TODAY’S GAME PLAN: from the trading
desk, this is not research
TODAY’S ECONOMIC DATA:
Highlights and News:
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Israel breached its cease-fire agreement with Hezbollah several times in the first two days, Lebanon’s army said
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Putin signs bill recognizing Bitcoin as property in Russia
World markets inch higher as trading was relatively muted after the US markets closed for the Thanksgiving holiday. Some investors are recalibrating their expectations
for US inflation and future Federal Reserve interest-rate cuts following data released earlier in the week. Euro-area inflation climbed, with consumer prices rising 2.3% y-o-y, up from 2% in October. Closely watched core inflation, held steady. Speculation
that authorities in China will release further stimulus is growing ahead of the Central Economic Work Conference, where the nation’s top leaders will lay out economic priorities for the coming year.
EQUITIES:
US equity futures are pointing to modest gains in today’s shortened, post-holiday trading session. The S&P 500 has already risen 5% in November, on course for its best month since February
as investors plowed $141 billion into US equities, the heaviest inflows for a four-week period on record, according to EPFR Global data. US semiconductor equipment makers rise in pre-market trading after Bloomberg reported that additional US curbs on sales
of chip technology to China may stop short of some stricter measures previously considered.
Futures ahead of the bell: E-Mini S&P +0.2%, Nasdaq +0.2%, Russell 2000 +0.7%, DJI +0.2%.
In pre-market trading, Applied Therapeutics (APLT) shares sink 75% after the biopharmaceutical company’s new drug application for govorestat for the treatment of galactosemia was rejected
by the US Food and Drug Administration. Microsoft (MSFT) shares are down 0.4% after the US Federal Trade Commission opened an antitrust investigation into the software giant.
European gauges are little changed as investors awaited fresh catalysts amid concerns over trade tariffs and ongoing political instability in France, where the government
is struggling to pass its budget. The Stoxx 600 is flat as losses in telecommunication and personal care stocks offset gains in miners and real estate. Miners benefited from rising iron ore prices due to hopes for increased Chinese stimulus. Deal-making news
continued to drive moves among individual stocks. Shares in Direct Line Insurance Group Plc rose for a second day following a Financial Times report that Aviva Plc has begun to reach out directly to shareholders of the insurer. Delivery Hero SE shares fell
after the food delivery firm set the price for its Middle Eastern unit’s initial public offering at the top of the range. Stoxx 600 -0.1%, DAX +0.2%, CAC +0.05%, FTSE 100 -0.2%.
Shares in Asia edged higher as gauges in China rallied on expectations of greater economic support at a key policy meeting in December. The MSCI Asia Pacific Index
rose as much as 0.6%. While Chinese stocks gained, South Korea’s Kospi Index fell by 2% following an unexpected interest rate cut from the central bank, raising concerns over economic growth. Japanese markets also declined as the yen strengthened due to stronger-than-expected
inflation data, which heightened speculation about potential rate hikes by the Bank of Japan. CSI 300 +1.1%, Sensex +1%, Vietnam +0.7%, Hang Seng Index +0.3%, ASX 200 -0.1%, Taiwan -0.2%, Topix -0.2%, Philippines -0.4%, Kospi -1.95%.
FIXED INCOME:
Treasuries opened higher in a shortened US trading session ahead of month-end index rebalancing. As markets resumed after the Thanksgiving holiday, yields fell across
the curve, with the 10-year yield dropping to 4.20%, marking weekly lows for 5- to 30-year bonds. French bonds steadied as far-right leader Marine Le Pen gave PM Michel Barnier until Monday to accede to her budget demands before she decides whether to topple
the government.
METALS:
Gold rose, as the dollar and treasury yields weakened following the US Thanksgiving holiday. There are expectations the precious metal could benefit from a Santa
rally, as its price has risen in December for the past seven years. Spot gold +0.9%, Silver +1.7%, Copper -0.1%.
ENERGY:
Oil prices edged higher in thin trading as traders awaited further indications from OPEC+ regarding its production plans, following the group’s decision to postpone
a key meeting to December 5. Brent crude was trading near $73 a barrel, while WTI for January delivery fell to $68.36. The delay comes as OPEC+ considers whether to revive curtailed production amid a projected supply glut next year, with discussions already
indicating a potential further postponement of output increases. Trading volumes were lower due to the Thanksgiving holiday in the U.S., with market participants concerned about fluctuating demand, particularly from China, and geopolitical tensions that may
influence future supply dynamics. WTI +0.8%, Brent +0.2%, US Nat Gas +3.8%, RBOB +0.8%.
CURRENCIES:
In currency markets, the dollar stayed under pressure amid month-end flows and lower US yields while the yen rallied past the 150 handle for the first time in five
weeks. The yen surged as much as 1.2% against the dollar after Tokyo inflation accelerates more than expected, fueling December BOJ rate hike speculation. The euro held a modest gain after euro-area inflation climbed above the European Central Bank’s 2% target,
but by a margin that was seen as too small to derail the path of policymakers to lower rates. Consumer prices rose 2.3% from a year ago in November, up from 2% in October. US$ Index -0.05%, GBPUSD -0.02%, EURUSD +0.02%, USDJPY -1%, AUDUSD +0.03%, NZDUSD +0.4%,
USDCHF -0.25%, USDNOK +0.3%.
Spot Bitcoin +0.6%, Spot Ethereum +1%.
Colors within the report:
Green is always the 200 period (day, week).
Red is always 21,
Blue = 50,
Brown =
100 *Stars have added importance
PRE-MARKET MOVER
Upside:
-SILO +18% (enters Joint Development Agreement with Kymanox for SP-26 Ketamine Implant Device Targeting Pain Management) VOL 5.8M
-VYGR +7.3% (hearing Wedbush, Inc. Assumed VYGR with Outperform, price target: $11) VOL 24K
-MSTR +4.1% (traders circulate unverified chatter that NASDAQ 100 reconstitution on Nov 29th may include MicroStrategy) VOL 1.3M
-LRCX +2.8% (financial press report claims Biden Administration crackdown on semiconductor sales to China may be less severe than forecast) VOL 121K
-HOOD +2.4% (momentum) VOL 370K
-AMAT +2.3% (financial press report claims Biden Administration crackdown on semiconductor sales to China may be less severe than forecast) VOL 298K
Downside:
-APLT -75% (FDA completed its review for Govorestat, and was unable to approve the NDA in its current form, citing deficiencies in the clinical application) VOL 7.7M
-XP -8.5% (broad Brazil weakness following President Lula spending cuts) VOL 341K
-STNE -6.2% (broad Brazil weakness following President Lula spending cuts; reportedly unimpressed by nonbinding offers for Linx) VOL 241K
-NU -5.2% (broad Brazil weakness following President Lula spending cuts) VOL 1.6M
-EWZ -4.9% (broad Brazil weakness following President Lula spending cuts) VOL 2M
-PAGS -3.2% (broad Brazil weakness following President Lula spending cuts) VOL 69K
Data sources: Bloomberg, Reuters, CQG
David Wienke
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