Round up of today's market news *

North American News

Wall Street Sees Mixed Close as Investors Digest Economic Data

Market Wrap
U.S. markets wrapped up the day with mixed results. The Dow Jones inched up by 47.21 points (0.11%) to close at 43,958.19, while the S&P 500 remained nearly unchanged, ticking up by 1.40 points (0.02%) to 5,985.39. The Nasdaq dipped by 50.66 points (-0.26%) to settle at 19,230.74, and the Russell 2000 led the declines with a 0.94% drop, down 22.47 points to 2,369.37.

Intraday Highlights
The Nasdaq reached session highs nearing record territory but was unable to sustain gains, while the S&P hit but pulled back from its all-time high close.

‘Magnificent Seven’ Mixed Performance

Amazon: +2.48%
Nvidia: -1.38%
Meta: -0.82%
Microsoft: +0.51%
Alphabet: -1.51%
Apple: +0.40%
Tesla: +0.53%

Cisco Systems ($CSCO) Earnings Overview
Q1 FY 2025 Highlights

Revenue: $13.8B (-6% YoY)
GAAP EPS: $0.68 (-24% YoY); Non-GAAP EPS: $0.91 (-18% YoY)
Net Income: GAAP $2.7B (-25% YoY); Non-GAAP $3.7B (-19% YoY)
EBITDA: GAAP Operating Income $2.4B (-45% YoY); Non-GAAP Operating Income $4.7B (-12% YoY)
Gross Margin: GAAP 65.9%; Non-GAAP 69.3%
Operating Margin: GAAP 17.0%; Non-GAAP 34.1%

Business Segment Highlights

Networking: Revenue down 23% YoY
Security: Revenue surged 100% YoY
Observability: Revenue up 36% YoY
Collaboration: Revenue declined by 3% YoY
Services: Revenue increased by 6% YoY

Positive Financials and Forward Guidance

Cisco’s product orders rose 20% YoY, notably in Security and Observability segments.
Gross margin exceeded forecasts, with non-GAAP EPS above estimates.
Q2 FY 2025 Outlook: Revenue between $13.75B to $13.95B, GAAP EPS $0.51 to $0.56, Non-GAAP EPS $0.89 to $0.91.
FY 2025 Revenue Guidance: Expected at $55.3B to $56.3B.

Strategic Moves and Market Sentiment
Cisco’s CEO highlighted its strategic focus on AI infrastructure investment as a growth driver, supported by acquisitions of DeepFactor and Robust Intelligence. CFO Scott Herren underscored Cisco’s aim to optimize profitability despite networking revenue declines. A $0.40 per-share dividend and a 40M share buyback reinforced Cisco’s shareholder return strategy.

Traders’ Takeaway
With strong order growth in security and observability, Cisco appears positioned for long-term bullish momentum. However, the contraction in networking revenue may temper short-term enthusiasm, making Cisco’s strategic pivot toward AI and security pivotal for future stock performance.

Market Performance
The major US indices closed with mixed results as investors navigated divergent sector trends. The Dow Jones Industrial Average edged up 47.21 points (0.11%) to close at 43,958.19, while the S&P 500 posted a minor gain, up 1.40 points (0.02%) at 5,985.39. In contrast, the NASDAQ Composite fell 50.66 points (-0.26%) to 19,230.74. Small caps were the day’s biggest underperformers, with the Russell 2000 down 22.47 points (-0.94%) to 2,369.37. Intraday, the NASDAQ came close to reaching a record level, while the S&P neared its all-time closing high before retreating slightly.

Key Movers – The Magnificent Seven
Performance among the market’s top tech giants was varied:

Amazon (+2.48%) led gains, supported by strong retail and cloud growth.
Nvidia (-1.38%) and Alphabet (-1.51%) lagged as tech momentum softened.
Meta (-0.82%) showed a mild decline amid ongoing regulatory scrutiny.
Microsoft (+0.51%) and Apple (+0.40%) posted modest gains.
Tesla (+0.53%) rose slightly, reflecting ongoing investor confidence in EV expansion.

