North American News
US Equities Secure Gains, Yet Taper Momentum from Intraday Peaks as Closing Bell Sounds
- NASDAQ index lags as funds flow into the Dow 30
The major US indices are closing the day higher. However, the broader indices in particular are well off their intraday highs:
- Dow Industrial Average rose 163.51 points or 0.47% at 34991.22. At session highs, the index was up 223.39 points.
- S&P index rose 7.18 points or 0.16% at 4502.89.At session highs, the index was up 25.46 points.
- NASDAQ index rose 9.44 points or 0.07% at 14103.83.At session highs, the index was up 99.90 points
- The small-cap Russell 2000 rose 2.895 points or 0.16% at 1801.22.At session highs, the index was up 31.67 point
After the close Cisco systems announced their earnings:
- EPS came in at $1.11 versus $1.03 estimate
- Revenues came in at $14.67 billion versus 14.62 billion estimate
However, forward guidance showed light revenues and earnings outlook.
Cisco shares are trading down $5.07 or -9.46% at $48.37 in after-hours trading.
Earlier today, Target announced its earnings and the market was impressed:
- Target reported earnings per share (EPS) of $2.10, exceeding the expected $1.48.
- The company’s revenue for the fiscal third quarter was $25.4 billion, surpassing the anticipated $25.24 billion.
The shares of Target are currently up $19.70 or 17.79% at $130.49.
Atlanta Fed GDPNow model project Q4 growth at 2.2%
- The Q4 growth forecast rises to 2.2% from 2.1% last
The Atlanta Fed GDPNow model is projecting growth in Q4 at 2.2% in it’s recent calculations. In their own words:
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2023 is 2.2 percent on November 15, up from 2.1 percent on November 8.After recent releases from the US Census Bureau, the US Bureau of Labor Statistics, and the US Department of the Treasury’s Bureau of the Fiscal Service, the nowcasts of fourth-quarter real personal consumption expenditures growth and fourth-quarter real gross private domestic investment growth increased from 2.6 percent and -1.1 percent, respectively, to 2.7 percent and -0.8 percent.
US October PPI 1.3% versus 1.9% expected
- October producer price index data for the US
- Prior month 2.2%
- PPI final demand YoY 1.3% versus 1.9% expected
- PPI final demand MoM -0.5% versus 0.1% expected
- PPI ex Food and Energy YoY 2.4% versus 2.7% expected.Prior month 2.7%
- PPI ex Food and Energy MoM 0.0% versus 0.3% expected.Prior month revised to 0.2% from 0.3%.
- PPI Ex Food and Energy/Trade 2.9% versus 3.0% last month (revised from 2.8%)
- PPI Ex Food and Energy/Trade 0.1% versus 0.3% last month (revised from 0.2%)
More details from the Bureau of Labor Statistics on final demand for goods and services
- Prices for final demand goods decreased by 1.4% in October, with the primary contributor being a 6.5% drop in the index for final demand energy.
- Prices for final-demand foods fell by 0.2%, while the index for final demand goods excluding foods and energy increased slightly by 0.1%.
- The significant portion of the decline in the final demand goods index can be attributed to a 15.3% decrease in gasoline prices.
- Other products that saw price declines include diesel fuel, hay, hayseeds, oilseeds, home heating oil, liquefied petroleum gas, and light motor trucks. However, prices for tobacco products increased by 2.4%.
On the final demand services:
- In final demand services, prices remained unchanged in October after six consecutive increases.
- The index for final demand transportation and warehousing services increased by 1.5%, while prices for final demand services excluding trade, transportation, and warehousing rose by 0.1%.
- Margins for final demand trade services declined by 0.7%.
- Within final demand services, airline passenger services saw a 3.1% price increase, while other sectors like chemicals and allied products wholesaling, inpatient care, and truck transportation of freight also experienced price hikes.
- Conversely, margins for machinery and vehicle wholesaling declined by 2.9%, and prices fell in sectors like apparel, footwear, and accessories retailing, portfolio management, traveler accommodation services, and health, beauty, and optical goods retailing.
US October retail sales -0.1% vs -0.3% expected
- US October 2023 retail sales data highlights
- Prior was +0.7% (revised to +0.9%)
Details:
- Retail sales m/m -0.1% versus -0.3% expected
- Ex-autos +0.1% versus 0.0% expected.
- Prior ex-autos +0.6%
- Control group +0.2% versus 0.2% expected.
