STOCK MARKET

Dow Jones ended at $42,342.24 (+0.04%)

S&P 500 ended at $5,867.08 (-0.09%)

Nasdaq Composite ended at $19,372.77 (-0.10%)

The stock market experienced a weak close as the Dow Jones Industrial Average narrowly snapped its 10-day losing streak, while the S&P 500 and Nasdaq Composite fell. As a result of the current uncertainty surrounding the Federal Reserve’s interest rate decisions, the 10-year Treasury yield rose, and this caused pressure on stocks. In addition, the current uncertainty has also led to volatility in the market, with the Cboe Volatility Index pulling back after spiking during yesterday’s session. Moreover, it is important to remark that investors are advised to be cautious and keep some cash reserves.

CRYPTO MARKET

Bitcoin fell by 3.01% for the day, with a value of $96,265.07 as of 3:00 PM CST, as stated by Coin Metrics.

TAKING CENTER STAGE

Something notable that has occurred this year is the rise in popularity that digital assets like bitcoin have experienced, especially among institutional investors. In fact, U.S. spot-listed bitcoin ETFs have now surpassed Gold ETFs in assets under management, reaching $129.25 billion compared to Gold’s $128.88 billion. In addition, the CME exchange, popular with institutions, has also shown strong activity, with futures open interest nearing all-time highs at 212,635 BTC. The basis trade premium on the CME has risen to 16.4%, indicating anticipation of increased momentum. Moreover, U.S. spot-listed bitcoin ETFs have seen continual net inflows since November, totaling $6.5 billion, with a significant portion attributed to the cash and carry trade strategy.

POSITIVE TURN

Following the latest Federal Reserve signals slower rate cutting cycle, the 10-year Treasury yield has risen above 4.5%, indicating potential economic strength and supporting the Fed’s move to reduce rate cuts in 2025. This increase is accompanied by positive economic data, such as a drop in jobless claims to 220,000 and higher-than-expected U.S. GDP growth of 3.1% in the third quarter. These encouraging indicators suggest a stable economy, leading the Fed to implement a predicted quarter-point rate cut and revise its forecast to only two potential cuts in the future. Market expectations have subsequently shifted, with a reduced likelihood of further rate cuts in January now below 10%. Overall, these developments reflect a cautiously positive outlook on economic growth and future monetary policy adjustments.

TURBULENT PATCH

Bitcoin’s price has hit a turbulent patch as it hovered around $100,000 due to the Federal Reserve’s cautious stance on interest rate cuts impacting speculative investments in digital assets. The latest shift in monetary policy caused a ripple effect in the market, with other cryptocurrencies like Ether and Dogecoin struggling as well. Moreover, despite recent gains bolstered by President-elect Donald Trump’s support, some traders took profits on Bitcoin following the Fed meeting, leading to some short-term volatility and potential price dips.

POTENTIAL FOR GROWTH

A new player in the cryptocurrency market, DTX Exchange, is garnering attention for its potential for significant growth, drawing comparisons to the success stories of Cardano and Solana. With a remarkable surge of 500% during its presale phase and raising over $10.2 billion, DTX Exchange is positioned as a star in the making. The platform, scheduled to launch in Q1 2025, aims to revolutionize online trading by combining the best features of centralized and decentralized exchanges, offering a wide array of asset classes with leverage up to 1000x. Supported by innovative products like the VulcanX Blockchain and Phoenix Wallet, the DTX token has recently been listed on CoinMarketCap, signaling increasing credibility and interest from investors. The current price of the DTX token stands at $0.12, but experts speculate that it could reach $0.20 once listed on high-profile exchanges like Uniswap. Concurrently, Cardano has seen a notable price surge, reinforcing the positive sentiment surrounding promising altcoins in the crypto landscape.

INTERNATIONAL NEWS

The Bank of England has decided to keep interest rates unchanged following their final meeting of the year, a move influenced by a rise in U.K. inflation to an eight-month high. While expectations were for a rate hold, concerns about persistent services inflation and wage growth played a crucial role. A notable aspect of the decision was the split among the members of the Monetary Policy Committee, with three advocating for a rate cut and six in favor of maintaining the status quo. This divergence, along with a greater than anticipated inflation increase, has raised speculation about a possible interest rate reduction in February. Moreover, it is worth noting that the recent U.K. budget and potential trade tensions under the new U.S. administration are factors that could further impact the country’s economic stability.

STOCK MARKET

Dow Jones ended at $42,326.87 (-2.58%)

S&P 500 ended at $5,872.16 (-2.95%)

Nasdaq Composite ended at $19,392.69 (-3.56%)

The stock market experienced significant losses across all major indexes, including the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite, primarily due to a less aggressive rate outlook by the Federal Reserve. The Fed’s decision to only cut rates twice in 2025, contrary to traders’ expectations of more stimulus, contributed to a sell-off as investors reacted negatively to the news. The increase in Treasury yields following the Fed’s announcement further added pressure on share prices. Additionally, concerns about future inflation and unemployment levels, as indicated by TradeStation’s David Russell, exacerbated the market’s negative sentiment. The Dow’s transition from old economy shares to technology stocks also influenced the market decline.

