MARKET CLOSED

Due to the Thanksgiving holiday, the stock market will be closed today.

EXPECTED RISE

As stated by the Commerce Department report in October, inflation edged higher, prompting the Federal Reserve to assess the potential for interest rate adjustments. The personal consumption expenditures price index, the preferred inflation measure of the Fed, increased by 0.2% on a monthly basis, with a 12-month inflation rate of 2.3%. In addition, core inflation, excluding food and energy, also showed an increase. Services prices primarily contributed to the inflation rise, while goods prices saw a slight decline. These results met expectations, and as a result, experts still expect another rate cut in December. Moreover, it is worth remarking that, as for the latest report, consumer spending remains solid, and this has been accompanied by an increase in personal income.

BETTING ON MICROSTRATEGY

The recent introduction weekly options trading for the T-Rex 2X Long MSTR Daily Target ETF (MSTU) has provided investors with the opportunity of taking positions on MicroStrategy’s stock performance. MSTU, with assets exceeding $2.5 billion, is currently the largest among similar funds. However, the market value of MicroStrategy’s stock has declined by nearly 30% in recent days, contributing to increased investor caution. In parallel, Bitcoin’s price volatility has led investors to hedge their positions with options anticipating potential market shifts. This volatility is evident in the options market, with expectations of significant price movements. This uncertainty coincides with the substantial growth in the crypto market this year, exemplified by Bitcoin’s more that 100% surge in value.

UNEXPECTED RISE

There has been an unexpected surge in U.S. gasoline inventories, and this has put a downward pressure on oil prices. Despite earlier forecasts of a decline, the U.S. Energy Information Administration reported that gasoline stocks in the U.S. increased by 3.3 million barrels, and this unexpected rise increased concerns among investors and market analysts, leading to a decrease in oil prices. The surplus in gasoline inventories has been attributed to a number of factors, including a slowdown in fuel demand from major consumer markets such as China and the U.S. These factors have contributed to the bearish trend in the oil market, as the risks of supply disruptions in the Middle East fade and the market continues to grapple with oversupply issues. 

RELAXED RESTRICTIONS

In response to reports of the U.S. potentially easing restrictions on China’s chip industry, stock prices of major chip suppliers have surged. It has been announced that the proposed sanctions may limit the sales of semiconductor equipment and AI memory chips to China, but are speculated to be less stringent than previously anticipated as the focus of the new regulations appears to be on Chinese firms involved in manufacturing semiconductor equipment rather than the actual chip-producing factories. This shift in strategy could favor foreign semiconductor equipment manufacturers that supply to chip plants, and as a result, the shares of global semiconductor equipment firms like ASML and Tokyo Electron have been boosted. Moreover, it is worth remarking that the exclusion of certain Chinese companies from the export blacklist could potentially benefit ASML by mitigating revenue decline in China.