Weekly News 2023/11/20-2023/11/24

 U.S. stocks closed mixed on Friday in light trading. The Dow closed up 117.12 points, or 0.33%, at 35390.15 points; the Nasdaq fell 15.00 points, or 0.11%, at 14250.85 points; the S&P 500 rose 2.72 points, or 0.06%, at 4559.34 points. All three major stock indexes posted their fourth consecutive weekly gain this week. The market is paying attention to retailers' holiday sales performance. Thursday is the Thanksgiving holiday in the United States, and financial markets are generally closed. U.S. stocks closed three hours early on Friday. The Dow rose 1.27% this week, recording its fourth consecutive week of gains for the first time since April. The S&P 500 rose 1% and the Nasdaq rose 0.89%.

The continued rise in U.S. stocks comes as U.S. Treasury yields hit multi-month lows this week. Treasury yields fell as investors saw signs that inflation was cooling and bet the Federal Reserve was done raising interest rates. Macro strategist Philip Maldia Madsen said: “The problem is that if economic growth continues to be stable in the current policy rate environment, then it is almost certain that monetary policy is not constraining the economy, which means the Fed has no reason to cut interest rates.” Madsen added: “Moreover, gains in U.S. bonds and stocks have stimulated the economy, reducing the need for the Federal Reserve to ease monetary policy. So has the sharp drop in oil prices, which, while unrelated to the U.S. economy, has boosted households spending on services and goods.”

In terms of economic data on Friday, the initial value of the U.S. Markit manufacturing PMI in November was 49.4, which was expected to be 49.8 and the previous value was 50.

 Tesla (NASDAQ: TSLA) has received attention. The companys CEO, Musk, made some remarks about Jews on social platforms last week, causing widespread concern and controversy. Musk has repeatedly expressed sympathy and support for the Palestinians and has expressed criticism and opposition to Israel's policies and actions. The electric car giant is currently increasing discounts in the United States and Europe.

NVIDIA (NASDAQ: NVDA) recently posted stellar financial results. Nvidia delays the launch of AI products for China. Morgan Stanley raised its target price for Nvidia from $600 to $650 and reiterated its “overweight” rating.

Amazon (NASDAQ: AMZN) was hit by strikes and protests across Europe during Black Friday. Amazon workers are on strike across Europe as protests against Amazon's working practices intensify ahead of Black Friday, the busiest shopping day of the year. “Make Amazon Pay” is a strike movement coordinated by the United Global Union that will see Amazon employees in more than 30 countries stage strikes and protests from Black Friday to Monday.

Faraday Future (NASDAQ: FFIE) announced its entry into the Middle East market. Faraday Future announced its entry into the Middle East on the 23rd, signing strategic cooperation agreements with Master Investment Group and Siraj Finance LLC to carry out business in the Middle East starting in 2024. At the same time, FF will launch the “FF 91 Futurist aiFalcon” limited edition for the Middle East market.

Boeing (220, 0.09, 0.04%) shares rose after the FAA authorized the company's MAX-10 jetliner to begin flight testing. The plan suffered lengthy delays.

Management of design software company Autodesk (NASDAQ: ADSK) raised its outlook for the fiscal year ending in January but issued weak performance guidance.

 Cryptocurrency markets have recovered somewhat over the past week after suffering a sell-off on Wednesday following the resignation of the chief executive of Binance, the largest exchange. Bitcoin has gained 3.71% over the past seven days, trading at $37,800 on Friday, according to CoinMarketCap. Ethereum gained 6.8% and was trading at $2,103.51.

On Tuesday, the U.S. Department of Justice (DOJ) and Binance agreed to delist the trading pair and prepare to completely withdraw from the U.S. market on money laundering charges. Binance will also pay a $4.3 billion fine. Binance CEO Changpeng Zhao (CZ) has resigned from his management role as part of his guilty plea to operating without a license and conspiracy charges. However, he will retain his ownership rights on the exchange. The market sold off after the news was announced but quickly recovered. Investors feared an FTX-style crash after the news broke, but Binance calmed them by handling huge withdrawals.

Antoni Trenchev, founder of cryptocurrency lender Nexo, said: “ETF mania finally pushed Bitcoin to break through this year‘s key resistance level of $31,000 to $32,000. And this enthusiasm seems unstoppable, Bitcoin spot ETF It’s only a matter of time before SECs approval, and there may be a basket of spot ETFs released one after another.”

