North American News
US major indices close lower for the 2nd consecutive day
- But declines are well off lows
The major stock indices in the US are closing lower for the 2nd consecutive day. However, things could have been worse. The indices are closing well off their intraday lows.
At the bell, the final numbers are showing:
- Dow down -7.53 points or -0.03% at 33546.31
- S&P down -12.24 points or -0.31% at 3946.55
- Nasdaq down -38.68 points or -0.35% at 11144.97
- Russell 2000 down -14.04 points ro -0.76% at 1839.12
Looking at the Dow 30, the biggest gainers were:
- Cisco, +4.96%
- Merck, +2.4%
- Apple +1.3%
- Amgen, +1.24%
- Intel, +1.22%
The biggest losers were:
- Salesforce, -3.43%
- Disney, -2.57%
- American Express, -1.24%
- Home depot, -1.06%
- Caterpillar, -0.93%
Looking other big winners today:
- Alibaba +7.91%
- First Solar +4.04%
- Northrup Grumman +2.75%
- Corsair, +2.62%
- GameStop, +2.25%
- Qualcomm +1.76%
Big losers today included:
- Roblox, -5.38%
- Airbnb -4.91%
- Snowflake, -4.09%
- Uber, -3.81%
- Rivian, -3.75%
- Papa Johns, -3.61%
- Netflix, -3.54%
Atlanta Fed GDPNow 4.2% vs 4.4% previously
- The latest GDP tracker from the Atlanta Fed
It will be months before we get Q4 GDP data but the tracking model from the Atlanta Fed continues to point to strong growth, though down to 4.2% from 4.4%.
“After this morning’s housing starts report from the US Census Bureau, the nowcast of fourth-quarter real residential investment growth decreased from -7.6 percent to -11.7 percent,” the latest release said.
KC Fed manufacturing index -10 vs -22 prior
- Manufacturing and composite survey from the KC Fed
- Production -10 vs -22 prior
- Composite -6 vs -7 prior
- Prices paid +22
- Prices received +19
Pelosi will remain as a Congress member but will not run for Democratic leader
- Steps down from party leader
Congresswoman Nancy Pelosi will step down as party leader for the Democratic. She will remain as a member of Congress.
The representative from San Francisco was the most recent speaker of the house. However, the Democrats lost control on the House to the GOP in the most recent mid term elections. Kevin McCarthy – also from California – will likely be the new Speaker of the House (although that is still to be determined).
Commodities
Gold creeps lower toward $1750s on Fed hawkish remarks
- Hawkish commentary by Federal Reserve officials undermines Gold Prices.
- Unemployment claims in the United States diminished compared to last week’s data.
- The US housing market continues to deteriorate as the Federal Reserve aggressively tightens.
- Gold sliding below $1753 would pave the way toward the 100-DMA.
Gold Price drops, eyeing a test of the weekly lows around $1753, following hawkish Federal Reserve (Fed) commentary, amidst a tranche of United States (US) economic data released that underpinned the US Dollar (USD). Also, a jump in US Treasury bond yields weighed on the yellow metal. At the time of writing, XAUUSD is trading at $1759.40, below its opening price by 0.80%, after hitting a daily high of $1774.81.
Federal Reserve’s hawkish commentary undermined XAUUSD
Sentiment shifted sour as Fed policymakers emphasized the need to tackle inflation, led by the St. Louis Fed President James Bullard. Bullard said, “Even under these generous assumptions, the policy rate is not yet in a zone that may be considered sufficiently restrictive.” In his presentation, he showed charts that showed rates might be “sufficiently restrictive” at around 5% to 7% and called his colleagues to raise rates further if they’re to achieve the Fed’s 2% goal.
US Initial Jobless Claims retraced
Data-wise, a busy economic calendar in the United States would entertain Gold traders, led by unemployment claims and housing data. Initial Jobless Claims for the week ended on November 12 dropped 222K, below estimates of 225K and the previous week’s 226K. Contrarily Continuing Claims rose 13K, to 1.51 million, in the week ended on November 5, increasing for the fifth straight week, an uptrend signing that Americans are out of work for longer.