CRYPTO MARKET

Bitcoin fell by 5.60% for the day, with a value of $100,666.19 as of 3:00 PM CST, as stated by Coin Metrics.

FOCUS ON POWELL

Clear expectations are in place as investors eagerly await the Federal Reserve’s anticipated decision to decrease interest rates by a quarter percentage point at today’s meeting, which would mark the third cut of 2024. All eyes are now on Chair Jerome Powell’s forthcoming press conference, where potential adjustments to rate projections for 2025 will be scrutinized. Of particular interest is the unveiling of the “dot plot,” which will reveal Fed officials’ rate forecasts and offer valuable insights into the trajectory of future rates. Recent economic data and cautious remarks have muddied prior expectations of additional rate cuts for 2025, and many economists are now forecasting a possible shift toward a more tempered pace of rate reductions.

RISING TIDES

Mortgage rates experienced a sharp increase last week, leading to a notable decrease in overall mortgage demand. The decline was primarily driven by a drop in refinance applications, despite still remaining significantly higher compared to the same period last year. Conversely, applications for home purchases saw a slight uptick, reflecting a positive trend in the market. Joel Kan from the Mortgage Bankers Association noted that this increase in purchase activity was largely fueled by conventional and VA loan applications, showing growth on a weekly and annual basis. Looking ahead, mortgage rates have remained stable at the beginning of this week as the market awaits the Federal Reserve decision on rate cuts due later today.

CURRENTLY VOLATILE

As for Bitcoin, it surged to a new all-time high of over $108,000, only to retreat slightly to around the $105,000 as of this morning amidst anticipation of a Federal Reserve interest rate cut and positive sentiment from President-elect Donald Trump towards crypto. The overall value of digital assets approached $4 trillion during the recent rally, reflecting growing investor interest in cryptocurrencies. Additionally, MicroStrategy Inc.’s potential inclusion in the Nasdaq 100 Index has further fueled optimism among investors. Moreover, it is worth noting that volatility in the market is anticipated following the Fed’s decision, and analysts are predicting potential momentum for Bitcoin during the upcoming holiday season. However, caution is advised, as Bitcoin’s price movements exhibit signs of volatility and retracement despite reaching new highs.

BULLISH CASH DECLINE

Recent data shows that the amount of cash held by investment managers has decreased to only 3.9% of their total assets by the end of December. This drop in cash holdings has often been a sign that stock markets could see losses in the near future. At the same time, investment managers have increased their investments in U.S. stocks to a level that is higher than ever before. This suggests that they are feeling positive about the U.S. economy and the policies of the incoming president. Investors are focusing on factors like strong U.S. economic growth, supportive central bank policies, and hopes for a Chinese economic recovery. However, some analysts are concerned that a significant sell-off could occur if certain triggers are met. Overall, investors seem optimistic about the outlook for U.S. stocks, but they are also cautious about potential risks, such as a global trade war.

REVVING UP

U.S. new vehicle sales are forecasted to rise to their highest levels since 2019 in the upcoming year due to lower interest rates and increased affordability. Analysts project that new light-duty vehicle sales will reach about 16.3 million in 2025, slightly surpassing previous forecasts. This growth, expected to be around 2.5% or less, will be driven by normalized vehicle inventories, automaker incentives, and lower financing rates. Entry-level and more affordable vehicles are predicted to see significant growth, while electric vehicles are also expected to perform well, with all-electric models reaching an estimated market share of 8% in 2024. However, uncertainties surrounding regulations and potential tariff threats could impact the market, leading analysts to caution that some automakers may face challenges despite the overall sales increase.

STOCK MARKET

Dow Jones ended at $43,449.90(-0.61%)

S&P 500 ended at $6,050.61 (-0.39%)

Nasdaq Composite ended at $20,109.06 (-0.32%)

The stock market witnessed losses across all major indexes due to uncertainty surrounding the Federal Reserve’s December interest rate decision. The Dow Jones Industrial Average posted a nine-day losing streak, its longest since 1978, leading to a drop in the S&P 500 and Nasdaq Composite as well. Traders are awaiting the Fed’s policy decision and will be closely monitoring Fed Chair Jerome Powell’s press conference for clues about future rate cuts. The market is expecting a quarter percentage point cut in interest rates, but the Fed’s language and tone could impact stock performance. Nevertheless, it is worth noting that despite the potential volatility, some analysts believe that any immediate effects of the Fed’s decision may be short-lived. Moreover, earnings reports from companies like General Mills, Micron Technology, and Lennar will also play a role in market movements.

