Weekly News 2023/11/27-2023/12/01

 U.S. stocks closed higher on Friday. The Dow rose 294.61 points, or 0.82%, to 36245.50 points; the Nasdaq rose 78.81 points, or 0.55%, to 14305.03 points; the S&P 500 index rose 26.83 points, or 0.59%, to 4594.63 point. All three major U.S. stock indexes posted gains for the fifth consecutive week this week. The Dow rose 2.42% this week, the S&P 500 rose 0.77%, and the Nasdaq rose 0.38%. The Dow and S&P 500 both hit their highest closing records so far in 2023. Powell tried to minimize market expectations for a rate cut. However, the market believes that the Fed's interest rate hikes are over, and its statement that it will “maintain high interest rate policies for a longer period of time” is a bluff.

Powell said he is committed to maintaining tightening policy until inflation is on track to 2%; to achieve the inflation target, recent progress in core inflation must continue; it is too early to speculate when policy will be relaxed. Powell even said that the Fed is ready to further tighten monetary policy if the time is right.

ING Economics said in a report released on Thursday that the U.S. economy is showing clear signs of slowing down, which means the Federal Reserve will cut interest rates at least six times in 2024. The futures market currently suggests that the Federal Reserve will cut interest rates by 125 basis points next year.

In the past November, all three major U.S. stock indexes recorded large gains. The Dow Jones Industrial Average rose 8.77%, recording its largest monthly increase since October 2022. The Nasdaq rose 10.7% and the S&P 500 rose 8.92%, both recording their best monthly performances since July 2022. Additionally, the S&P 500 posted its largest November gain since 1928.

 On Thursday, Tesla's (NASDAQ: TSLA) electric pickup truck Cybertruck finally started its first batch of deliveries at the Texas Gigafactory in the United States and officially announced the price. The Cybertruck is priced at US$60,990, US$79,990, and US$99,900 respectively without discounts. That's significantly higher than the $39,990 starting price proposed when the car debuted in 2019.

AMD (NASDAQ: AMD) is about to launch a high-performance AI GPU to compete with Nvidia A100/H100 - MI300 series chips. Wall Street analysts are generally bullish on AMD's stock price, and its bullish power is far stronger than that of established chip companies Intel.

Nvidia (NASDAQ: NVDA) CEO Jensen Huang emphasized that the global transition to the era of artificial intelligence has just begun. He believes that GPU-accelerated computing, which accelerates specific tasks by breaking them down into smaller parts and parallelizing them becoming dominant.

Apple (NASDAQ: AAPL) and Paramount Worldwide (NASDAQ: PARA) have reportedly discussed bundling their streaming services at a discounted price. The two companies have discussed offering a combined Paramount+ and Apple TV+ product that would be cheaper than subscribing to the two services separately.

Google (NASDAQ: GOOGL) has applied to the UK‘s Competition and Markets Authority (CMA) to request action against Microsoft on the grounds that Microsoft’s business practices make competition the opponent is at a significant disadvantage. Microsoft (NASDAQ: MSFT) and Amazon (NASDAQ: AMZN) have reportedly come under global scrutiny for their dominance of the cloud computing industry, with regulators including the UK, EU and US scrutinizing their market power. Britain's antitrust regulator, the CMA, began an investigation into the country's cloud computing industry in October after media regulator Ofcom highlighted the dominance of Amazon and Microsoft in the market.

 Shares of cryptocurrency miners and Bitcoin trackers rose on Friday as the world's largest cryptocurrency extended recent gains, hitting a near 19-month high as risk appetite improved. Bitcoin rose 1.6% to $38,337, having been rising since October on optimism that potential approval of spot exchange-traded funds could unlock more capital investment in the digital asset space.

As 2023 comes to an end, whether Bitcoin, which has doubled in price, can break through $40,000 has become the biggest concern of many cryptocurrency speculators. Since the cryptocurrency crash in 2022, the largest cryptocurrency has rebounded by about 130% in the past 11 months, surpassing investments such as stocks or gold. Hopes for the Federal Reserve to cut interest rates next year and expectations that the United States will soon approve the listing of the first spot Bitcoin ETF have stimulated strong optimism in the market. Bloomberg Intelligence predicts that a group of U.S. spot Bitcoin ETFs will receive approval from the U.S. Securities and Exchange Commission (SEC) by January next year.

Bitcoins rally has come amid increased regulation of the cryptocurrency industry in the U.S., with Sam Bankman-Fried jailed for fraud at FTX. For optimists, efforts to curb questionable practices within the industry and the recent flurry of ETF applications indicate that the cryptocurrency industry is maturing and has the potential for wider adoption.

Senior financial markets analyst Fiona Cincotta said: “(Bitcoin) reaching $40,000 only requires the approval of a spot Bitcoin ETF.” She added that Bitcoin has lost some upward momentum recently, in part because of the sharp fluctuations of the stock and currency markets that attracted investors' attention.