Market Sentiment
Despite the Dow’s gain and S&P’s close near record levels, mixed results among tech leaders and small-cap struggles in the Russell 2000 suggest investor caution, with growth outlooks being evaluated sector by sector. Looking forward, sentiment remains fragile, especially in high-valuation tech, as macroeconomic conditions and earnings guidance continue to influence market direction.

US October core CPI 3.3% y/y versus 3.3% expected

US October 2024 consumer price index

Headline CPI:

Prior was +2.4% y/y
Current y/y is +2.6%
m/m reading at +0.2% vs +0.2% expected
Month-over-month unrounded 0.2441 vs 0.1799% prior

Core measures:

Core CPI +3.3% vs +3.3% expected
Core CPI m/m +0.3% vs +0.3% expected
Core unrounded +0.2800% vs +0.3124% m/m prior
Real weekly earnings +0.1% vs -0.1% prior (prior revised to +0.1%)
Core services ex shelter +0.3% vs +0.554% prior
Core-CPI services ex-rent/OER +0.2% vs +0.404% prior

New York Fed: Credit card balances 8.1% higher than a year ago

US consumer credit data from the NY Fed

3.5% of debt in some kind of delinquency in Q3 vs 3.2% in Q2
Growth in incomes has outstripped growth in debt
Data suggests rising debt burdens are manageable
Total Q3 aggregate debt up 0.8% vs Q2 to $17.94 trillion

Cleveland Fed median CPI +4.1% y/y

Cleveland Fed underlying inflation data

The Cleveland Fed is out with its inflation tracker and the numbers show inflation flattening above 2%. In particular, median CPI was at 4.09%, up from 4.08% y/y last month. It’s only declined marginally since June, when it was at 4.15%.

The 16% trimmed mean (which includes the 16% of components with the most-extreme moves) is also showing signs of stickiness at 3.20% vs 3.16% a month ago.

US MBA mortgage applications W.E. 8 November +0.5% vs -10.8% prior

Latest data from the Mortgage Bankers Association for the week ending 8 November 2024

Prior -10.8%
Market index 192.4 vs 191.4 prior
Purchase index 133.3 vs 130.8 prior
Refinance index 506.0 vs 513.5 prior
30-year mortgage rate 6.86% vs 6.81% prior

BofA expect a 4% EPS benefit for S&P 500 equites from Trump corporate tax cuts

Equity tailwind

Via a Bank of America research note – analysts expect a 4% boost to forward earnings due to Trump’s corporate tax cut plans.

This will be a tailwind for equities, at the margin.

Fed’s Musalem: Recent info suggests inflation risks have risen

Comments from the St. Louis Fed President

Risks to the jobs market have remain unchanged or have fallen
Fed may be on the ‘last mile’ to price stability, inflation expected to converge to 2% over the medium term
Monetary policy well positioned, Fed can ‘judiciously and patiently’ judge income data to decide on further rate cuts
Strong economy on track for a ‘solid’ fourth quarter
Growth is broad-balanced and driven by consumption, income growth, productivity, supportive financial conditions and wealth effects
Recent high productivity could prove durably structural but that remains uncertain
Core inflation remain elevated
Pressure in services industries slowly abating
Data since prior meeting suggests economy may be materially stronger
Inflation data is also stronger but has not yet changed view that policy is on a path to neutral
There is likely space for a gradual easing of policy towards neutral rate
Stronger data likely pushing Treasury yields higher
Too soon to understand new administration
Rising bond yields also offer a sense of higher inflation risk and some sense the Fed may not cut as much

Fed’s Kashkari: CPI headline confirms the path we are on

Comments from the Minneapolis Fed President on Bloomberg TV

I haven’t had time to go through the CPI data in detail but on the headline level it seems to be confirming the path we’re on
There are still six weeks before the Fed’s next meeting with more data to come
I have confidence that inflation is headed in the right direction but we need to wait
Sometimes I’m frustrated by the dot plot because there is so much uncertainty
I have confidence that inflation is heading in the right direction
There is tremendous uncertainty about where the neutral rate
The longer the economy performs well, the more I believe that the neutral rate is higher
I think the labor market is in a good place
I still think the labor market is cooling
We’ve underbuilt housing for the last decade, we can’t fix housing
Monetary policy is the wrong tool to address asset bubbles