CRYPTO MARKET

Bitcoin rose by 0.38% for the day, with a value of $106,562.00 as of 3:00 PM CST, as stated by Coin Metrics.

MIXED VIEWS

A recent survey has revealed that many, including economists, strategists, and fund managers, predict a 93% chance of a quarter-point rate cut by the Federal Reserve. However, only 63% believe it is the right decision. Forecasts for two more quarter-point cuts by 2025 have been revised down from three, bringing the funds rate to 3.8% by next year and 3.4% by the end of 2026. Concerns about the incoming administration’s fiscal policies, such as tariffs and deportations, have led to uncertainties about inflation and growth effects. 56% of respondents see these policies as somewhat inflationary, while 41% perceive them as somewhat negative for growth. Additionally, nearly 69% view stocks as overpriced, and the S&P 500 is predicted to rise by 3% next year and 7% by 2026. The probability of a recession in the next year is at a two-year low of 29%, with forecasts showing GDP growth of 2.5% this year, cooling to 2.1% by 2025 and 2026.

POTENTIAL TO MAXIMISE RETURNS

Since many believe that an interest rate cut by the Federal Reserve is very likely to happen this week, financial experts are urging individuals to act swiftly to capitalize on the opportunity to earn competitive returns on cash investments. Current offers on savings accounts, money markets, and CDs continue to outpace inflation, a trend that is expected to endure until at least 2025. By seizing this moment to invest in Treasury bonds and high-yield CDs, which offer yields above 4%, individuals can secure favorable rates and potentially enhance their financial portfolios. Furthermore, options such as Series I bonds and Treasury Inflation Protected Securities provide avenues to combat inflation and diversify investment strategies. Optimal decision-making lies in finding a balance between liquidity and long-term investments, especially in light of projected market conditions for 2025 and the allure of high-yield online savings accounts and longer-term CDs. Taking proactive steps now could lead to better financial outcomes in the future.

ENTERING INTO CORRECTION

Nvidia’s stock fell by over 10% from its recent high, officially entering into correction territory. This comes after a strong year where the company’s shares soared by 166%, driven by excitement around artificial intelligence technology. However, in December, the stock faced a 4.5% decline, prompting some investors to take profits. Moreover, it is worth noting that not all semiconductor companies are following suit as other chipmaking stocks, like Broadcom, have been performing well recently. Furthermore, the broader market, which is represented by the Nasdaq Composite, continues to hit record highs, and this suggests that Nvidia’s correction may be more specific to the company rather than a reflection of the entire sector.

EMBRACING GROWTH

Semler Scientific, which is a small-cap medical device company, is believed to have introduced options trading for its shares following a period of significant growth driven by a shift to a bitcoin treasury strategy and successful capital-raising initiatives. Semler’s stock price has risen to over $74, with a market cap surpassing $600 million. By expanding its share offerings and acquiring a substantial amount of bitcoin, Semler appears to be following in the footsteps of successful companies like MicroStrategy, leveraging convertible notes to raise capital for bitcoin acquisitions without immediate dilution of existing shares. The introduction of options trading could offer additional opportunities for investors to hedge risk and make convertible offerings more attractive for potential buyers looking to capitalize on the company’s bitcoin strategy. It is important to remark that the company has not formally announced this move, nonetheless, brokerage accounts have indicated the availability of options for trading.

VENTURING INTO EURO STABLECOINS

Tether, the company behind the USDT stablecoin, has made an investment in StablR, which is a European stablecoin issuer. StablR issues stablecoins tied to the euro and U.S. dollar, having recently acquired an EMI license in Malta to comply with EU regulations. Tether’s investment in StablR includes providing support through their tokenization platform, Hadron, which offers tools for compliance, KYC, AML checks, risk management, and secondary market monitoring. This investment reflects Tether’s strategy of collaborating with smaller issuers and adapting to the changing regulatory landscape, particularly with the impending MiCA regulations in the EU. As part of this strategy, Tether made the decision to discontinue its own euro-pegged stablecoin and instead invest in regulated entities like Quantoz. Tether’s stance on the new regulations highlights their concerns about the potential impact on the European banking sector and on stablecoin reserves.

STOCK MARKET

Dow Jones ended at $43,717.48 (-0.25%)

S&P 500 ended at $6,074.08 (+0.38%)

Nasdaq Composite ended at $20,173.89 (+1.24%)

The stock market began the week with mixed performances as the S&P 500 and the Nasdaq Composite rose, with the latter increasing to a record high, driven by a rally in tech stocks. Meanwhile, the Dow Jones Industrial Average fell for an eighth consecutive day. Investors were awaiting the Federal Reserve’s policy meeting, where it was widely expected that the central bank would cut its benchmark lending rate. Stocks in the tech and consumer discretionary sectors reached record highs, but there were some notable exceptions such as Nvidia, which fell into a correction. Investors were also paying close attention to the Fed’s forward guidance on future policy moves, especially in light of recent economic data showing stabilization in unemployment numbers but an uptick in inflation.

