North American News
US stocks close near the highs for the day
- Recover from earlier losses
The major US indices are closing the day higher and near highs for the day.
The markets will be closed on Monday in observance of Boxing Day/Christmas (one day later).
The final numbers for the day are showing:
- Dow industrial average rose 176.42 points or 0.53% at 33203.92
- S&P index rose 22.43 points or 0.59% at 3844.81
- NASDAQ index rose 21.75 points or 0.21% at 10497.87
- Russell 2000 rose 6.845 points or 0.39% at 1760.93
For the trading week:
- Dow Industrial Average rose 0.86%
- S&P index fell -0.20%
- NASDAQ index fell -2.45%
- Russell 2000 fell -0.14%
With one week left of trading, the numbers for 2022 are showing:
- Dow Industrial Average down -8.63%
- S&P index down -19.33%
- NASDAQ index down -32.90%
- Russell 2000 down -21.57%
US November PCE core inflation +4.7% vs +4.7% expected
- Highlights of the Fed’s personal consumption expenditure report for November e2022
- Prior was +5.0%
- PCE core MoM +0.2% vs +0.2% expected
- Prior MoM +0.2%
- Headline PCE +5.5% vs +6.0% prior (revised to 6.1%)
- Deflator MoM +0.1% vs +0.3% prior
Consumer spending and income for November:
- Personal income +0.4% vs +0.3% expected. Prior month +0.7%
- Personal spending +0.1% vs +0.2% expected. Prior month +0.8% (revised to +0.9%)
- Real personal spending +0.0% vs +0.5% prior
Michigan consumer sentiment final for December 59.7 versus 59.1 preliminary
- Final Michigan consumer sentiment Index for December 2022
- Prior month 56.8
- Preliminary estimate 59.1
- Final Michigan consumer sentiment index 59.7 versus 59.1 preliminary
- Current conditions 59.4 versus 60.2 preliminary. 58.8 last month
- Expectations 59.9 versus 58.4 preliminary. 55.6 last month
- one year inflation final 4.4% versus 4.6% preliminary. 4.9% last month
- five year inflation expectations 2.9% versus 3.0% preliminary. 3.0% last month
US November new home sales 640K vs 600K expected
- November US new home sales data
- Prior was 632K
- Sales monthly change +5.8% vs -4.7% expected
- Prior change +7.5%
Atlanta Fed Q4 GDPNow tracker rises to +3.7% from +2.7%
- Housing starts and durable goods orders among the drivers
Some good economic data points today drove a jump in the Atlanta Fed GDPNow tracker for Q4 to +3.7% from +2.7%.
“After recent releases from the US Census Bureau, the US Bureau of Economic Analysis, and the National Association of Realtors, the nowcasts of fourth-quarter real personal consumption expenditures growth and fourth-quarter real gross private domestic investment growth increased from 3.4 percent and -0.2 percent, respectively, to 3.6 percent and 3.8 percent, respectively,” the release said.
US durable goods for November -2.1% versus -0.6% expected
- US durable goods data for the month of November 2010 22
- Durable goods orders -2.1% versus -0.6% expected. Prior month was revised to +0.7% from 1.0% from 1.0%
- The fall in durable goods was the first after three consecutive monthly increases of 0.2%, 0.2% and 0.7%.
- Ex transportation 0.2% vs 0.0% expected. Last month 0.1% revised from 0.5%
- Ex defense -2.6% vs. 0.4% last month (revised from 0.8%)
- Non defense Cap ex-Air 0.2% vs 0.0% expected last month 0.3% (revised from 0.7%).
- transportation equipment was down for the first month after three consecutive monthly increases. It fell -6.3%
- Shipments of manufacturing durable goods have been up for 18 the last 19 months. The increase 0.2% following a 0.4% increase in October
- Shipments of transportation equipment shipments have been up 13 the last 14 months. They increase by 0.8%. Given the shipments declined this month, one would expect a softening of that trend going forward at least temporarily
- unfilled orders fell came in virtually unchanged. Unfilled orders have increased for 26 consecutive months
- unfilled transportation equipment fell for the first time after 18 consecutive monthly increases by -0.1%
- inventories which have been up for 22 consecutive months, increased by 0.1% versus 0.1% increase last month
Commodities
Gold bulls move back in, market remains coiled
- The Gold price is back in line with the coil and would be expected to continue higher or at least stay sideways.
- Failing this, then an even deeper move in Gold price would be on the cards for the days ahead with $1,775 eyed.
As per the prior day’s analysis, Gold Price Forecast: XAU/USD bulls need to commit at key trendline support, the Gold price has found demand at the said support area and has moved back into line with the broader bullish trend. Gold price edged up on Friday ahead of the Christmas holidays and long weekend and was supported by cooling inflation data in Friday’s data storm.