Fed’s Logan: Models show that Fed funds could be ‘very close’ to neutral

Comments from the Dallas Fed President

Fed will ‘most likely’ need more cuts but should ‘proceed cautiously’
If Fed cuts too far past neutral, inflation could re-acclerate
Difficult to know how many Fed rate cuts may be needed, and how soon they need to happen
Fed has made a great deal of progress in bringing inflation down
Fed not quite back to price stability yet
US economic activity is resilient
Labor market cooling gradually but not weakening materially
Sees upside risk to inflation, downside risk to employment, says financial conditions may pose biggest challenges for monetary policy
If bond yields continue to rise, the Fed may need less-restrictive policy

Amazon’s Bezos sells US$1.25bn of shares

Amazon’s Jeff Bezos sells US$1.25bn of shares.

filing posted on the firm’s website Tuesday
Bezos has sold a total of around $12.5 billion in 2024
during the latest selling round (from November 8 to 11, Bezos offloaded circa 6 million shares)

More precisely:

Bezos filed for the sale of 5.99 million shares of AMZN stock
for US$1,245,279,944.36 (pre-tax)

NY Fed Perli says there’s been more friction in money markets lately, repo rate rise orderly

Manager of the Fed’s System Open Market Account (SOMA)

The New York Federal Reserve branch’s Roberto Perli is manager of the Fed’s System Open Market Account (SOMA).

Recent quarter-end money market volatility not historically large.
Still strong evidence reserve levels remain abundant.
No imminent signs of issues for Fed to implement monetary policy.
Recent quarter-end pressure was contained.
Slow rise in repo rates has been orderly.
Standing repo facility stands ready to provide liquidity.
Notes there’s been more friction in money markets lately.

Commodities

Gold Faces 4th Consecutive Loss Amid Strong US Dollar and Stable Inflation Data

Gold Price Action
Gold is facing downward pressure for the fourth consecutive day, currently trading at $2,575.49, down $22.26 or -0.87%. After briefly rallying to $2,618.84 earlier in the session, the precious metal reversed lower, reflecting the market’s mixed outlook. A key technical level at the 100-day moving average near $2,540.36 could be the next significant support zone for gold.

US Dollar and Economic Data Impact
Gold’s retreat is largely driven by a firmer US Dollar, which reached a year-to-date high of 106.52 on the US Dollar Index. This strength is bolstered by expectations of a less dovish Fed amid steady inflation data. The US CPI rose 2.6% YoY, slightly higher than the previous 2.4%, and Core CPI matched expectations with a 3.3% annual increase. While the inflation data met forecasts, Fed Chair Powell’s speech and upcoming US Retail Sales reports will be closely watched for further clues on future Fed policy.

Fed’s Mixed View on Interest Rates
Federal Reserve officials are divided on the need for rate cuts, with some advocating for cautious easing. Minneapolis Fed President Neel Kashkari and Dallas Fed’s Lorie Logan indicated the need for lower borrowing costs, though the St. Louis Fed’s Alberto Musalem remained neutral on policy adjustments. Market expectations reflect these views, with traders anticipating about 23 basis points of Fed easing by the end of 2024, according to fed funds futures.

Technical Levels and Outlook
On the downside, gold has broken below a trendline connecting the February and August lows, reinforcing the bearish outlook. The 100-day MA at $2,540.36 and the September 18 low at $2,546.64 are critical support levels to watch. A sustained move below these levels could signal further downside pressure for gold.

Crude Oil Stalls Amid Bearish Outlook and Bearish Market Sentiment

Price Action
Crude oil remains under pressure, struggling to stay above the $68 mark for WTI, with prices hovering at $68.25 and Brent Crude at $71.92. Despite some support from the monthly OPEC report, which raised concerns about a fourth downward revision to global oil demand in 2025, there has been little upward momentum. The report failed to offer any substantial bullish triggers, leaving oil prices flat and unable to gain significant ground.