- Prior control group +0.6% (revised to +0.7%)
- Retail sales ex gas and autos +0.1% vs +0.6% prior
Empire Fed November manufacturing index +9.1 vs -2.8 prior
- New York-area manufacturing index
- Prior was -4.6
Details:
- New orders -4.9 versus- 4.2 last month
- Shipments +10.0 versus +1.4 last month
- Prices paid +22.5 versus +25.5 last month
- Prices received +11.1 versus +11.7 last month
- Employment -4.5 versus +3.1 last month
- average employee work week -3.8 versus +2.2 last month
- Unfilled orders -23.2 versus -19.1 last month
- Delivery times -6.1 versus -6.4 last month.
- Inventories +9.1 versus -2.1 last month
US Sept business inventories +0.4% vs +0.4% expected
- US September business inventories and retail inventories
- Prior was +0.4%
- Retail inventories ex-autos +0.4% vs +0.3%
US MBA mortgage applications w.e. 10 November +2.8% vs +2.5% prior
- Latest data from the Mortgage Bankers Association for the week ending 10 November
- Prior +2.5%
- Market index 170.5 vs 165.9 prior
- Purchase index 133.2 vs 129.0 prior
- Refinance index 354.3 vs 347.3 prior
- 30-year mortgage rate 7.61% vs 7.61% prior
BofA Global Research no longer sees another Fed rate hike in December
- This follows the softer-than-expected inflation data yesterday
The firm says that “we now think that the hiking cycle is over” in a note dated yesterday, after the release of the US CPI data. For some context, they previously had penciled in a final 25 bps rate hike by the Fed for December.
JP Morgan CEO suggests further action on rates may be needed, pause may not last
- JP Morgan CEO Jamie Dimon discusses the Federal Open Market Committee
JP Morgan CEO says that while the Federal Open Market Committee (FOMC) is correct to pause in its interest rate hike cycle for now, they ‘might have to do a little bit more’.
- Says inflation ‘might not go away that quickly’
Dimon was speaking in an interview with Bloomberg TV.
Earlier:
JP Morgan CEO Dimon says people are overreacting to short-term numbers on inflation
- JP Morgan CEO Dimon urges caution in response to recent inflation data
Fed’s Daly encouraged by falling CPI but warns against declaring end of hikes
- Comments from Daly in a newspaper interview
- Recent data showing falling inflation “very, very encouraging”
- Refused to rule out rate hikes, said they should be “thoughtful, take our time, not rush to judgment and not make declarations”
- “We have to be bold enough to say ‘we don’t know’ and bold enough to say ‘we need to take the time to do it right’.”
- “What I worry about is that without a sufficient amount of information about whether we’re really on that disinflationary process that brings us back to 2 [per cent], we have to ‘stop-start’”
- A stop-start would hurt credibility
- Indicated little concern about sharp fall in yields recently
- “None of the concerns that I’m hearing are really about a dire, fall-off-the-cliff economy.”
- Rate cuts are “not happening for a while”
US-China summit gets underway, meeting expected to last four hours
- Biden attends with Blinken, Yellen and others
Biden is set to welcome Xi Jinping and his team.There will be brief statements and pictures, then they will hold private meetings. The talks are expected to continue for 4 hours and we will get read-outs afterwards.
Biden:
- Our meetings have always been candid, straightforward and useful
- We can work together on artificial intel and climate
- We have to ensure competition does not lead to conflict
Xi:
- The global economy is recovering but remains sluggish
- Protectionism is rising
- China-US relationship is most-important bilateral relationship in the world
- Planet earth is big enough for both countries to succeed, one county’s success
- “I’m still of the view that major country competition is not the prevailing trend of our times and cannot solve the problems of China, the United States or the world at large.”
Commodities
Gold softens as inflation cools, $1,950 in sight
- Spot Gold is heading back towards $1,950 after getting sharply rejected from $1,975.
- Gold’s latest rebound is running into friction after setting a six-day high.
- US data implying that inflation is cooling, which threatens gold’s bullish stance.
Spot Gold bids are getting knocked back on Wednesday as buyers fail to hang onto $1,975. The yellow metal kicked the week off with a bullish rejection from $1,940, but Gold is now trading into the downside heading into the back half of the trading week.
Money markets are currently pricing in a 100% chance that the Fed will be standing pat on rate hikes in December, and investors are currently pivoting towards expectations of when the US central bank will begin cutting interest rates.
Crude oil settles at $76.66
- Down $1.60 or 2.04% on the day
The price of crude oil is settling at $76.66, down -$1.60 or -2.04%.
The high for the day reached $78.77. The low reached $76.45.