The US housing market continues to cool down
In the housing market segment, Housing Starts for October tumbled, shrinking 4.2% below September’s 1.3% contraction, as further interest-rate hikes by the Fed keep pouring cold water into an already battered housing market. Building Permits decreased by 2.4%, while the previous month’s data was upward reviewed to a 1.4% increase.
The US Dollar Index, a gauge of the buck’s value against a basket of peers, remains above its opening price by 0.62%, at 106.948, snapping two days of consecutive losses. The US 10-year Treasury bond yield, a headwind for the non-yielding metal, jumps nine bps, at 3.781%, after hitting a weekly low of 3.671%.
WTI crude oil settles sharply lower on the day
- Down $3.95 or $4.62% at $81.64
The price of WTI crude oil is settling down -$3.95 or -4.62% at $81.64. The price settled at $85.59 yesterday.
The move to the downside today was helped by expectations of lower demand for China as a result of another spike higher in Covid cases. A stronger USD also helped contribute to the decline, as did less tension after the missile strike in Poland was refuted and believed to friendly fire from Ukraine defenses.
EU News
German Dax closes higher. Other European indices close lower
- Mixed closes for the major European indices
The German Dax is the only major European indice which is closing higher on the day. Looking at the closing levels:
- German Dax, +0.23%
- France’s Cac -0.47%
- UK FTSE 100, -0.06%
- Spain’s Ibex -0.75%
- Italy’s FTSE MIB -0.81%
Fed’s Mester: Gilt event is a cautionary tale about unforseen risks around hiking rates
- Comments from Mester
The gilt market is an interesting one today as we see some compression in the curve on a long-end led bull flattener. UK 2s appear to have found a floor at 3% while 10s dive towards the same level. What struck me about today’s UK budget was that even with all the tax hikes and austerity, it only lowers UK debt to GDP by a tiny fraction over the forecast horizon.
Other News
Fed’s Bullard: Any signs of disinflation are ‘tentative at best’ but he’s hopeful for 2023
- Comments from the St Louis Fed President
- Leaving it up to Chair Powell on how large rate hikes should be at any given meeting, steps don’t matter on a macro level
- In terms of how long to stay high, can moderate based on incoming data
- A minimum level for restrictive policy would be 5-5.25%
- Once disinflation begins, it could proceed rapidly as businesses compete
- Recent retail sales data suggests household spending cushion remains
- October inflation data encouraging but could easily go the other way next month
- Not seeing much cooling in labor market
- Fed will want to err on the side of keep rates higher for longer
Fed’s Kashkari: Inflation is not wage-driven
- Comments from the Minneapolis Fed President
- US economy is sending wildly mixed signals
- This inflation is from demand, not constrained supply
- We are united in commitment to getting inflation to 2%
- There is a lot of tightening in the pipeline
- Fed’s job is to keep inflation in check
We’ve heard from Kashkari and Bullard today. Those two are on opposite ends of the hawk/dove spectrum and there isn’t much daylight between them. Kashkari is a voter next year.
Cryptocurrency News
Can Binance Coin price prevent an 8% crash after securing FSP license in Abu Dhabi?
- Binance Coin price is in a downtrend, heading toward its immediate support of $260.
- The crypto exchange received its Financial Services Permission (FSP) license on November 16 to offer crypto services in Abu Dhabi.
- If the bullish outlook sticks, Binance Coin would be testing its immediate resistance at $280.
Binance Coin price initially enjoyed bullishness from its possible acquisition of FTX. However, as the talks broke down, BNB, along with the rest of the crypto market, crashed. The exchange token now needs a solid push which could be achieved if buying pressure increases, though the outlook looks rather bleak at the moment.
Join Our Whats App Group for all the latest stock market news
https://chat.whatsapp.com/KuCI3obDFfz7J6QI8tK1fX