US Dollar and Inflation Outlook
The US Dollar Index (DXY), which tracks the Greenback against six other currencies, stalled after a brief uptick earlier in the day. Market attention is focused on the upcoming October CPI report, with any inflationary surprises potentially reducing expectations for a rate cut in December. Recent comments from Minneapolis Fed President Neel Kashkari emphasized that a December rate cut is not guaranteed, suggesting that the US central bank may proceed cautiously with its easing plans.

Oil Market Movers and Inventory Build
Crude oil inventories have seen an uptick, with data from Genscape showing a 1.1 million-barrel build in the Amsterdam-Rotterdam-Antwerp region, pushing stock levels to 51.7 million barrels as of November 8. The American Petroleum Institute (API) will release the latest US crude stockpile data, following a surprise build of 3.132 million barrels in the previous week, adding to the bearish sentiment.

In addition, Cnooc’s Huizhou Phase II refinery in China faced halts in production due to fluctuating production processes, further affecting supply dynamics. Meanwhile, the Abadan Oil refinery in Iran is working to stabilize its oil exports amid uncertainties around the Trump presidency, further contributing to the market’s cautious outlook.

Technical Outlook and Support Levels
With bearish pressures mounting and limited catalysts for upside movement, crude oil continues to test the $68 support level. A potential rebound seems unlikely unless there is a significant shift in the market sentiment or a bullish surprise in upcoming data. For now, oil remains stuck in a sideways consolidation pattern, with any substantial moves likely depending on external factors such as geopolitical developments or economic data releases.

Barclays on oil – current market dynamics relatively stable, doesn’t foresee major shifts

Barclays notes stable oil market dynamics despite Trump re-election uncertainty

Barclays has issued a note suggesting that the re-election of Trump is unlikely to significantly impact oil market fundamentals in the near term.

The bank believes that current market dynamics are relatively stable and does not foresee major shifts tied to potential changes in U.S. leadership.

Barclays is recommending a long position on December 2025 Brent call spreads. The bank notes that volatility has recently decreased, and it perceives market sentiment as overly focused on downside risks, or the “left tail.” In contrast, Barclays believes the risks are more balanced, especially in light of recent improvements in oil market fundamentals and the possibility of a more confrontational geopolitical landscape.

EU News

European Indices closes mixed

Gains or losses between 0.30% to -0.30%

The major European stock indices are closing the day makes with modest gains or losses:

German Dax -56.57 points or -0.30% at 18977.08.
France’s CAC -10.15 points or -0.14% at 7216.84
UK’s FTSE 100 +4.58 points or 0.06% and 8030.34.
Spain’s Ibex -21.90 points or -0.19% at 11360.50
Italy’s FTSE MIB +100.38 points or 0.30% at the 33707.51

looking at European yields, the benchmark 10 year yields are mixed and little changed:

Germany 2.380%, -1.6 basis points
France 3.137%, -3.6 basis points
UK 4.520%, -0.6 basis points
Spain 3.109%, +0.3 basis points
Italy 3.65%, -5.0 basis points

BOE’s Mann: Inflation has definitely not been vanquished

Remarks by BOE policymaker, Catherine Mann

Headline CPI reading not telling us that underlying inflation dynamics have been vanquished
Services inflation is pretty sticky
Energy prices are more likely to go up than down
Sees more volatility and upward bias to some inflation drivers
I describe myself as an ‘activist’ rather than a ‘gradualist’ on rates
An ‘activist’ approach means to cut less until it is clear inflation persistence has been purged
I would be ready to cut rates in bigger steps when inflation risks have gone

ECB’s Nagel: Core inflation rate is still quite high

Remarks by ECB policymaker and Bundesbank chief, Joachim Nagel

There are still noticeable price pressures, especially in services sector
Trump’s tariffs may cause German economy to contract
If tariffs come into effect, it could cost Germany 1% in economic output

ECB’s Villeroy says to expect more rate cuts

Remarks by ECB policymaker, Francois Villeroy de Galhau

Expects inflation to moderate in France
Expects French unemployment rate to go up to around 8% before falling back

ECB Interest Rate Forecast: Deutsche Bank’s 7 reasons for projecting a lower terminal rate

Deutsche Bank revises ECB terminal rate forecast to 1.50% (from 2.25%) – but may drop to 1.00%

Deutsche Bank has revised its forecast for the European Central Bank’s (ECB) terminal rate, lowering its central-case projection from 2.25% to 1.50%. The bank now anticipates the ECB’s policy rate will dip slightly below the neutral rate by the end of 2025, rather than returning to neutral by mid-year as previously expected.