MicroStrategy, the listed company with the largest holdings of Bitcoin in the world, bought an additional $593 million worth of Bitcoin last month, bringing its total to about $6.5 billion.

 November's record close wasn't enough for gold investors on Friday as strong momentum pushed prices to record highs ahead of the weekend. Powell's efforts to suppress interest rate cut expectations have an opposing effect. Spot gold is approaching its all-time high of $2,075.47 per ounce set on August 7, 2020. Spot gold closed at $2,071.93 per ounce, up 1.76%. The settlement price of COMEX February gold futures closed up 1.58% at US$2,089.7 per ounce.

Gold has found new buying momentum as the market continues to price in expectations of a rate cut as early as March. Precious metals are still rising despite central banks maintaining their tightening stance. On Friday, Federal Reserve Chairman Jerome Powell said he remained unconvinced that monetary policy would be restrictive enough to reduce inflation to 2%.

Bond traders have increased bets on the Fed cutting interest rates next year, even as Fed Chairman Jerome Powell reiterated that it was too early to speculate on policy easing. The yield on the 2-year U.S. Treasury note fell as much as 11 basis points to 4.57%, the lowest since June, as traders increased their bets on the extent of interest rate cuts over the next year.

“The Fed's bet-cutting remains supportive of precious metals, while technical factors continue to support upward momentum,” said Lukman Otunuga, market analysis manager at Forexlive.com. “In the absence of any new fundamental catalysts, November's monthly close could top $2,000 USD. Provides basis for bulls to push prices higher.”

Despite this optimism, some analysts advise investors to remain cautious on gold at current levels and not chase the market. Commerzbank commodities analyst Barbara Lambrecht said gold prices may be limited before the non-farm payrolls report is released next Friday.

 Crude oil markets closed more than 2% on Friday after a tumultuous trading week, driven by concerns over the latest round of OPEC+ production cuts and slowing global manufacturing activity. For the week, Brent crude oil fell about 2.1% and WTI fell more than 1.9%. Both major benchmark indexes fell about 2%, bringing November's cumulative losses to more than 6%, with crude oil prices having fallen to mid-July lows.

Federal Reserve Chairman Jerome Powell said on Friday that the central bank would “cautiously” adjust interest rates as “the risks of under-tightening and over-tightening are balancing out.”

A survey showed that the U.S. manufacturing industry remained sluggish in November, with factory employment falling. Investors are closely watching global manufacturing activity, which remained weak this month amid weak demand.

A weaker dollar, typically positive for oil prices, did not provide much relief as market sentiment continued to be dominated by worries about rising supplies. The U.S. Commodity Futures Trading Commission (CFTC) said on Friday that fund managers reduced their net long positions in U.S. crude futures and options by 7,663 contracts to 62,070 in the week ended November 28.

Crude oil futures prices closed lower for the second consecutive session on Friday. Traders are skeptical of OPEC+'s “voluntary” decision to further cut production in the first quarter. Craig Erlam, senior market analyst at OANDA, said: “Traders seem to either not believe that members will comply with the regulations, or believe that the production cuts are not enough; or believe that the lack of formal commitment hints at divisions within OPEC, which may affect its ability to achieve its goals, not to mention further cuts in production if necessary.”

 The U.S. dollar index depreciated slightly this week, with the market trend twisting from 103.4177 points to 103.1952 points at the weekend. The U.S. dollar depreciation dynamics remain the same, and the trend depreciation of the U.S. dollar remains the core of the direction. Under the benchmark, the euro shot up to US$1.10 and then fell back to US$1.08, the British pound maintained at US$1.26-1.27, the Swiss franc rose to a high of 0.86 Swiss francs, the Canadian dollar stabilized at 1.35-1.34, the Canadian dollar rose slightly, and the Japanese yen rebounded by 146 yen. The Australian dollar fluctuated by US$0.66, and the New Zealand dollar fluctuated by US$0.62. China RMB instantly broke through 7.12 yuan to 7.11 yuan on Tuesday, but then traded sideways around 7.13 yuan and ended at 7.12 yuan at the weekend.

The foreign exchange market currently highlights the theme of US dollar depreciation. Coupled with the outstanding performance of U.S. data, there is a large contrast between the debate about the U.S. economic recession and its actual performance. Market speculation is the main focus to stimulate the depreciation of the U.S. dollar. The actual strong economy will make the U.S. dollar face a tangled situation.

It is expected that the depreciation trend of the US dollar will remain the focus next week. The depreciation effect or the debate on whether the Fed will raise interest rates will be the focus. If there is no subjective intention to manipulate the US inflation data or it is a parameter for the Fed not to raise interest rates, but as Fed Chairman Powell said, the Fed will not stop raising interest rates. , there are no targets and parameters for interest rate cuts, and market expectations have been too hasty.

OnePro Special Analyst

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