Source: Wall Street See

On the eve of Thanksgiving and Christmas holiday sales season, the U.S. economic data is mixed. Thanks to cooling inflation and the highest consumer spending of the year, the actual Q3 GDP annualized quarter-on-quarter growth rate was 2.8% unadjusted, but core PCE inflation for Q3 was revised down to 2.1%, slightly below expectations. The job market cooled off, with the U.S. initial jobless claims remaining low last week, but the continuing claims for unemployment benefits reached the highest since November 2021.

Rising service prices helped drive the Fed's favorite inflation indicator to its highest level since April, with U.S. core PCE inflation increasing by 2.8% year-on-year in October. In addition, October durable goods data fell short of overall expectations, narrowing October's trade deficit in goods, the U.S. housing market leading indicator of pending home sales in October hit a seven-month high month-on-month, while the disappointing Chicago PMI. Market expectations for a 25 basis point rate cut by the Fed in December increased from 59.4% to 66.5%. The 7-year U.S. Treasury auction was strong, and U.S. bond yields continued to decline.

Internationally, the European Parliament voted to approve the new members of the European Commission, who will take office on December 1. Isabel Schnabel, a senior official at the ECB, warned that the central bank should gradually implement loose monetary policy, as excessive easing could waste 'valuable policy space'. Subsequently, the market reduced expectations of an ECB rate cut by the end of the year, German two-year bond yields reversed gains, and the euro briefly rose by 0.5% to a one-week high. The Reserve Bank of New Zealand cut rates by 50 basis points to 4.25% as expected, and hinted at a further 50 basis point rate cut in February next year.

Looking ahead, due to Thanksgiving, there will be no release of U.S. economic data for the remainder of this week, and no speeches from Federal Reserve officials.

Wednesday was the eve of Thanksgiving holiday, the last full trading day of November, with U.S. stocks broadly declining. Affected by a series of disappointing earnings reports from technology and software companies like Dell, HP, and CrowdStrike, the Nasdaq and Nasdaq 100 fell nearly 1%, the Nasdaq 100 briefly dropped nearly 1.5% after the intra-day PCE inflation data was released. Small-cap stocks initially performed well but subsequently erased almost all their gains. All sectors saw mixed results, with technology stocks lagging significantly and consumer discretionary performing poorly. The China concept index briefly rose nearly 3%.

• The three major U.S. stock indices all fell. The S&P 500 Index closed down 22.89 points, a decline of 0.38%, at 5998.74 points. The Dow, closely tied to the economic cycle, closed down 138.25 points, a decline of 0.31%, at 44722.06 points. The tech-heavy Nasdaq fell 115.10 points, a decline of 0.60%, at 19060.48 points. The Nasdaq 100 Index fell 0.85%. The Nasdaq technology market cap weighted index (NDXTMC), which measures the performance of Nasdaq 100 technology stocks, fell 1.12%. The Russell 2000 small-cap index, more sensitive to the economic cycle, rose 0.08%. The fear index, VIX, remained unchanged at 14.10.

• Most U.S. industry ETFs closed lower. The technology sector ETF fell 1.35%, the semiconductor ETF dropped 1.31%, the global technology stock index ETF declined 1.1%, the internet stock index ETF fell 0.86%, the consumer discretionary ETF, regional bank ETF, bank ETF, and energy sector ETF fell up to 0.49%, while the medical sector ETF rose over 0.5%, and the biotechnology index ETF increased by 0.97%.

• Among the 11 sectors of the S&P 500 Index, most fell. The information technology/technology sector fell 1.19%, consumer discretionary dropped 0.69%, industrials declined 0.36%, energy fell 0.10%, materials decreased 0.09%, utilities dropped 0.02%, telecom fell 0.01%, consumer staples rose 0.07%, financials increased 0.26%, medical care grew 0.47%, and real estate rose 0.67%.

• In terms of investment strategy, JPMorgan has changed its bearish position on the S&P 500 Index after two consecutive years, predicting an 8% rise in the index by 2025 (compared to Tuesday's closing level of 6021.63 points), with a target of 6500 points, which is 55% higher than the previously projected 4200 points in the past two years. Meanwhile, JPMorgan expects the polarization of the U.S. stock market to continue into the first half of 2025, as investors will need to digest the potentially increasing trade uncertainties. Driven by technology stocks and the AI boom, the U.S. stock market will continue to lead relative to other global markets in 2025, unless geopolitical and trade policy risks ease.