EIA weekly oil inventories +3600K vs +1793K expected
- US weekly petroleum inventory data
- Prior headline crude +774K
- Distillates -1400K vs -1242k expected
- Gasoline -1500K vs +622K expected
- Cushing 1.900M
Oil Market Trends: Vitol research reveals pre-pandemic intensity return
- Vitol expect a slight surplus in the global oil market for the next year.
Vitol global head of research
- Says oil intensity of most economies has returned to pre-pandemic trends except for the US
- Expect fairly balanced to slight surplus in global oil market for next yea
Citi’s bold forecast: Brent crude oil prices to $73 / bbl in Q2 2024
- But it could be a wild ride in oil as Citigroup says to watch out for potential price explosions.
A piece in Dow Jones / Wall Street Journal media on Citgroup’s Brent oil forecasts for next year
- project $73/bbl price for Brent by Q2 2024
- and an end 2024 forecast at $68/bbl
- Citi believes that supply will outpace demand by an average 1.4 million b/d in 2024
- citing contributions from non-OPEC supply from Argentina, Brazil, Canada, Guyana and the U.S.
Citi do warn though that there is potential for explosive price gains should there be a polar vortex or geopolitical upheaval (but Citi sees a low risk for a potential widening of the war in the Middle East)
EU News
European equity close: Third day of gains
- Closing changes for the main European bourses
- Stoxx 600 +0.4%
- German DAX +0.9%
- UK FTSE 100 +0.6%
- French CAC +0.4%
- Italy MIB +0.5%
- Spain IBEX +0.2%
Eurozone September trade balance €10.0 billion vs €6.7 billion prior
- Latest data released by Eurostat – 15 November 2023
- Prior €6.7 billion
UK October CPI +4.6% vs +4.8% y/y expected
- Latest data released by ONS – 15 November 2023
- Prior +6.7%
- CPI 0.0% vs +0.1% m/m expected
- Prior +0.5%
- Core CPI +5.7% vs +5.8% y/y expected
- Prior +6.1%
- Core CPI +0.3% vs +0.4% m/m expected
- Prior +0.5%
Germany October wholesale price index -0.7% vs +0.2% m/m prior
- Latest data released by Destatis – 15 November 2023
- Prior +0.2%
Italy October final CPI +1.7% vs +1.8% y/y prelim
- Latest data released by Istat – 15 November 2023
- Prior +5.3%
- HICP +1.8% vs +1.9% y/y prelim
- Prior +5.6%
France October final CPI +4.0% vs +4.0% y/y prelim
- Latest data released by INSEE – 15 November 2023
- Prior +4.9%
- HICP +4.5% vs +4.5% y/y prelim
- Prior +5.7%
European Commission cuts euro area 2023 growth forecast, looks for rebound in 2024
- The European Commission releases its latest forecast for the euro area economy – 15 November 2023
- 2023 economic growth forecast lowered to 0.6% from 0.8% previously
- 2024 economic growth forecast seen at 1.2%, then 1.6% in 2025
- 2023 inflation forecast seen at 5.6%, then 3.2% in 2024, then 2.2% in 2025
- High inflation, interest rates, and weaker external demand took a heavier toll on growth than anticipated
We must stay the course to continue to get inflation down to 2% – Sunak
- Remarks by UK prime minister, Rishi Sunak
- It is welcome news that prices are no longer rising as quickly
- But we know many people are continuing to struggle
- Must stay the course to get inflation all the way back down to 2%
Other News
China Oct. Industrial Production +4.6% y/y (exp 4.4%) & Retail sales +7.6% y/y (exp 7.0%)
- China ‘activity data’ for October 2023
The activity data is centred on 3 indicators: industrial production, retail sales and fixed asset investment.
A beat for retail sales (a consumption indicator rising is good news for China)
- service consumption grew at a faster pace than goods consumption
A beat also for IP.
The official data is point to more signs of a sustained recovery in China’s economy.
National Bureau of Statistics (NBS) comments:
- foundation of economic recovery is yet to be consolidated
- expects China’s price situation to improve, no deflation
- will be twists and turns in the economic recovery
- employment situation is generally stable
- property market is still in adjustment, transformation
- Urban Unemployment (in 31 major cities) 5.0% vs prior 5.0%
- Apparent oil demand +10.9% y/y
People’s Bank of China MLF rate at 2.5% (expected 2.5%, prior 2.5%): injects 1450bn yuan
- Largest net injection via MLF since December 2016
Injects 1450 bn yuan for 1 year
- 850bn yuan of MLF mature today
- thus a 600 bn yuan injections via 1 year funds, the largest since December 2016
Chinese authorities promise to release data on youth employment – no time frame given
- China’s youth jobless rate reached a record high of 21.3% in June. Data has not been published since.