This shift in outlook is driven by several factors, including the potential for new tariffs from a Trump administration, which would likely impact trade, along with weaker macroeconomic performance in Europe and the increasing risk of inflation falling below target.

According to Deutsche Bank, the uncertainty surrounding these dynamics is considerable, especially given the unclear timing and effects of U.S. tariffs and potential European responses. Reflecting this uncertainty, the bank has outlined a broad target range of 1.00% to 1.75% for the ECB’s terminal rate.

Deutsche Bank notes that the terminal rate’s trajectory and ultimate level will depend on key influences such as:

European fiscal policy,
the economic health of Germany,
developments in China,
and fluctuations in oil prices.

The bank further suggests that the global economy may be entering a new phase, with Europe potentially experiencing increasingly divergent economic conditions compared to the U.S.

Asia-Pacific-World News

Green shoots in China? Excavator sales grew 15% in October

Sales grew at a faster rate domestically

China-based Construction Machinery and Equipment (CME) with the data from earlier this week. In October China’s excavator sales are estimated to have reached 16,791 units:

that’s +15.1% y/y

More notably, excavator sales in the Chinese domestic market are estimated at 8,266 units

21.6% y/y
Excavator sales to the export market +9.46% y/y

For the January-October 2024 period this year, China’s excavator sales are estimated to have increased by 0.47 percent year on year

domestic market +9.8% y/y
export market -7.41% y/y

PBOC sets USD/ CNY mid-point today at 7.1991 (vs. estimate at 7.2305)

PBOC CNY reference rate setting for the trading session ahead

PBOC injects 233bn yuan via 7-day RR, sets rate at 1.5%

17bn yuan mature today
net injection is 216bn yuan

Australia – “Wage inflation is moderating as expected” – WPAC

Westpac on the wages data from Australia earlier

In brief from WPAC’s note:

September quarter Wage Price Index below the RBA’s expectation which pointed to a 0.9%qtr rise in both the September and December quarters of 2024
Wage inflation peaked at 4.3%yr in December 2023 and has been drifting lower through 2024
Wage Price Index (WPI) rose 0.8% (3.5%yr) … The RBA is currently forecasting annual wages growth to print 3.4%yr for end 2024 and hold at that rate through to June 2025.

Australia data – Wage Price Index for Q3 2024: +0.8% q/q (expected +0.9%, prior +0.8%)

Australian wage rises a bit slower than expected

Australia data – Wage Price Index for Q3 2024:

+0.8% q/q for the third consecutive quarter

expected +0.9%, prior +0.8%
Both the private sector and the public sector rose 0.8%, seasonally adjusted, for the quarter.

+3.5% y/y, lowest annual rise for the series since December quarter 2022 and followed four consecutive quarters of annual wage growth equal to or above 4%.

expected +3.6%, prior +4.1%

Japan PPI (October) +0.2% m/m (expected 0%) and +3.4% y/y (expected +3.0%)

The PPI is also referred to as the Corporate Goods Price Index, its published by the Bank of Japan.

Japanese wholesale prices, the PPI or CGPI:

+0.2% m/m

expected 0.0%, prior 0.0%

+3.4% y/y

expected +3.0%, prior +2.8%

Japan’s Seven & i Holdings is considering a management buyout

The firm is an operator of convenience stores

Japan’s Seven & i Holdings is considering a management buyout to take itself private with funding from banks, Itochu Corp. and the founding Ito family in a transaction that could be worth US$58 billion

“People with knowledge of the matter” cited in the reports via Nikkei and Bloomberg.

The Japanese owner of 7-Eleven is considering going private by buying back its own shares in a bid to avoid a takeover attempt by Canadian rival Alimentation Couche-Tard, the news report says.

Cryptocurrency News

Bitcoin Continues Rally, Is $100K Next?