• The "Seven Sisters of Technology" all dropped. Tesla closed down 1.58%, Nvidia fell 1.15%. Google A rose 0.07%. Apple closed down 0.06%, IDC forecast data shows that although the overall smartphone shipments grew by 6.2% this year, Apple's growth is negligible, with iPhone sales only increasing by 0.4%. Meta closed down 0.76%. Amazon fell 1.02%. Microsoft dropped 1.17%, and at the end of the session, Microsoft plummeted as U.S. antitrust regulators launched a broad investigation into Microsoft, involving AI products among others.

• Chip stocks generally declined. The phlx semiconductor index dropped 1.51%, closing at 4853.01 points. The industry etf SOXX decreased by 1.34%. The nvidia leveraged etf fell by 2.32%. Micron technology declined by 3.54%, marvell technology by 3.26%, broadcom by 3.08%, arm holdings by 2.45%, intel by 1.66%, taiwan semiconductor by 1.44%, as the company suddenly canceled the completion ceremony of its US factory originally scheduled for early December, due to unclear semiconductor policies from elected president Trump. Applied materials decreased by 1.09%, amd by 1.07%, on semiconductor by 0.66%, qualcomm by 0.34%, asml holding by 0.22%, kla corp increased by 0.11%, while wolfspeed rose by 0.56%.

• AI concept stocks had mixed performance. Serve robotics declined by 2.16%, dell technologies fell by 12.25%, despite the company exceeding profit expectations and having an optimistic outlook for its AI business, its revenue and guidance fell short of expectations. C3.ai increased by 0.08%, palantir rose by 0.47%. Crowdstrike dropped by 4.59%, as HSBC downgraded Crowdstrike's rating from buy to hold, with a target price of $347. Oracle fell by 4.03%, while BigBear.ai increased by 1.42%, nvidia's AI voice company soundhound AI rose by 3.55%, super micro computer rose by 1.86%, snowflake increased by 1.41%, and bullfrog AI gained 0.47%.

• China concept stocks generally rose. The nasdaq golden dragon china index increased by 2.82%. Among etfs, the china internet index etf (KWEB) rose by 3.27%, the china technology index etf (CQQQ) rose by 3.81%, the ftse china 3x leveraged etf (YINN) rose by 7.95%, and the ftse china 3x inverse etf (YANG) fell by 7.93%. The ftse A50 futures settled up 0.14%, closing at 13262.000 points.

• Among popular china concept stocks, baidu rose by 1.57%, as jpmorgan downgraded baidu group ADR from 'overweight' to 'neutral', with a target price of $87. Meituan ADR rose by 7.21%, ideal automobile rose by 6.78%, zhihu rose by 6.67%, miniso rose by 6.26%, jd.com rose by 5.26%, daqo new energy rose by 4.94%, tiger brokers rose by 4.91%, xiaomi group ADR rose by 4.68%, xpeng motors rose by 4.57%, bilibili rose by 4.43%, mengniu dairy ADR rose by 3.32%, vipshop rose by 3.27%, tencent ADR rose by 2.14%, alibaba rose by 1.66%, NIO rose by 1.62%, new oriental rose by 1.6%, and fangdd network rose by 1.54%.

• Bitcoin futures briefly rebounded above $0.097 million, and cryptos generally increased. Hut 8 rose by 16.5%, Cipher Mining rose by 14.56%, TeraWulf rose by 10.96%, riot platforms rose by 10.74%. Canaan increased by 1.11%, the crypto digital currency exchange giant Coinbase rose by 6.03%, and the short-seller targeted 'big bitcoin holder' microstrategy rose by 9.94%, while the crypto 'meme stock' ideanomics fell by 19.96%.