CRYPTO MARKET

Bitcoin rose by 3.11% for the day, with a value of $105,783.86 as of 3:00 PM CST, as stated by Coin Metrics.

ALL TIME HIGHS BUT STILL VOLATILE

Bitcoin set a new high record of $106,000 over the weekend, however, this morning the leading crypto has been volatile as investors await the Federal Reserve’s interest rate decision. Bitcoin has been trading between $104,000 and $106,000 after it reached a peak of $106,449 on Sunday. In addition, Ether also hit a high of $4,016 before dropping just below $4,000. This volatility comes before the Fed is expected to cut rates by 25 basis points after its meeting this week, leaving rates at 4.25%-4.50%. Low interest rates benefit markets and cryptocurrencies by increasing investor risk appetite. Nevertheless, it is important to remark that despite the tightening U.S. interest rate environment since March 2022, Bitcoin has surged 163%. Furthermore, the  pro-crypto White House post-election has boosted the crypto boom, with Trump proposing a national Bitcoin reserve and supporting crypto projects, and since the new Securities and Exchange Commission (SEC) chair, Paul Atkins, is a crypto advocate, there is the possibility of more positive regulatory measures under the new administration.

RECORD-SETTING INFLOWS

Despite the recent fluctuations, it has been announced that the cryptocurrency market continues experiencing unprecedented growth as crypto investment products saw a surge last week, with net inflows of $3.2 billion and a total of $44.5 billion year-to-date, setting a new record. U.S. spot Bitcoin exchange-traded funds (ETFs) contributed $2.17 billion in net inflows, with a cumulative net inflow of $35.8 billion since their launch in January. In addition, Ethereum-based funds added $1 billion last week, reaching a total of $2.25 billion over 15 trading days. Additionally, Bitcoin mining difficulty rose to 109 trillion, indicating increased network activity and robust market engagement. Thus, although there has been some volatility, the overall trend suggests sustained interest and investment in the crypto market.

NEW INCLUSION

MicroStrategy, a company which is now widely recognized for its close association with the price of bitcoin, is scheduled to join the Nasdaq 100 index on December 23. This impending inclusion was announced on Friday after the stock market closed, and it is expected to lead to automatic purchases of MicroStrategy shares by popular ETFs like the Invesco QQQ Trust, providing additional benefits for the company. The anticipation of this move was high among investors during the index rebalancing, especially considering MicroStrategy’s significant surge this year. The company’s stock value has skyrocketed by 547%, outperforming the S&P 500’s increase of 26.9%. Following the announcement, MicroStrategy’s shares have already seen a rise of over 3%. This upcoming milestone in the company’s journey further solidifies its position in the market and underscores the growing influence of bitcoin-related firms in mainstream financial indexes.

WEAKER SPENDING LEADS DECLINE

Oil futures prices have declined as it was revealed that there was weaker-than-expected consumer spending in China. This caused Brent crude to fall 0.81% to $73.89 a barrel and U.S. West Texas Intermediate crude to drop 0.98% to $70.59. Chinese industrial output showed some growth in November, but retail sales were lower than forecasts, putting pressure on Beijing to boost stimulus measures. Amid this uncertainty, OPEC+ decided to delay production increases until April, while market participants awaited news on Chinese economic stimulus. Nevertheless, it is worth noting that despite the declines, oil prices were cushioned by the current concerns over potential supply disruptions from U.S. sanctions against Russia and Iran.

KEY EVENTS HAPPENING THIS WEEK

Monday: Empire State manufacturing survey, S&P flash U.S. services PMI and manufacturing PMI reports for December.

Tuesday: U.S. retail sales, retail sales minus autos, industrial production, and capacity utilization reports for November, and home builder confidence index report for December.

Wednesday: FOMC interest-rate decision, speech from Federal Reserve Chair Powell, and housing starts and building permits reports for November.

Thursday: GDP second revision for third quarter, existing home sales and U.S. leading economic indicators for November, Philadelphia Fed manufacturing survey for December, and initial jobless claims for the week ending on December 14.

Friday: Personal consumer expenditure (PCE) index and core PCE index reports for November, and final consumer sentiment report for December.

STOCK MARKET

Dow Jones ended at $43,828.06 (-0.20%)

S&P 500 ended at $6,051.09 (-0.00%)

Nasdaq Composite ended at $19,926.72 (+0.12%)

The stock market ended the week with mixed performances because while the Dow Jones Industrial Average fell for a seventh straight day, the Nasdaq Composite managed to gain slightly. The S&P 500, on the other hand, ended the session little changed. For the week, the Dow posted a 1.8% decline, and the S&P 500 slid about 0.6%, breaking its three-week winning streak. The Nasdaq, on the other hand, rose 0.3% during the same period. Market experts noted that the market was stuck in a trading range with the Nasdaq expected to outperform, small caps to underperform, and the Dow struggling until a catalyst for growth emerges. Specific movements in individual stocks like Nvidia and Meta Platforms falling, Amazon shares being marginally lower, and Broadcom rallying after positive earnings contributed to the gains experienced by the Nasdaq. Nevertheless, despite these gains, it is important to remark that the overall market sentiment was negative as the Nasdaq broke below the 20,000 threshold, highlighting the conflicting trends in the market.

