North American News
US major indices close higher. Gains led by the Dow 30
- The major indices are up for the 2nd consecutive day
The major US indices are closing higher for the 2nd consecutive trading day. The gains are being led by the Dow 30, also for the 2nd consecutive day.
Within the Dow, the top 5 gainers were:
- Walgreens, 4.05%
- Salesforce 3.46%
- Boeing 3.03%
- Amgen 3.01%
- Microsoft 2.96%
There were 3 Dow stocks which ended negative on the day
- Nike -2.51%
- 3M -0.14%
- Verizon -0.11%
The final numbers are showing:
- Dow industrial average up 423.59 points or 1.31% at 32827101
- S&P index up 36.33 points or 0.96% at 3806.88
- NASDAQ index +89.28 points or 0.85% at 10564.53
- Russell 2000 9.943 points or 0.55% at 1809.809
US consumer credit comes in at $24.90 billion vs. $30.0 billion expected
- US consumer credit for September 2022
- US consumer credit falls to $24.98 billion. Lower than expectations of $30.0 billion
- Prior month revised to $30.18 billion from $32.24 billion expected
- revolving credit came in at $8.32 billion
- non-revolving credit $16.65 billion
US October Conference Board employment trends 119.57 vs 120.17 prior
- US employment trends gauge from The Conference Board
- Prior was 120.17
Commodities
Gold remains capped below the $1,680 resistance area
- Gold picks up again, but it remains unable to breach $1,680.
- The positive market mood is weighing on the safe-haven dollar.
- Rumors that Chima would be about to relax its Zero-COVID policy have boosted optimism.
Gold futures have bounced up from $1,665 on Monday’s early European session appreciating on the back of US dollar weakness in a risk-on session, although it seems unable to find acceptance above $1,680 so far.
Precious metals appreciate as market sentiment improves
Precious metals have opened the week on a moderately bid tone, favored by a positive mood. Market rumors pointing out to a review of COVID-19 restrictions in China have improved investors’ sentiment on Monday, curbing demand for the safe-haven USD.
The comments by the Chinese National Health Commission, which has reiterated the Government’s commitment to the Zero-COVID policy and warned about the possibility of severe restrictions ahead, as the winter flu season approaches have tempered appetite for risk but have not altered the market mood, which remains moderately positive, with the greenback losing ground against a basket of the most traded currencies.
In absence of first-tier macroeconomic releases, the positive Friday’s Non-Farm Payrolls report is still driving market sentiment on Monday. Furthermore, the Eurozone Sentix survey has recorded an improvement in investors’ sentiment in November and has contributed to underpin appetite for risk.
Silver subdued around $20.85s amidst an upbeat sentiment
- The Silver price registers a minuscule loss of 0.02% late in the New York session.
- Last week’s US employment data was a headwind for the American Dollar, which tumbled the most since March 2020.
- Silver Price Analysis: Neutral-upwards, and if it pierces $21.00, a test of the YTD high is on the cards.
The Silver price fluctuates in the North American session due to risk appetite improvement after last Friday’s US employment data showed that the economy continues to add jobs, though the Unemployment Rate jumped, signs that the Federal Reserve’s policy is beginning to impact the “tight” labor market. That, alongside uncertainty on US midterm elections and inflation data to be released, keeps the American Dollar on the defensive. At the time of writing, the XAGUSD is trading at $20.82, below its opening price by 0.11%.
An improvement in risk appetite, a headwind for Silver
Wall Street continues to trade in the green, while the US Dollar drops to fresh two-week lows, as shown by the US Dollar Index (DXY). Last week US employment report showed that the economy added more jobs than estimated, meaning that the Fed would need to do more; however, the unemployment rate edged up and is closing to 4% as the labor market flashed signs of easing, meaning that the Fed, could keep tightening, but at a slower rhythm.
Meanwhile, Fed officials began to cross wires. Boston Fed President Susan Collins said it makes sense to slowly hike rates to balance growth and inflation risks as the US central bank tries to achieve a “soft landing.” Nonetheless, it reiterated that rates might be higher than September’s projections. Later, Richmond’s Fed President Thomas Barkin said that the Federal funds rate (FFR) would likely end above 5%, while he foresaw a “potential” higher peak.
That said, XAGUSD rallied since last Friday as speculation that the Fed would lift rates gradually surfaced. Nevertheless, US Treasury bond yields recovered some ground, with the 10-year hup four bps at 4.197%, a headwind for the precious metals. In the meantime, as of Friday, the 10-year US Treasury Real yields stay at 1.72%, providing support for the greenback.
EU News
European equity close: Solid start to the week outside the UK
- Closing changes to the main bourses
European equities opened down 0.4%-0.6% but steadily recovered and generally finished higher.
- Eurostoxx 600 +0.3%
- Germany DAX +0.6%
- France CAC 40 flat
- UK FTSE -0.4%
- Spain IBEX flat
ECB’s Lagarde: Must bring inflation back to 2%
ECB’s Lagarde is on the tape saying:
- must bring inflation back to 2%
- Inflation is much too high
- Inflation expectations need to remain anchored
- Interest rates will need to rise more
Other News
SF Fed: Financial conditions similar to if the funds rate had exceeded 5.25% by September
- San Francisco Fed says monetary policy stance is tighter than Fed funds rate
The San Francisco Fed is out with an interesting report that argues that — using proxy data — that monetary policy has been substantially tighter than the federal feds rate indicates.
The implication would be that the Fed doesn’t need to tighten as much in the future. Of course, this is just one piece of research and it includes enough uncertainty that it certainly wouldn’t overshadown Powell’s stated risk management approach that means it’s better to overtighten and cut later than undertighten and face more inflation.
Cryptocurrency News
Battle of the titans in the crypto market won’t have any winners
- FTX CEO Sam Bankman-Fried and Binance CEO Changpeng Zhao trade accusations
Arguably the two biggest players in all of crypto are having a falling out.
FTX CEO Sam Bankman-Fried and Binance CEO Changpeng Zhao are trading allegations and it could sink the crypto market with them.
It traces back to FTT coin, which is FTX’s token and a report from CoinDesk that says Bankman-Fried’s trading company Alameda Research has about $6 billion of its $14.6 billion assets in the coin, which his other company created.
After the disclosures, Zhao tweeted that he will liquidiate the $529 million in FTX tokens that Binance holds over a few months. While saying it was risk management, he also hinted at another motivation.
Predictably, the moves have set off an endless series of rumors about insolvency and crypto traders encouraging each other to pull their funds.
The promise of crypto was that it wouldn’t need centralization and it could be trustless but here we are once again wondering whose word to trust.
“FTX is fine. Assets are fine,” Bankman-Fried tweeted an hour ago in a sign that the accusations are hurting. ” FTX has enough to cover all client holdings. We don’t invest client assets (even in treasuries). We have been processing all withdrawals, and will continue to be.”
If anything, the market response has been reassuring. If this would have happened six months ago it would have been a bloodbath but bitcoin is down $400 to $20,736. Solana is feeling some of the heat because it’s tied to Bankman-Fried but is still only down 12%.
In any case, this might not be the final chapter of this story. No one wins in a crypto civil war.
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