• Among other key stocks: (1) hp inc (HPQ) fell by 11.36%, as the company released its performance report, and its profit guidance fell short of expectations. (2) Automation technology company symbotic (SYM) dropped by 35.86%, due to financial accounting errors leading to downgraded performance guidance. (3) Solar stock solaredge (SEDG) increased by 8.55%, as the company laid off about 12% of its staff after writing down $1 billion in losses. (4) Applied therapeutics (APLT) fell by 16.06%, at one point dropping over 84% in after-hours trading, as the company received a 'complete response letter' from the FDA, indicating that the NDA for govorestat was lacking clinical descriptions and could not be approved in its current form.

Investors continue to assess the possible impact of Trump's tariff plan, accelerating US inflation, on the Fed's slowing interest rate cuts, leading to a second consecutive day of declines in European stock markets. With the exception of telecommunications, food and beverage, utilities, and financial services, all sectors saw declines:

• The pan-european stoxx 600 index closed down 0.19%, at 504.96 points. The eurozone stoxx 50 index fell by 0.61%. The ftse pan-european leaders 300 index decreased by 0.61%.

• The italy ftse mib index closed down 0.23%. The united kingdom ftse 100 index closed up 0.20%. The german dax 30 index closed down 0.18%. The france cac 40 index closed down 0.72%. The spain ibex 35 index closed down 0.33%. The netherlands aex index closed down 0.08%.
  

Boosted by strong US economic data and the pre-Thanksgiving 7-year treasury auction, medium to long-term US bond yields generally fell, with the 10-year yield dropping over 5 basis points to a three-week low. After the US PCE was announced in early trading, stock yields briefly rebounded. Investors are keeping an eye on the French budget, as sovereign bond yields in Europe are generally falling:

• U.s. treasuries: at the end of trading, the u.s. 10-year benchmark treasury yield fell 5.45 basis points to 4.2517%, trading in a range of 4.3082%-4.2246% during the day. The two-year treasury yield fell 3.71 basis points to 4.2189%, trading in a range of 4.2519%-4.1880%, remaining in a downward trend throughout the day.

• European bonds: at the close of the european market, the eurozone benchmark german 10-year treasury yield fell 2.7 basis points to 2.160%, remaining in a downward trend throughout the day. The two-year german bond yield rose 1.6 basis points to 2.035%. The uk 10-year treasury yield fell 5.8 basis points. The two-year uk bond yield fell 2.7 basis points. The france 10-year treasury yield fell 2.8 basis points. The italy 10-year treasury yield fell 5.5 basis points.

As month-end capital flows set the tone, the u.s. dollar fell about 0.9% to a two-week low, retreating about 2% from last week's two-year high. Non-u.s. currencies widely rose, benefiting from bets on a rate hike in japan in december and position adjustments, with the yen climbing towards the 150 level to its highest in five weeks. The euro rose to a week-high due to comments from european central bank officials. Bitcoin futures rose over 5% to regain above $0.096 million, while ethereum futures rose over 9%.

• USD: The US Dollar Index DXY fell by 0.88%, to 106.072 points, with an intraday trading range of 106.924-105.856 points, remaining in a downtrend throughout the day, breaking the earlier sideways consolidation at 14:00 Beijing time and continuing to oscillate downward, hitting a daily low at 01:21. The Bloomberg Dollar Index fell by 0.65%, to 1279.63 points, with an intraday trading range of 1287.89-1277.72 points.

• Non-u.s. currencies: the euro rose 0.74% against the u.s. dollar to 1.0567, the british pound rose 0.88% against the u.s. dollar to 1.2680, the u.s. dollar fell 0.51% against the swiss franc to 0.8820; among commodity currencies, the australian dollar rose 0.35% against the u.s. dollar, the new zealand dollar rose 1.05% against the u.s. dollar, and the u.s. dollar fell 0.18% against the canadian dollar. The swedish krona rose 0.73% against the u.s. dollar, and the norwegian krone rose 0.89% against the u.s. dollar.

• Hsbc expects the euro to fall below parity against the u.s. dollar by the end of 2025, with rising unemployment potentially hindering the eurozone's consumption recovery, despite the french unemployment rate being at a 42-year low, economic slowdown may lead to a significant rise in unemployment.

• Japanese Yen: The Japanese Yen rose 1.27% against the US dollar at the end of trading, at 151.14 yen, with an intraday trading range of 153.23-150.46 yen, experiencing fluctuations throughout the day.