China’s youth jobless rate hit a record high of 21.3% in June.This prompted Chinese authorities to stop publishing the rate, and sure enough, we’ve heard no more on it since then.
Today, though, National Bureau of Statistics (NBS) spokesperson Liu Aihua said China will release data on youth employment in a timely manner. Adding that China’s employment situation is generally stable and employment for college graduates will continue to improve, the spokesperson said.
China’s trade blocks to be lifted by Christmas, says Australian Trade Minister
- Expresses confidence in restoring a stable relationship with its largest trading partner.
Australia’s trade minister Don Farrell spoke with local media earlier saying he is confident China will lift all trade blocks next month.
- “I remain very confident … that by Christmas all of these trade impediments will be removed,”
- “And we will have restored that stable relationship that we want with our largest trading partner.”
Australian Q3 Wage Price Index +1.3% q/q (vs. expected +1.3%)
A slight beat for the y/y result while the q/q is in line. At +1.3% the q/q is the strongest quarterly growth rate in this data series’ 26-year history
- private sector wages +1.4% q/q
- public sector +0.9%
The Reserve Bank of Australia (RBA) anticipated that aggregate wage growth would continue to pick up over the course of 2023. The growth in the WPI was forecasted to peak at around 4.25% towards the end of this year. Further ahead the Bank expects that as economic growth slows, labour market conditions are expected to ease slightly, potentially leading to a modest slowdown in wage growth.
New Zealand data: Card retail sales -0.7% m/m in October (prior -0.8%)
- New Zealand households bitten by interest rate hikes – the impact persists.
Card retail sales -0.7% m/m in October
- prior -0.8%
- Card retail sales -2.0% y/y
- prior +1.6%
REINZ New Zealand house sales +8.0% vs +5.1% prior
- New Zealand house price data
New Zealand housing activity has picked up.
Japanese Economy Minister warns of global slowdown impact on Q3 GDP
- Japanese Economy Minister highlights the risk of the Chinese economic outlook.
Japanese Economy Minister statement on the Q3 GDP release earlier:
- Risk of global slowdown pushing down Japan’s economy warrantsattention
- Domestic demand including consumption, capex lacked strength in q3
- Private consumption turned out flat due to effect of price hikes
- Capex weighed by rises in materials prices and declining machinery and construction investments
- Service consumption such as eating out remained in recovery
Japan preliminary Q3 GDP -0.5% q/q (expected -0.1%)
- Japan’s Q3 Deflator (an indicator of inflation) surges to 5.1% y/y
Japanese economic growth in the third quarter slowed significantly from the second.
The annualised GDP falls worse-than-expected 2.1%
- falling for the first time in three quarters
Private consumption, which makes up more than half of the economy, was flat q/q
- capex -0.6% q/q
- exports +0.5% q/q
- domestic demand contribution to GDP fell by 0.4 points
The Bank of Japan has trimmed the amount of its regular bond buying
Bank of Japan cuts the amount of 5 – 10 year Japanese Government Bonds (JGBs) to 575 bn yen from previously 675bn
- 1 – 3 year JGBs to 375bn yen from 425bn
Japan visitors in October exceed pre-Covid levels
- Tourism in Japan is back to normal
That’s good news for the Japanese economy but a lot of it is also helped by a much weaker currency, which makes Japan a more attractive tourist destination these days. The number of visitors in October reached 2.52 million, marking a full recovery for the first time since the Covid pandemic.
Cryptocurrency News
Bitcoin Charges Toward Annual Peaks, Unleashing over 5% Surge in Spectacular Rally
- Bitcoin erases two days of losses
Bitcoin fell yesterday in a move that was strangely at-odds with the raging rallies in risk assets elsewhere. Some of the selling was because of confusion and bad reports about ETF filings.
In any case, BTC found support ahead of the early-November lows and has since shot higher, gaining more than 5% today. It’s again within striking distance of the highs for the year and it will certainly get there if today is the day we finally get the ETF approval.
Sandbox whales to halt after $5 million accumulation as SAND price jumps almost 4.5% in 24 hours
- SAND price failed to breach the $0.441 resistance, causing the decline over the last 48 hours that has recovered on Wednesday.
- Whale addresses have accrued nearly 11.4 million SAND in the past two weeks but could pause this streak for a while.
- The 7-day MVRV ratio shows that SAND investors could resort to HODLing for now, given that the altcoin failed to reach the opportunity zone.
SAND price noted recovery in the past 24 hours, but one of the biggest catalysts of the altcoin might not be present in the next leg of the rally. This is because Sandbox did not give its investors much room to accumulate before resuming its run, as evidenced by the on-chain indicators.
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