US consumer spending glided 0.1% higher in November after climbing 0.4% in October, in a sign that inflation is cooling, although not as much as markets need to see to start to expect a pivot from the Federal Reserve or a slowdown in their rate-hike path. Year-over-year, (YoY), the Personal consumption expenditures index, (PCE), landed at 5.5%, a half-percent cool-down from October. Stripping away volatile food and energy prices, the index was up on monthly and annual bases by 0.2% and 4.7%, respectively, in-line with consensus. The bad news for Gold price is that the October PCE inflation data was upwardly revised.
US Gross Domestic Product data on Thursday and Jobless Claims also highlighted the country’s economy rebounded faster than previously estimated and that the jobs market remains very tight. All in all, the slew of data does little to turn the tables with regard to speculation that the Fed will stay the course to fight inflation in 2023. Such rate hikes to tame price pressure weigh on the non-yielding asset that pays no interest which is now on track for a second consecutive yearly decline.
Fed will have to do more
Analysts at Brown Brothers Harriman said markets still don’t believe the Fed. ”After rising as high as 5.5% after the most recent FOMC meeting, the terminal rate as seen by the swaps market has fallen back to around 5.0%,” the analysts explained. ”Similarly, WIRP suggests a 50 bp hike February 1 is only 33% priced in, followed by a final 25 bp hike March 22. We cannot understand why the markets continue to fight the Fed. With the exception of some communications missteps here and there, chair Jerome Powell and company have been resolute about the need to take rates higher for longer. Recent US data confirm that the labor market remains strong and that the Fed will have to do more.”
WTI crude oil settles at $79.56
- Up $2.07 or 2.671%
The price of WTI crude futures are settling at $79.56 . That’s up $2.07 or 2.671%
Frigid temperatures across most of US are contributing to the move to the upside. The high price today extended back over the $80 level to $80.30. The low price was down at 78.01.
Looking at the hourly chart, the price moved back above the 38.2% retracement of the move down from the November 7 high. That level comes in at $79.16.
The rising 100 hour moving average is down at $77.4, and the rising 200 are moving averages at $76.52. Earlier this week, the price tested that 200 hour moving average and found successive buyers against the level. That gave the buyers the go-ahead to push the price to the upside from a technical perspective.
EU News
Major European indices close the day with mixed results
- France’s CAC and Spain’s Ibex lower
The major European stock indices are ending the day with mixed results:
- German DAX +0.19%
- France’s CAC -0.2%
- UK’s FTSE 100 +0.05%
- Spain’s Ibex -0.04%
- Italy’s FTSE MIB +0.29%
Looking at the changes for the week:
- German DAX, +0.34%
- France’s CAC, +0.81%
- UK’s FTSE 100, +1.92%
- Spain’s Ibex, +1.93%
- Italy’s FTSE MIB
Other News
US House passes $1.7 trillion spending bill
- It will now head to Biden’s desk
The vote in the House was 225-201 with one Democrat (AOC) voting ‘no’ and 10 Republicans voting ‘yes’.
The bill funds the government through next September. All this spending is one day going to be a big tailwind for gold.
Türkiye: Dramatic rate hikes will be needed next year – TDS
On Thursday, the Central Bank of the Republic of Turkey kept its key interest rate unchanged at 9.00% as expected. Analysts from TD Securities continue to believe that dramatic rate hikes will be needed in 2023.
Key Quotes:
“The CBRT left the benchmark one-week repo rate on hold at 9.00%, one month after calling the end of the easing cycle. This is in line with our expectations and the consensus. The basic structure of the CBRT statement has remained unchanged compared to the November one.”
“The comment that “the comprehensive review of the policy framework continues with the aim of encouraging permanent and strengthened liraization in all policy tools of the CBRT” may be loosely interpreted as the possibility of more easing down the road, if this is deemed to help the CBRT achieve its objectives. While this has always been a distinct possibility, the CBRT seems to show no concern of a market misinterpretation. And this lack of concern is concerning to us. The market may also find itself unprepared for this.”
“We continue to believe that dramatic rate hikes will be needed next year, but not before the lira becomes unhinged again. Current conditions seem to discourage going for a negative view on the lira in the short term, but the fundamental backdrop continues to suggest this is the path of least resistance.”
Cryptocurrency News
ADA Price Prediction: Cardano in the green despite rejection as $0.30
- Cardano price bounces back 1% on Friday ASIA PAC session after a violent week.
- ADA tries to tie up with gains as markets made a nosedive move again on Thursday night.
- With markets burning, ADA could be the guiding light to the promised land.
Cardano (ADA) price action is notwithstanding a violent risk-asset sell-off that has been going on for almost the whole week. The Nasdaq is leading the way in the sea od red that is spilling the markets, with Tesla and Twitter at the top as Elon Musk is losing investor confidence in the businesses he is involved in. This is putting remaining pressure on risk assets, limiting any upside for Cardano price and other cryptocurrencies.
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