The analysis pointed out that investors who are optimistic about cryptocurrency are paying attention to the Grayscale Bitcoin Trust (GBTC), which is expected to be converted into a Bitcoin spot ETF, and the Bitcoin spot ETF applications of BlackRock and other financial companies will be approved by the SEC. The likelihood of the spot ETF passing review has been unclear over the past few months, but it could attract a new wave of interest from retail and institutional investors.

 This week, the gold market has successfully regained the $2,000 level and is close in positive territory for the second consecutive week. However, analysts said that the momentum of gold prices is still limited. As the Federal Reserve maintains its tendency to tighten monetary policy, gold prices are unlikely to break through the current resistance level.

Analysts pointed out that U.S. monetary policy is expected to be the most important factor driving gold prices in the near future as Israel and Hamas agree to a limited ceasefire, weakening the safe-haven appeal of the precious metal.

Commerzbank commodities analyst Barbara Lambrecht said in a report on Friday: “Our economists expect the first interest rate cut to be implemented in the middle of next year, so the price of gold may it continue to climb above $2,000.” However, while gold prices may fall below $2,000 an ounce, many analysts do not expect much downside risk as seasonal factors come into play.

Nicky Shiels, head of metals strategy at MKS PAMP, said in a recent report that over the past five years, gold has gained an average of 2.7% between Thanksgiving and December 31.

With renewed focus on U.S. monetary policy, the gold market will be sensitive to U.S. GDP and inflation data. While the U.S. economy is expected to post exceptional growth in the third quarter, there are growing concerns about a slowdown in economic activity in the fourth quarter. At the same time, slower growth is expected to continue to slow inflation.

Markets will also be watching a slate of central bank speakers on Tuesday. In recent comments, Powell has been quite blunt in saying that interest rates will remain within a restrictive range as inflation remains unchecked.

 Oil prices fell on Friday as tensions in the Middle East eased and political risk premiums fell. U.S. West Texas Intermediate crude oil fell $1.56 per barrel, or 2%, from Wednesday's closing price to close at $75.54 per barrel. Brent crude oil futures fell $0.84/barrel, or 1%, to close at $80.58/barrel.

Both contracts posted their first weekly gains in five weeks as oil prices have fallen recently on demand concerns and a surge in supply, especially from non-OPEC producers, as OPEC+ prepares for a meeting in which production cuts will be high on the agenda. OPEC+, the Organization of the Petroleum Exporting Countries and allies including Russia, surprised markets on Wednesday by postponing its November 26 deadline to November 30 after producers struggled to agree on production levels. OPEC+ is close to reaching a compromise with African oil producers on 2024 output levels, three OPEC+ sources told Reuters. The development points to ongoing negotiations and discussions within the organization to set production quotas for the coming year. While West Texas Intermediate crude prices could rise if OPEC+ cuts production, rising U.S. crude inventories and lower refining profits could keep prices in check.

Over the past week, the likelihood of further OPEC+ production cuts have gone from close to zero to a real possibility. Still, traders are approaching the group's upcoming meeting with extreme caution.

Commerzbank and hedge fund manager Pierre Andurand warned that oil prices could fall if Saudi Arabia and Russia simply extend current measures unilateral cuts of 1.3 million barrels per day until early 2024. If other members cut production, it may win back the longs, but this will be difficult to coordinate.

 As the U.S. manufacturing industry weakens and the market lowers expectations for an interest rate cut by the Federal Reserve, the U.S. dollar faces further decline. A better-than-expected retail sales report and a broad recovery in market risk sentiment are boosting the Canadian dollar, sending it higher against major currencies. Canadian dollar/yuan receipts have seen their highest gains in the past three weeks.

The U.S. dollar index hovered at its lowest level in two months, trading at 103.39 on Friday, down 0.36%, marking the second consecutive week of decline this month.

Currencies traded in a tight range on Friday, with a shorter trading session as U.S. markets were closed for Thanksgiving on Thursday. The U.S. dollar index, which measures the greenback against six currencies, fell and was near its lowest in two months. The index fell 2.8% for the month and was on track for its weakest monthly performance in a year.

During the session, the U.S. dollar was capped by uncertainty over the path of U.S. interest rates, with price action weak and a lack of bullish conviction driven by a disconnect between the Fed's outlook and market expectations for a series of rate cuts in 2024.

Data released by the government on Friday showed that the initial value of the US Markit service industry PMI in November was 50.8, and the initial value of the US Markit manufacturing PMI in November was 49.4. A weak S&P Purchasing Managers' Index showed signs of economic weakness. The U.S. economy is showing signs of cooling in inflation and job creation. This economic outlook leads traders to believe that the Federal Reserve will take a less aggressive stance, which is weakening the dollar.

OnePro Special Analyst

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