North American News
S&P and NASDAQ close lower
- Dow closes marginally higher
- The NASDAQ index close lower for the fourth consecutive day
- The S&P index closed lower for its fifth consecutive day
- The Dow 30 had a small gain snapping a two day decline
- The Russell 2000 fell for the third consecutive day
The final numbers are showing:
- Dow Industrial Average rose 0.53 points or 0.00% at 33596.86
- S&P index fell -7.48 points or -0.19% at 3933.87
- NASDAQ index fell -56.33 points are -0.53% at 10958.56
- Russell 2000 fell -5.67 points or -0.31% at 1806.90
Some winners today included:
- Beyond Meat +12.39%
- Moderna +3.15%
- PayPal +3.03%
- Stryker +2.77%
- Novavax, +2.62%
- General Mills +2.16%
- PNC financial +2.03%
- Northrop Grumman +1.64%
Big decliners today included:
- AMC -10.44%
- American Airlines -5.44%
- Game Stop -4.79%
- Southwest air lines -4.73%
- Delta Air Lines -4.43%
- United Airlines -4.05%
- Alibaba, -3.37%
- Tesla -3.21%
- Exxon Mobil -2.51%
US October consumer credit outstanding +27.1B vs +28.3B expected
- A look at US consumer credit growth
- Prior was +24.98B
- Revolving +10.1B
- Non-revolving +16.98
US 10-year yields fall to the lowest since mid-September
- What’s the bond market saying?
The strong bid in bonds continued today after a brief respite on Monday.
Many market participants are asking what is behind the buying in fixed income. One theory is that the bond market saw through the latest non-farm payrolls report and instead is viewing the cracks in things like the household survey or the S&P Global US PMI. There’s a healthy debate right now on whether growth or inflation is the bigger risk next year and bonds are saying the inflation has peaked and growth is vulnerable.
Commodities
Gold gain hits 1% today with the China news as a potential game-changer
- China’s central bank bought gold in November
Gold is suddenly shining brightly.
It has run into a tough tape for risk assets this week but the slide in the US dollar and monetary uncertainty have opened a window for outperformance. There’s also a seasonal tailwind for gold that runs through February.
The catalyst for today’s 1% rally is a report from the People’s Bank of China that they added to gold reserves in November for the first time since 2019. Central banks tend to move slowly and deliberately, so this is likely a sign of what’s to come.
They added 32 tons to its total of 1980 tons and it comes as market participants speculate that China, Russia and other countries not friendly with the USA will want convert dollar reserves to bouillon.
“Gold holdings in China as part of the total reserves are still very low, so there is probably room for further purchases down the road,” he said Giovanni Staunovo, an analyst at UBS Group AG.
China bought around $1650/oz compared to $1787 today.
EIA weekly crude oil inventories -5187K vs -3305K expected
- US inventory data
- Prior crude -12580
- Gasoline +5320K vs +2707K exp
- Distillates +6159K vs +2208K exp
- Refinery utilization +0.3% vs +0.1% exp
- The SPR draw last week was 2.1 mb
Late yesterday in the API report:
- Oil -6428K
- Gasoline +5930K
- Distillates +3550K
EU News
European equity close: The grind lower continues
- Closing changes for the main European bourses
- Stoxx 600 -0.5%
- German DAX , -0.5%
- France’s CAC, -0.3%
- UK’s FTSE 100 -0.2%
- Spain’s Ibex -0.4%
- Italy’s FTSE MIB +0.2%
Other News
Bank of Canada hikes rates 50 bps vs 50 bps expected
- Economists expected 50 bps and the market 25 bps
Ahead of the decision, the OIS market was pricing in a 62% chance of a 25 bps hike while economists narrowly favored a 50 bps hike.
- Prior rate was 3.75%
- Prior statement said “the Governing Council expects that the policy interest rate will need to rise further” but this has been dropped
- “Governing Council will be considering whether the policy interest rate needs to rise further to bring supply and demand back into balance and return inflation to target”
- There is growing evidence that tighter monetary policy is restraining domestic demand
- Overall, the data since the October MPR support the Bank’s outlook that growth will essentially stall through the end of this year and the first half of next year.
- We are resolute in our commitment to achieving the 2% inflation target and restoring price stability for Canadians.
- Inflation is still too high and short-term inflation expectations remain elevated
- In Canada, GDP growth in the third quarter was stronger than expected, and the economy continued to operate in excess demand. Canada’s labour market remains tight, with unemployment near historic lows
- There’s no press conference today but the BOC’s Kozicki speaks tomorrow at 12:45 pm ET
Cryptocurrency News
Solana price is done for as another hedge fund defaults on FTX exposure
- Solana price tanks over 5% as an unnamed hedge fund cannot repay crypto loans on the back of FTX collapse.
- SOL dips back toward a crucial line in the sand that could hold but at slim odds.
- Expect another drop lower, flirting with $10 as traders step away again.
Solana (SOL) price is tanking again after what could have been a very silent breakout after it trashed the red descending trend line on Tuesday. The drop comes as an unnamed hedge fund defaults on tens of millions of US Dollars worth of crypto loans, on top of several banks and financial institutions confirming that massive layoffs are set to kick in and much lower than expected bonuses will be paid out. With the holiday season just before the door, it looks like it will be a grim Christmas dinner for many.
Ripple price turns as US Dollar surprises with sudden strength
- Ripple price slid over 3% in the European trading session after the disappointing ASIA PAC session.
- XRP gets grilled after US Dollar strength returns, causing massive market headwinds.
- Expect to see pressure building on $0.3710 for a possible break lower.
Ripple (XRP) price is on the back foot again after what should have been the moment every trader was waiting for this year: the Christmas rally. Instead, the rally chokes as its worst enemy is back at it – the US Dollar’s strength.
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