CRYPTO MARKET

Bitcoin rose by 1.67% for the day, with a value of $101,611.28 as of 3:00 PM CST, as stated by Coin Metrics.

ACCUMULATION STRATEGY

JPMorgan has recently noted that mining companies are adopting the bitcoin accumulation strategy seen in firms like MicroStrategy due to profitability challenges post the reward halving and rising network hashrate. Miners are choosing to stockpile bitcoin or explore opportunities in other sectors like AI and high-performance computing. MARA Holdings is a prime example, holding 35,000 bitcoin tokens valued at $3.5 billion. Additionally, companies outside the mining sector, such as Semler Scientific, have entered the crypto space, with Semler acquiring $144 million in cryptocurrencies.

DOMINATING TRADING ACTIVITY

HyperLiquid, a prominent on-chain perpetuals trading protocol, has witnessed a surge in trading activity, with a notable shift towards ether over bitcoin. The platform has recorded a cumulative volume of over $500 billion, a significant increase of 15 times since the beginning of the year. In the past week, ether has outpaced bitcoin in trading volume on HyperLiquid, indicating a growing interest in the cryptocurrency. Furthermore, the open interest in ether perpetual contracts has seen substantial growth, reaching $857.5 million. The platform’s success is also mirrored by the remarkable performance of its native token, HYPE, which has surged by over 300% in value, surpassing well-established DeFi projects like Aave.

AI BREAKTHROUGH

The leading chipmaker, Broadcom, has exceeded expectations for the fourth quarter, as it reported a significant 51% increase in revenue. This boost was largely attributed to their success in the artificial intelligence (AI) sector, with revenue for AI chips increasing by 12% to $8.23 billion. The company’s CEO, Hock Tan, announced that they are developing custom AI chips in collaboration with three major cloud customers, leading to a 13% jump in the company’s stock value during extended trading. In addition, Tan projected a promising future for Broadcom in AI, emphasizing the surging demand in generative AI infrastructure, and since AI revenue is skyrocketing by 220% to $12.2 billion for the year, Broadcom is strategically positioning itself to capture a substantial market opportunity estimated at $60 to $90 billion by 2027 with their AI chips known as XPUs. Additionally, the company’s infrastructure software division experienced a remarkable three-fold increase in revenue driven by their acquisition of VMware.

CREDIT FUSION

Fintech company Affirm is partnering with private-credit firm Sixth Street in a $4 billion joint venture to offer short-term installment loans over the next three years. This collaboration combines the trend of alternative-asset managers investing in fintech companies for more efficient financing options. Unlike traditional banks, Affirm uses various funding models, including deals with private-credit funds, like the one with Sixth Street, to expand its lending capacity. While banks also indirectly finance these loans, the partnership reflects the growing demand for short-term installment loans and buy now, pay later products. Affirm’s funding capacity has grown substantially, providing credit to consumers at adjustable APRs. Despite a rise in delinquency rates, this collaboration aims to capitalize on the increasing popularity of online shopping and flexible payment options.

INTERNATIONAL NEWS

In response to the current economic challenges, China is prioritizing policies to enhance growth as highlighted in a recent high-level economic planning meeting led by President Xi Jinping. Emphasizing the importance of proactive fiscal measures, the government plans to increase the deficit, issue more long-term bonds, and implement monetary easing strategies like lowering interest rates. These decisions reflect a shift in focus towards stimulating consumption, investment, and technological innovation amidst growing external uncertainties, including the threat of trade tensions with the U.S. While the meeting reaffirmed intentions to maintain economic stability, details regarding the scale of stimulus activities are pending, with expectations of growth targets hovering around 5%. Despite these efforts, the stock market reaction indicated a sense of disappointment among investors, as seen in the losses faced by China’s stock markets post-meeting. This suggests a mismatch in expectations and highlights the market’s desire for more concrete solutions and support for sustained economic momentum.

STOCK MARKET

Dow Jones ended at $43,914.12 (-0.53%)

S&P 500 ended at $6,051.25 (+0.54%)

Nasdaq Composite ended at $19,902.84 (-0.66%)

The stock market witnessed losses across all major indexes as the Dow Jones Industrial Average fell for a sixth consecutive day, marking its longest losing streak since April. Despite positive news from companies like Broadcom and RH reporting strong revenue growth, the overall market sentiment was dampened by the Nasdaq Composite breaking below the 20,000 mark and technology stocks like Nvidia slumping. Concerns about an overvalued market fueled by a post-election rally also impacted investor confidence, leading to a more cautious approach, and as a result the S&P 500 also fell. Also, although there was a positive producer price index report for November showing an increase in wholesale prices, it was not enough to offset the negative sentiment in the market, resulting in the declines seen across the major indexes.

