Weekly News 2023/11/13-2023/11/17

 U.S. stocks closed slightly higher on Friday, with the Dow Jones Industrial Average closing slightly up 1.81 points, or 0.01%, at 34947.28 points; the Nasdaq Index rose 11.81 points, or 0.08%, to 14125.48 points; the S&P 500 Index rose 5.78 points, or 0.13%, reported 4514.02 points. All three major U.S. stock indexes recorded gains this week, with the Dow Jones Industrial Average rising 1.94%, the S&P 500 Index rising 2.24%, and the Nasdaq Composite Index rising 2.37%. U.S. stocks performed well in the first half of November. So far in November, the S&P 500 has risen 7.64%, the Dow has risen 5.73%, and the Nasdaq has risen 9.92%.

U.S. inflation data released this week gave investors hope that the worst of inflation is over and the Federal Reserve will change its hawkish monetary policy stance. The October consumer price index (CPI) released by the United States on Tuesday remained unchanged and the core inflation rate increased by 0.2%. Both data were lower than expected. Meanwhile, the Producer Price Index (PPI) posted its biggest drop in three-and-a-half years on Wednesday. Other data released this week showed that U.S. retail sales fell for the first time in seven months in October, while signs of cooling in the U.S. job market continued to grow, with the number of people filing for unemployment benefits rising to a three-month high last week.

In addition, data this week also showed that U.S. industrial output fell by 0.6% in October, builder confidence in November fell to the lowest level since December 2022. The above-mentioned data all point to the risk of declining economic growth, making the market increase bets that the Federal Reserve's interest rate hikes have ended and that interest rates will be cut next year.

 Microsoft (NASDAQ: MSFT) released a new support document on Thursday confirming that it will bring its artificial intelligence assistant Copilot to Windows 10. The company says that Copilot in Windows 10 will be functionally similar to Windows 11, and many plug-ins will be cross-compatible between Windows 10 and Windows 11, but there will still be some specific plug-ins and features that will only work with Windows 11. The feature will first roll out to users in North America and “parts of Asia and South America before rolling out to other countries over time.”

Google (NASDAQ: GOOGL) CEO Pichai said that all countries should have the same motivation to solve the safety issue of artificial intelligence (AI) technology; it is necessary to implement global regulation for AI similar to that for climate change. ;AI regulation should not hurt small businesses.

Berkshire Hathaway (NYSE: BRK.A) is in the spotlight. Charlie Munger recently talked about the recent rumors that “Buffett used his personal account to trade the same stocks as Berkshire” in an interview, and responded that it was “ridiculous.” He said that Buffett donated all his money, which shows that he does not take the money seriously.

TSMC (NYSE: TSM) has received orders for artificial intelligence (AI) chips from major cloud service providers (CSPs), including Microsoft's 5nm chip orders. Sources said that whether it is the last wave of self-developed chips for smartphones or the next generation of self-developed AI chips, TSMC is a beneficiary of the relevant supply chain. Microsoft's data centers are expected to use both Arm CPUs and dedicated AI accelerators in early 2024, both of which are manufactured based on TSMC's 5nm production process.

 Expectations of U.S. regulators approving a Bitcoin ETF have fueled a sustained rally that has pushed the world's largest cryptocurrency to nearly $38,000, a level last seen in May 2022. The world's largest cryptocurrency gained about 6% during the Nov 15 trading session.

Steady trading has also spread to the ETF space. The First Trust SkyBridge Crypto Industry & Digital Economy ETF CRPT and Simplify Bitcoin Strategy PLUS Income ETF MAXI stole the show, rising 9% and 8% respectively on the day. Second, the Blockchain and Bitcoin Strategy ETF BITS, the ProShares Bitcoin Strategy ETF BITO, and the Bitwise Bitcoin Strategy Optimum Roll ETF BITC are all up at least 7%.

A combination of factors, including anticipation of regulatory approval of a Bitcoin ETF, growing institutional interest, and the continued bullish trend in the cryptocurrency market, are driving increased demand and valuation for Bitcoin. The surge has reignited interest in the cryptocurrency market, indicating positive sentiment among retail and institutional investors.

While the U.S. Securities and Exchange Commission has delayed its decision to approve the first Bitcoin ETF to directly invest in Bitcoin, Bloomberg Intelligence predicts that a batch of such funds may be approved in January. Such a development would not only legitimize Bitcoin in the eyes of mainstream investors but also provide easier access to investment, potentially attracting new capital to the cryptocurrency market.

