Staples -0.17%, Health -0.07%, Utilities +0.02%, Industrials +0.44%, Communication Services +0.62%, Consumer Discretionary +1.2%, Technology +1.77%
OIL:
– WTI crude oil futures fell 2% to settle at $68.50 per barrel on Wednesday, reversing some of the gains from a 2.7% rise the previous day, as markets await a pivotal OPEC+ decision on production policy. The alliance is expected to extend existing output cuts through the first quarter of 2025, but analysts emphasize that the tone and details from Thursday’s meeting could significantly sway prices.
Despite the decline, the market received some support from a larger-than-expected drop in U.S. crude inventories, as reported by the Energy Information Administration. Refinery activity ramped up, while gasoline and distillate stockpiles increased.
Geopolitical tensions also contributed to market dynamics, including an unstable ceasefire between Israel and Hezbollah, political unrest in South Korea following a brief martial law declaration, and escalating conflict in Syria, potentially involving oil-producing nations.
BONDS:
YIELD CHANGE
US 1-MO: 4.545 +0.002
US 6-MO: 4.39 -0.03
US 1-YR: 4.235 -0.03
US 5-YR: 4.069 -0.035
US 10-YR: 4.182 -0.039
US 30-YR: 4.348 -0.045
TWO’s/TENS: 0.05 UNCH
CRYPTO
– Bitcoin Nears Record High As Trump Nominates Crypto-Friendly Paul Atkins To Replace Gensler As SEC Chair
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=lV4bgruUW6w
https://www.youtube.com/watch?v=fzKBAxZzFQw
https://www.youtube.com/shorts/9v2znMK8kuk
Song of the day:
https://www.youtube.com/watch?v=k9uIZldl-iE
https://www.youtube.com/watch?v=4QIZE708gJ4
Joke of the Day:
https://www.youtube.com/shorts/xsREirvVSM4
https://www.youtube.com/watch?v=zPggB4MfPnk&t=348s
House of the day:
https://www.francisyork.com/blog/belle-poque-villa-on-the-french-riviera-with-views-over-monaco
(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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