MHMarkets：December 01 2023--Fundamental Reminder

09:45 CNY Caixin Manufacturing PMI(NOV)

22:45 USD Markit Manufacturing PMI Final (NOV)

23:00 USD ISM Manufacturing PMI(NOV) & USD Construction Spending MoM (OCT)

The next day at 00:00, Fed Chair Powell will have a fireside chat;

The next day at 03:00, Fed Chair Powell and Fed Governor Lisa Cook speaks on technological innovation.

MHMarkets Market Overview

Review of Global Market Trend

The dollar index extended gains and held above the 103 mark on Thursday, rising as high as 103.58 before closing 0.66% higher at 103.51, still marking its worst monthly performance in a year, despite data showing U.S. inflation and the labor market continued to slow. Treasury yields rebounded, with the 10-year yield back above the 4.3% mark at last close at 4.330%. The yield on the two-year Treasury note, which is more sensitive to the Fed's policy rate, rose sharply in U.S. trading and briefly rose above 4.7%, but failed to hold ground and closed at 4.695%.

Spot gold fell below the 2040 mark and fell to an intraday low of $2,031.79 before closing down 0.37% at $2,036.27 an ounce, possibly as the dollar and Treasury yields rose to pressure on gold. Spot silver and gold had mixed moves. Although it dipped below the $25 mark several times during the session, it surged higher and rose more than 1% in the U.S. session to end up 1.01% at $25.27 an ounce.

As the market was less convinced that Opec + would reach the scale of its announced cuts, crude fell off a cliff. WTI crude plunged sharply in U.S. trading hours, falling as much as 3% and falling to an intraday low of $75.02 before closing down 2.70% at $75.57 a barrel. Brent crude fell nearly $4 a barrel and returned to near $80 before ending down 2.69% at $80.39 a barrel.

The three major U.S. stock indexes were divided, with the Dow Jones Industrial Average up 1.47%, the Nasdaq down 0.23% and the S&P 500 up 0.38%. The S&P 500 rose 8.9% in November, its biggest monthly gain since July 2022. Tesla (TSLA.O) fell 4%, while Nvidia (NVDA.O) fell 2.7%. The Nasdaq China Golden Dragon Index closed up 0.08%, with Alibaba (BABA.N) up 0.27% and Pinduoduo (PDD.O) up 4% to surpass Alibaba in market value at the close.

Major European stock indexes were mixed. Europe's Stoxx 50 index closed up 0.27%, Germany's DAX30 index gained 0.3% and Britain's FTSE 100 index gained 0.41%.

Market Focus

1, the US core PCE annualized rate came in at 3.5% in October, in line with expectations, the lowest since April 2021.

2. San Francisco Fed President Daly said it is too early to judge whether the Fed has finished raising interest rates and is not considering cutting rates at all. New York Fed President John Williams thinks rates are at or near their peak and inflation is stubborn and may need to rise again.

3. Us Treasury Secretary Janet Yellen said that she did not see the need for further aggressive monetary tightening and that the US would be well on its way to a soft landing.

4. Opec + members each announced “voluntary” production cuts during Q1 next year, with a total scale of 2.193 million barrels per day, among which Saudi Arabia and Russia cut production by 1 million barrels and 500,000 barrels respectively. Angola refused to comply with production quotas, and Brazil will join Opec + in January next year, with the next general meeting scheduled to be held on June 1 next year.

5. Hamas agrees to extend the cease-fire to a seventh day; The Israeli army said it would continue the ceasefire, but did not say for how long.

6. The preliminary annual CPI rate in the eurozone came in at 2.4% in November, down from 2.9% in the previous month. Price pressures continued to ease in almost all categories and remained at two-year lows. Markets expect the ECB rate hike cycle may be over.

7. Former U.S. Secretary of State Henry Kissinger has died at the age of 100.

Institutional Perspective

01

Morgan Chase

【Morgan Chase：AI tools are already generating revenue and expect more in the future!】

Morgan Chase, the largest U.S. bank, said that artificial intelligence (AI) tools have started to generate revenue for the bank, and future advances in the field could bring more benefits.

Teresa Heitsenrether, the bank's chief data and analytics officer, said Wednesday that “in addition to efficiency gains and potential cost avoidance, we are also seeing revenue-generating activity, which is really encouraging.” Jpmorgan last year set a goal of $1bn in “business value” created by AI in 2023, and raised that to $1.5bn at its investor day in May. According to Heitsenrether, that revenue comes from personalizing recommendations to customers in the credit card business and providing insights to customer coverage teams.

02

TD securities

【TD securities：Gold will rise to $2,100 in the second quarter of next year!】

In its 2024 gold outlook, TD Securities commodity analysts said they expect gold prices to average around $2,019 an ounce this year. While TDS is bullish on gold heading into the New Year, they also warn investors need to be patient. Analysts expect gold to rise to $2,100 by the second quarter of next year.

03

Interactive Brokers

【Interactive Brokers：Weak economic data could send markets higher if Powell makes more dovish comments】

Jose Torres, an analyst at Interactive Brokers, thinks weak economic data could send markets higher if Mr. Powell makes more dovish comments. However, the recent progress offers only a moderate window of optimism, as Powell has emphasized that the Fed wants to see evidence of a prolonged slowdown in inflation before the central bank begins aggressively cutting interest rates.

“If he stays hawkish and dismisds hopes of a rate cut early next year, then today's data could just resemble a surprisingly warm day in February, giving the illusion of spring, when in fact it could just be a brief spell of good weather with the cold winter days still to come. Similarly, pessimism about possible rate cuts early next year could spark market volatility if Powell maintains a hawkish stance.”