North American News
US major indices close lower
- Nasdaq leads the way lower
The major US indices are ending the day down, with the NASDAQ leading the way.
The final numbers are showing:
- Dow industrial average -39.09 points or -0.12% at 33553.83
- S&P index -32.96 points or -0.83% at 3958.78
- NASDAQ index -174.74 points or -1.54% and 11183.67
- Russell 2000-36.03 points or -1.91% at 1853.16
in after earnings:
Cisco Systems
- EPS came in at $0.86 vs. $0.84 expected.
- Revenues were higher at $13.6 billion vs. 13.3 million expected.
- Q2 revenues you as 4.5% – 6.5% vs. expected +4.2%
- Q2 adjusted EPS of you being $0.84 – $0.86 vs. expectations of $0.85
- they also rose fiscal year revenue view to +4.5% to +6.5% vs. 4% – 6%
- the stock is trading higher in after-hours trading at $46.55 up $2.16 or 4.87%
Nvidia
- EPS $0.58 vs. $0.69 estimate
- $5.93 billion vs. vs. $5.77 billion estimate
- Nvidia stock is trading up $4.70 or 2.9%
US treasury auctions of $15B of 20 year bonds at a high yield of 4.072%
- 20 year bond auction has strong demand
- High yield 4.072%
- WI level 4.101%
- Tail -2.9 bps
- Bid to cover 2.64X vs 2.53X
- Directs (domestic demand) 15.4% vs 6 month avg of 17.6%
- Indirects (international demand) 75.4% vs 6 month avg of 70.3%
- Dealers 9.3% vs 6 month average of 12.1%
US October retail sales 1.3% vs. 1.0% expected
- October 2022 US retail sales data
- Prior was 0.0%
- Retail sales x.x% vs 1.0% expected
- Ex auto 1.3% vs. 0.4% expected (prior 0.1%)
- ex auto/Gas 0.9% vs. 0.2% expected (prior revised higher to 0.6% vs 0.4%)
- control group 0.7% vs. 0.3% expected
- Prior control group 0.4% revised HIGHER to 0.6%
- retail sales YoY and adjusted for inflation x.x% vs 8.23% last month
- Furniture +1.1%
- autos +1.3%
- Gas +4.1%
US October import price index -0.2% m/m vs -0.4% expected
- US import and export prices for the month of October 2022
- Import prices -0.2% vs. -0.4% estimate
- Prior was -1.2%
- export prices mom -0.3% vs. -0.4% estimate
- import prices year on year 4.2% vs. 6.0% last month
- US non-fuel import prices -0.1% vs -0.5% prior. Year on year +2.9% vs +3.7% prior
- petroleum import prices -1.2% vs. -7.5% last month
US October industrial production -0.1% vs +0.2% expected
- US October 2022 industrial production data
- Prior was +0.4%
- Capacity utilization 79.9% vs 80.4% expected
- Manufacturing output +0.1% vs 0.2% expected
- Prior manufacturing output +0.4% (revised to +0.2%)
US NAHB housing market index 33 vs 36 expected
- US sentiment survey from the National Association of Home Builders
- Prior was 38
Atlanta Fed GDP estimate for 4Q growth rises to 4.4%
- Atlanta Fed GDPNow estimate for 4Q GDP growth
The Atlanta Fed anounced their recent estimate for 4Q growth given most recent economic data.
They now see growth at 4.4% from 4.0% on November 9. In their own words:
“The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2022 is 4.4 percent on November 16, up from 4.0 percent on November 9. After this morning’s retail sales release from the US Census Bureau, the nowcast of fourth-quarter real personal consumption expenditures growth increased from 4.2 percent to 4.8 percent.”
Commodities
Gold still points to the downside while below 200DMA at $1,803 – Credit Suisse
Gold has rebounded further but still remains below the 200-Day Moving Average at $1,803. Therefore, strategists at Credit Suisse stick to their bearish bias.
200-DMA at $1,803 to cap further upside for now
“Gold has rebounded further and is now hovering solidly above the 55DMA at $1,680, hence questioning the validity of the large ‘double top’.”
“A break back below the 55DMA is needed to inject fresh downside momentum into the market again, with next supports seen at the recent YTD low at $1,614, before the 50% retracement of the whole 2015/2020 upmove seen at $1,560.”