CRYPTO MARKET

Bitcoin fell by 1.18% for the day, with a value of $99,974.28 as of 3:00 PM CST, as stated by Coin Metrics.

SIGNALING POSSIBLE PRESSURES

According to the Bureau of Labor Statistics, wholesale prices rose by 0.4% in November, exceeding expectations and indicating a slowdown in inflation progress, The producer price index, which tracks changes in prices of goods sold by manufacturers to measure inflation from their perspective, indicated a notable increase as it saw a 0.4% increase for the month, higher than the expected 0.2%. On an annual basis, PPI rose by 3%, the largest jump since February 2023. However, core PPI, excluding food and energy, only increased by 0.2%. Services costs rose by 0.2%, mainly driven by a rise in trade, while final-demand goods prices surged by 0.7%, attributed to a significant increase in food prices. It is worth noting that the elevated PPI figures signal the possibility of increased consumer inflation in the near future, and such inflationary pressures could prompt central banks to raise interest rates to curb rising prices.

ABOVE EXPECTATIONS

In the week ending December 7, there were 242,000 initial jobless claims reported by the U.S. Department of Labor, which was higher than the previous week and above market expectations. This data indicates that more individuals filed for unemployment benefits during that week. In addition, the insured unemployment rate, which measures the percentage of people receiving benefits, was 1.2%, while the 4-week moving average was 224,250. Furthermore, the advance number for seasonally adjusted insured unemployment for the week ending November 30 was 1,886,000, up by 15,000 from the previous week.

LOSING LUSTER

Gold prices have declined after reaching a more than one-month high earlier this morning, and this was driven by the expectations of a Federal Reserve interest rate cut next week. Despite the recent economic data releases which have signalled possible inflation pressures, many still expect rate cuts to happen at the upcoming Fed’s meeting, and as a result of this, spot gold dropped by 0.5% to $2,704.41 per ounce, following its highest level since November 6. In addition, U.S. gold futures also fell by 0.5% to $2,744.60, and this dip is attributed to profit-taking after the recent rally in gold prices, which were influenced by factors such as geopolitical tensions, China’s renewed gold purchases, and in-line inflation numbers reported yesterday.

LIFTOFF FRENZY

It has been announced that the XRP has seen a remarkable 260% increase in value over the past month, surpassing well-known digital currencies like Bitcoin and Ethereum, alongside the launch of Ripple’s new stablecoin, RLUSD. This regulated digital dollar alternative is backed by USD deposits and U.S. Treasury bonds in a bid to compete with Tether and USD Coin. Ripple has partnered with major exchanges to support RLUSD, expecting it to reach a significant $2 trillion market cap by 2028. Moreover, XRP reaching $2.14, its highest value in almost a year, coincided with positive investor sentiment post the election of Donald Trump as the new U.S. president, which is anticipated to ease regulatory pressures on the industry. Ripple’s ongoing legal battle with the Securities and Exchange Commission (SEC) took a favorable turn with potential changes to the leadership, signaling further positive outcomes for the company. Despite a slowdown in momentum due to profit-taking, heightened whale activity around XRP suggests strategic maneuvers within the market.

INTERNATIONAL NEWS

European markets have remained stable, fluctuating between small losses and gains following the European Central Bank’s decision to lower interest rates by 25 basis points. This marks the ECB’s fourth interest rate cut this year, aligning with expectations of a quarter-percentage-point adjustment and bringing the key rate to 3%, reflecting a total reduction of 1 percentage point since the start of the current easing cycle in June 2024. The news impacted the euro, causing an initial decline against the dollar followed by a recovery, ultimately rising by 0.18% to $1.051. In addition, the pan-European Stoxx 600 index saw a minimal decrease, while mining stocks experienced a decline of 1.3%, but the automotive sector witnessed an increase of 0.53%. Additionally, the Swiss National Bank also surprised markets by cutting rates by 50 basis points, a larger move than anticipated, in response to concerns over low inflation and a strong Swiss franc.