Bitcoin Price Surge
Bitcoin’s bullish momentum shows no signs of slowing down, with the cryptocurrency climbing through major price levels in recent days. After crossing the $70,000 mark on November 5, the price quickly surged to $80,000 by November 10 and hit a fresh all-time high of $93,000 on November 12, breaking above its previous high of $90,243.

Key Support Levels
Currently, the $89,643 to $90,243 zone is acting as strong support, representing swing highs from Monday and Tuesday. As long as Bitcoin remains above these levels, the bulls maintain control. More conservative traders may keep an eye on the 50-hour moving average around $87,504, a level that provided support earlier in the day. If Bitcoin drops below this moving average, it could signal a shift in momentum, with both bulls and bears watching closely.

Post-Election Rally
The price action aligns with strong bullish sentiment following the post-election euphoria, driven by optimistic market sentiment and continued interest in Bitcoin as a hedge and store of value. Bitcoin’s rapid rise—from $80,000 to $90,000 in just two days—raises the question: Is the $100,000 mark within reach? With Bitcoin showing relentless momentum and accelerating growth, the potential for a push toward $100K continues to loom large.

Trump names Elon Musk, Vivek Ramaswamy to lead Department of Government Efficiency (DOGE)

Coin catches a bid

Trump statement (in summary):

Elon Musk and Vivek Ramaswamy will lead the newly created Department of Government Efficiency (DOGE).
Their mission is to dismantle government bureaucracy, reduce excess regulations, cut wasteful spending, and restructure federal agencies.
This initiative is part of the broader “Save America” movement.
Musk described this effort as potentially “The Manhattan Project” of the modern era, aimed at shaking up government systems.
The Department of Government Efficiency (DOGE) will operate outside of government but partner with the White House and Office of Management & Budget to drive large-scale reforms.
Their approach is to introduce a more entrepreneurial, efficiency-focused mindset within federal operations.
Musk and Ramaswamy’s work will target waste and fraud within the federal government’s $6.5 trillion annual spending.
The initiative aims for a more accountable, smaller government, aligned with the interests of “We the People.”
Their work is expected to conclude by July 4, 2026, symbolically marking the 250th anniversary of the Declaration of Independence.
The goal is a leaner, more efficient government as a “gift to America” on its milestone anniversary.

Ethereum’s Deflationary Trend May Spark Bullish Surge Toward $3,732

Ethereum Price Action
Ethereum (ETH) is currently trading around $3,220, down 2.5% on Wednesday. Despite the short-term dip, a significant shift in supply dynamics could provide the bullish momentum needed to push Ethereum towards its next target of $3,732.

Declining Supply and Deflationary Trend
Ethereum’s supply has entered a deflationary phase as the amount of ETH being burned has outpaced issuance in the past three days. Data from Ultrasound.money shows that the increased burn rate has helped reduce Ethereum’s circulating supply, a trend that could accelerate its bullish trajectory. This marks a turn from the inflationary supply dynamics that emerged after the March Dencun upgrade, which reduced transaction fees and ETH burns.

Increased Network Activity
Rising user engagement and higher gas fees following the US presidential election have driven an increase in ETH burns. As the supply continues to contract, the scarcity of ETH rises, making it more valuable and potentially attracting more investors. According to Leon Waidmann, Head of Research at Onchain Foundation, this deflationary trend has activated a “bullish flywheel,” where increased demand, burning, and price appreciation could create a positive feedback loop, pushing ETH’s value even higher.

Institutional Demand for Ethereum ETFs
Ethereum ETFs are also seeing rising institutional interest, with $649.3 million in net inflows over the past five days. This growing demand has sparked optimism that Ethereum ETFs will surprise the market in 2025. Matt Hougan, Chief Investment Officer at Bitwise, believes that these inflows will continue to grow, signaling strong institutional support for Ethereum. The recent purchase of Attestant, a non-custodial Ethereum staking provider, further bolsters this sentiment by highlighting Ethereum’s increasing appeal among institutional investors.

Target Levels and Technical Outlook
For Ethereum to rally towards $3,732, it needs to post a strong move above $3,307. Should ETH maintain its deflationary momentum, the combination of reduced supply and rising institutional demand could propel it to new highs.

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Round up of today’s market news

ByBilals Tech