“The 200DMA, currently seen at $1,803, is expected to cap further upside for now. However, above would open the door for a potential rise toward the $1,877 June high next.”
WTI crude oil is settling at $85.59
- Down -$1.33 or -1.53% on the day
The price of WTI crude oil is settling the day at $85.59. That is down -$1.33 or -1.53%
EIA weekly US oil inventories -440K vs -5400K expected
- Weekly US inventory and supply data
- Prior was +3925K
- Gasoline +2207K vs +310K expected
- Distillates +1120K vs +513K expected
- Refinery utilization +0.8% vs +0.5% expected
- Implied demand at 21.087 mbpd vs 20.267 mbpd prior
- Gasoline demand -269K vs +351K bpd prior
EU News
BOE’s Bailey: Core goods inflation appears to be coming off
- More hints of less inflation from Bailey
Broadbent also noted that supply chain problems and the war in Ukraine are much bigger causes of inflation than sterling weakness.
UK 10-year gilt yields are down 18 bps today to the lowest since September 6.
ECB sources: May favor 50 basis point rate hike in December rather than 75 basis pointsr
- ECB sources, to Bloomberg
Bloomberg is reporting that
- ECB officials may favor a 50 BP rate hike at the December meeting vs the 75 basis points.
Now hearing that increases in inflation may lead to another 75 basis point hike.
Other News
Goldman Sachs now sees the Fed hiking to 5.00-5.25%
- Previously saw a peak at 4.75-5.00%
Goldman Sachs is out with a change to its Fed call.
“We add another 25bp Fed rate hike to forecast. We continue to expect 50bp hike in Dec, 25bp hikes in Feb & March, and we now add 25bp hike in May. This raises forecast of peak Fed Funds rate to 5-5.25% (vs 4.75-5% previously & 4.9% peak in market pricing)”
White House: US has full confidence in Polish government’s investigation of explosion
- White House response to the bombing in Poland and killed 2 civilians yesterday
The White House is saying that
- the US has full confidence in Polish government’s investigation of explosion near their mortar with Ukraine.
Fed’s Daly: Contacts say consumers are stepping back
- Daly on CNBC
- We want to see the economy slow
- Consumers are preparing for a slower economy, that’s a good start
- Want to get back to a sustainable pace of growth
- Pausing is off the table right now, discussion is on the pace
- We’re focusing on the terminal rate
- A high of 4.75-5.25% is reasonable
- After determining the high, we’ll have to determine how long to hold
- Very focused on economic data
- Global conditions are a headwind for US growth
- Business leaders are still concerned about inflation
- We’re tightening into a strong economy
Fed’s Williams: Central banks around the world taking actions to restore price stability
- No direction comments on the outlook or monetary policy
- It is importance to bolster resilience of Treasury market
- Monetary policy isn’t the best tool to address financial stability risks
- Price stability essential for US economy to function well
Cryptocurrency News
XRP price bows to headwinds, FTX-triggered liquidity crisis risks prolonging crypto winter
- XRP price is stuck between a rock and a hard place amid fears of a longer crypto winter.
- The crypto market faces a liquidity crisis that could extend crypto winter to the end of 2023.
- A buy signal from the Super Trend indicator reveals that buyers have the upper hand, and XRP price can close the gap to $0.50.
XRP price could erase most of the gains accrued over the last few days due to fears of the overreaching effects of the FTX crisis. The international money transfer token tested support at $0.32 twice in less than two weeks, owing to the resistance encountered at $0.40. It appears that XRP price will consolidate between the demand area at $0.31 and the supply area at $0.41 as market participants make up their minds.
Could FTX’s Bahamas arm bankruptcy filing and suspension of Australian license extend crypto winter?
- FTX Digital Markets filed for a Chapter 15 bankruptcy in New York on November 16.
- The Australian Securities and Investments Commission (ASIC) announced the suspension of FTX’s license until 2023.
FTX’s collapse continues to spread further, even engulfing its “separate” arm in the Bahamas region. Those impacted by FTX have already faced the consequences, but the recent market crash will most likely mark the end of bearish sentiment.
FTX Digital Markets go down
FTX’s Bahamas arm – FTX Digital Markets, filed for Chapter 15 bankruptcy, in the Southern District of New York, on November 16. This filing allows for the representative, FTX Digital Markets, in this case, to proceed with the case in the US courts.
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