STOCK MARKET

Dow Jones ended at $44,158.56 (-0.22%)

S&P 500 ended at $6,084.19 (+0.82%)

Nasdaq Composite ended at $20,034.89 (+1.77%)

The stock market witnessed mixed performances, with the S&P 500 and Nasdaq Composite recovering from the losses both indexes experienced in the last two trading sessions, while the Dow Jones Industrial Average continued to decrease. The surge in the Nasdaq Composite, driven by positive news regarding November’s inflation report meeting economists’ projections, lifted the tech-heavy index to a new high. In addition, the surge was fueled by gains in tech stocks, including Alphabet, which made breakthroughs in quantum computing, as well as other tech giants like Meta Platforms and Amazon. Additionally, bull market leaders like Nvidia and Tesla also experienced gains following the inflation data. Moreover, despite the decline witnessed by the Dow, it is worth remarking that the overall market reacted positively to the in-line inflation data, with traders speculating that it was not high enough to deter the Federal Reserve from cutting interest rates at its December meeting. Furthermore, investors remain optimistic about the market’s direction going into year-end.

CRYPTO MARKET

Bitcoin rose by 5.14% for the day, with a value of $101,355.79 as of 3:00 PM CST, as stated by Coin Metrics

PRICE HIKES

In November, consumer prices increased at a faster rate, with an annual inflation rate of 2.7%. This rise was in line with expectations and signals ongoing concerns about inflation for households and policymakers. Moreover, excluding food and energy costs, core CPI stood at 3.3% annually. As of now, expectations remain optimistic that the Federal Reserve will lower the short-term borrowing rate by a quarter percentage point at their upcoming policy meeting to address the persistent inflation levels, which continue to exceed their 2% target. Furthermore, it is important to remark that while inflation has decreased from its mid-2022 high, some policymakers have expressed frustration with the inflation rate and have suggested that the pace of rate cuts may need to slow down if substantial progress is not achieved.

DEMAND SPIKED

Last week, there was a notable surge in the demand for mortgage refinancing as interest rates dropped for the third consecutive week. This drop in rates prompted many existing homeowners to seek potential savings through refinancing their mortgages. The Mortgage Bankers Association reported a 5.4% increase in total mortgage demand, primarily driven by a significant 27% rise in applications for refinancing compared to the previous week. Additionally, the average interest rate for 30-year fixed-rate mortgages decreased to 6.67%, marking a third consecutive weekly decline. Moreover, it is worth highlighting that while applications for purchasing homes did experience a slight decline of 4% for the week, they remained 4% above the levels seen a year ago.

CORRECTION LOOMING

Bitcoin is once again near the $100,000 mark, nevertheless, there are indications that a significant price correction of around 35% may be imminent as it has continued to approach key resistance levels against gold. Historical data shows that when the Bitcoin-to-Gold ratio reaches certain critical zones between 34 and 37, it often precedes market tops and subsequent downturns. Factors such as the overbought RSI and past instances where similar patterns led to substantial price declines highlight the vulnerability of Bitcoin to a sharp correction. Traders are observing these metrics closely, with a potential downside target of $65,000-69,000 by March 2025. However, a breakout above the current resistance level of $102,000 could signal a bullish rally towards $150,000, offering an alternative scenario.

NEW ALLIANCE

Circle and Binance, which are two major players in the cryptocurrency world, have set aside their past rivalries to collaborate on promoting USDC, a digital token tied to the U.S. dollar. This partnership comes at a pivotal moment as stablecoins are gaining traction in mainstream finance, challenging the dominance of Tether. Binance, previously a key player in the stablecoin market with its BUSD coin, faced regulatory scrutiny and pressure, leading to the winding down of BUSD in late 2023. Meanwhile, Circle, a staunch critic of Binance and Tether, has now agreed to work together with Binance following the latter’s settlement with the U.S. Justice Department. The alliance is seen as a strategic move to leverage Binance’s expansive network and Circle’s regulatory standing to drive the adoption and usage of USDC, bringing competition and innovation to the stablecoin market.

RISE DUE TO STIMULUS

Oil prices experienced a boost following China’s plans to improve its economy by adopting a more relaxed monetary policy. This move by China, which is a major oil importer, increased hopes for greater demand in the oil market. Additionally, it was reported that Chinese crude imports rose significantly in November after months of decline. On another front, the U.S. is considering imposing stricter sanctions on Russian oil, potentially complicating global trade relationships. These developments have led to fluctuations in oil prices, with market participants closely monitoring the situation. Furthermore, in the U.S., recent data showed an increase in both crude oil and fuel stocks, suggesting potential shifts in market dynamics.

STOCK MARKET

Dow Jones ended at $44,247.83 (-0.35%)

S&P 500 ended at $6,034.91 (-0.30%)

Nasdaq Composite ended at $19,687.24 (-0.25%)

The stock market witnessed losses for a second consecutive trading session primarily due to traders digesting a year-end rally to record levels and awaiting new U.S. inflation data set for release. Additionally, as Oracle shares continued decreasing due to the missing Wall Street’s estimates, and this contributed to the overall decline. Furthermore, investors are also closely watching the U.S. consumer price index report, which could influence the Federal Reserve’s decisions on interest rates at their upcoming meeting. Overall, the market appears to be experiencing seasonal softness and narrowing, with the Dow Jones Industrial Average, the S&P 500, and the Nasdaq Composite all experiencing slight losses, nevertheless, it is worth remarking that there are still hopes that participation will broaden out as the end of the year approaches.