• Offshore Renminbi (CNH): The offshore renminbi (CNH) rose 129 points against the US dollar at the end of trading, at 7.2449 yuan, trading overall within the range of 7.2698-7.2422 yuan during the day.

• Cryptocurrency: The largest leading cryptocurrency Bitcoin futures rose 5.13% at the close, reaching $96,354.50, trading between $91,508.12 and $97,361.05 intraday. After a brief drop of over $4000 on Tuesday, the spot trading price of Bitcoin in the U.S. stock market surged above $0.097 million in the closing, up over $6,000 from the intraday low, a rise of over 7%. The second-largest Ethereum rose 9.68% at the close, reaching $3,652.00, trading between $3,307.50 and $3,657.50 intraday.

In market assessment, the ceasefire in Lebanon, crude oil inventory increase lower than expected, and this Sunday's OPEC+ meeting, the organization may delay production increase plans. On Wednesday, U.S. oil closed slightly lower, while Brent oil remained roughly stable. The EIA weekly report shows that last week's U.S. natural gas inventories did not decrease as much as expected, resulting in a drop of over 7% in New York natural gas.

• US Oil: WTI January crude oil futures closed down $0.05, a decrease of 0.07%, at $68.72 per barrel. US oil continued its earlier gains, with US pre-market trading peaking nearly 0.9% approaching $69.40, before consistently declining, with US stocks hitting a low nearly down 0.9%, breaching $68.20 at midday.

• Brent Oil: Brent January crude oil futures closed up $0.02, an increase of about 0.03%, at $72.83 per barrel. Brent oil continued its earlier gains, with US pre-market trading peaking nearly 0.8% approaching $73.40, before consistently declining, with US stocks hitting a low down over 0.7%, breaching $72.30 at midday.

• On the news front, data from the U.S. Energy Information Administration (EIA) showed a decrease of 1.844 million barrels in U.S. EIA crude oil inventories last week, lower than the analysts' expected drop of 0.42167 million barrels. Gasoline inventories according to EIA last week increased by 0.314 million barrels, while analysts had anticipated a decrease of 0.1 million barrels.

• Natural Gas: NYMEX December US natural gas futures fell over 7.58%, closing at $3.2040 per million British thermal units. Europe’s benchmark Dutch TTF natural gas futures dropped 0.12%, closing at €46.545 per megawatt-hour. ICE UK natural gas futures fell 1.77%, closing at 116.200 pence per kilocalorie. According to the US Energy Information Administration (EIA), US natural gas inventories declined by 2 billion cubic feet last week, with a week-on-week decrease of 0.05%, to 3.97 trillion cubic feet.

Unexpected rise in US inflation dampened interest rate cut expectations, causing gold stocks to narrow earlier gains in the morning. However, supported by a weaker dollar reaching a two-week low, both futures and spot gold closed higher on Wednesday, bouncing back from a week-long low.

• Gold: COMEX gold futures rose 0.56% at the close, priced at $2636.00 per ounce, maintaining an upward trend throughout the day, with a trading range of $2627.20 to $2657.90. Spot gold continued to rise during the day, reaching a daily high with an increase of over 0.9%, approaching $2660. After the release of the US GDP data, it dipped when the Fed-favored PCE inflation indicators were released at 23:00 Beijing time.

• Silver: COMEX silver futures fell 1.04% at the close, priced at $30.090 per ounce. Spot silver continued its earlier gains, reaching a pre-market peak in European stocks of nearly 0.9%, surpassing $30.70, then continued to decline, dropping over 1.5% below the $30 mark at midday in US stocks, and closed down 1.19%, priced at $30.0805 per ounce.

• London industrial metals had mixed results: Copper in London rose by $20, priced at $9020 per ton. COMEX copper futures gained 0.48%, priced at $4.0685 per pound. Zinc in London rose by $56, up 1.82%, priced at $3132 per ton. Aluminum in London fell by $17, priced at $2596 per ton. Lead in London rose by $36, up 1.78%, priced at $2056 per ton. Nickel in London fell by $113, priced at $15883 per ton. Tin in London fell by $954, decreasing by about 3.31%, priced at $27950 per ton. Cobalt in London remained flat, priced at $24300 per ton.

• Arabica coffee futures continue to rise, reaching the highest level since 1977.

Editor / jayden