Cryptocurrency gains are also driven in part by the belief that the Federal Reserve is nearing the end of its rate hike cycle, especially after the latest inflation data. Analysts are now betting that there will be no more interest rates in the future, which could push Bitcoin prices to $44,000 before a spot Bitcoin ETF is approved.

 A lower U.S. dollar index and lower U.S. Treasury bond yields provided support for precious metals. Gold prices edged higher in the U.S. market on Friday.

Gold's near-term technical posture has improved this week, which has attracted buying from the bulls. Gold prices climbed to a two-week high of $1,993.42 per ounce during the Eurasian session on Friday and will see its first weekly rise in three weeks. However, it rebounded after falling below 1980 in early trading in the US market.

Risk appetite among traders and investors has been boosted this week, as evidenced by U.S. stock indexes hitting multi-week highs. After release U.S. inflation data earlier this week, markets now expect the Federal Reserve to have completed its rate hike cycle. There is growing consensus that the Fed will lower interest rates further in the spring. Lower global interest rates have been a boon for metals, pointing to improved consumer and business demand amid falling borrowing costs.

Market analyst Carlo Alberto De Casa said that overall, investors are optimistic about gold as they bet on no further U.S. interest rate hikes and expect the Federal Reserve to take a dovish stance in 2024. Lower interest rates reduce the opportunity cost of holding gold, a non-yielding asset used as a hedge against inflation. Markets are now pricing in a rate cut as early as May next year after data showed inflation slowing.

Analyst Christopher Lewis said that gold prices are approaching the $2,000 area, which is an area that may cause significant resistance. In this case, I think it's more likely that we'll continue to try to carve out some type of trading range, which makes sense given that the bond markets in the U.S. continue to offer higher rates even though they've fallen previously.

 Oil prices rose 4% on Friday after a week-long sell-off, but fell for a fourth straight week. It rebounded from four-month lows hit on Thursday as investors in short positions took profits while U.S. sanctions on some Russian oil shippers provided support. WTI December crude oil futures closed up $2.99/barrel, or 4.1%, to $75.89/barrel, down 1.66% this week. The settlement price of Brent crude oil futures closed up $3.19/barrel, or 4.12%, to $80.61/barrel.

Oil prices have fallen sharply over the past few weeks due to supply concerns and a significant drop in demand, but benchmark futures rebounded significantly on Friday and are likely to continue the trend next week given the ongoing political situation and macroeconomic issues. The monthly spread between the two contracts has shifted into contango, which indicates that near-term prices are lower than those in the coming months, indicating that the market is well supplied.

Some of the losses were offset this week after the United States imposed sanctions on shipping companies and ships that sell Russian oil above G7 price caps. Still, both benchmarks ended the week down more than 1%, marking a fourth straight weekly decline, weighed down by rising U.S. crude stockpiles and continued record-high production.

U.S. oil producers have been cutting the number of active rigs for nearly a year due to weak oil prices. Energy services company Baker Hughes said the number of oil rigs increased by six this week, the highest level since February. The total number of U.S. rigs drilling for oil increased for the first time in three weeks. “When prices fall significantly, producers will think twice before moving forward with capital expenditures and projects,” said Phil Flynn, analyst at Price Futures Group.

 The U.S. dollar index continued its downward trend and fell below the 104.00 range, now trading at 103.92, a decrease of 0.46%, and a decrease of approximately 1.60% this week. USD, Fed's reaction is driving markets today. The dollar ended the week lower and is on the verge of testing four-month lows on dovish bets on the Federal Reserve. Weak U.S. inflation data and weak economic activity data were the main reasons for the dollar's decline. The U.S. dollar weakened throughout the week on expectations that the Federal Reserve would stop raising interest rates as the U.S. economy showed signs of inflationary pressures and the labor market cooled.

Investors continue to digest data reported this week. The U.S. Bureau of Labor Statistics reported that the core Consumer Price Index (CPI) for October fell short of market expectations. The overall data increased by 3.2% year-on-year, lower than the market consensus. In addition, the core producer price index (PPI) in October was worse than expected. On the other hand, retail sales in October were better than expected. In the week ended November 11, the number of people filing for unemployment benefits in the United States increased to 231,000, exceeding expectations. U.S. industrial production fell short of expectations, falling 0.6% month-on-month, higher than expected. Next week, the United States will release October durable goods data and November S&P PMI data.

USD/CAD is currently at 1.37157, down 0.28%. USD/CAD is down about 0.5% this week. Canadian industrial inflation data came in better than expected. The Canadian dollar rebounded on risk appetite. After experiencing its biggest decline in nearly two months on Thursday, CAD/CNY continued its decline on Friday, falling to a six-month low and now trading at 5.2564, down 0.15%.

OnePro Special Analyst

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