CRYPTO MARKET

Bitcoin fell by 0.09% for the day, with a value of $96,527.48 as of 3:00 PM CST, as stated by Coin Metrics.

POSSIBLE ROCKY STAGE

Bitcoin prices have been fluctuating between $94,000 and $95,000 as a result of concerns surrounding Google’s new quantum-computing chip Willow, which initially sparked a slide in value but was swiftly dismissed by analysts. This has left directional traders in a state of uncertainty, awaiting market stability before taking definitive actions. The situation has also led to a decrease in overleveraged altcoin trading, with funding rates indicating more balanced conditions. Furthermore, as banks show bullish sentiment towards the dollar, potential impacts on assets denominated in the U.S. currency, such as Bitcoin, have been highlighted. In addition, there are speculations that President-elect Trump may face challenges in fulfilling his promises related to cryptocurrency, adding further layers of complexity to the current market environment.

SLIDING DOWN

As a result of the current volatility in Bitcoin’s value, BlackRock’s bitcoin exchange-traded fund (ETF), IBIT, has faced a significant drop this morning as the cryptocurrency market cooled down and unfounded fears about bitcoin’s security being compromised by quantum computing circulated on social media. The price of IBIT plummeted by 5.3% to $54.73, marking the largest single-day decline since early August. Furthermore, technical charts indicate a bearish trend for IBIT, with potential support levels at $51.54 and a need for a turnaround above $59.16 to alter this downward trajectory.

STRONG MARKET LEAD

Taiwan Semiconductor Manufacturing Co. (TSMC) has revealed a significant 34% increase in sales in November, reaching NT$276.1 billion ($8.5 billion). This surge in revenue is attributed to the continued high demand for artificial intelligence (AI) technology despite concerns over a potential slowdown in data center construction. As a key supplier for prominent tech companies such as Apple and Nvidia, TSMC has experienced a significant uptick in sales, with a combined growth of 31.4% in October and November. These results are seen as a positive indicator for the overall expansion and development of AI data centers, with TSMC expected to maintain its market lead over competitors like Samsung and Intel, and analysts are optimistic about a projected 36.3% sales increase for the current quarter. Moreover, despite challenges such as supply disruptions to Chinese AI-chip designers, TSMC to remain resilient, not only displaying strong sales, but also seeing its shares soaring by 80% this year, which in turn, reflects investor confidence in the company’s performance.

REPOSITIONING

Major global asset manager Pimco is adapting its investment approach in response to concerns surrounding the growing U.S. debt burden and potential inflation risks. The firm, responsible for overseeing a significant asset portfolio, is reducing its allocation to longer-term Treasury bonds as a precautionary measure against potential increases in longer-duration yields. Factors such as inflation, economic growth, and government policies could all contribute to rising yields, prompting Pimco to focus on shorter-term bonds that are perceived as more favorable. By diversifying their interest-rate exposure and favoring higher-quality bonds, Pimco aims to effectively navigate the uncertain economic environment. The company also advises caution regarding U.S. debt levels and recommends investing in European debt while expressing confidence in the growth potential of U.S. equities. This strategic pivot comes as bond yields for 1-month Treasury bills remain stable, while the 10-year Treasury yields exhibit a slight increase, reflecting the evolving dynamics in the financial markets.

MISSED ESTIMATES

Oracle shares have been declining since yesterday as the database software company reported fiscal second-quarter results that fell short of analysts’ estimates and issued a weaker-than-expected forecast. Earnings per share were lower than expected at $1.47 compared to the anticipated $1.48, and revenue also missed expectations at $14.06 billion versus $14.1 billion forecasted. Moreover, the company reported a 9% year-over-year sales growth. Nevertheless, despite this, net income rose by 26% to $3.15 billion. Furthermore, the cloud infrastructure business saw significant growth, with a 52% increase in revenue to $2.4 billion, and oracle also secured a deal with Meta to assist with AI projects using their infrastructure. In addition, for the upcoming quarter, Oracle predicts a revenue growth of 7% to 9%, and for 2026, Oracle has raised its revenue guidance to $66 billion, $1.5 billion above analyst forecasts.

STOCK MARKET

Dow Jones ended at $44,401.93 (-0.54%)

S&P 500 ended at $6,052.85 (-0.61%)

Nasdaq Composite ended at $19,736.69 (-0.62%)

The stock market began the week with losses across all major indexes due to tech shares struggling, including Nvidia sliding after a Chinese regulator announced an investigation into potential antimonopoly violations. Additionally, Advanced Micro Devices saw a decrease after being downgraded by Bank of America, and tech giants like Meta Platforms and Netflix also struggled. As a result of these developments, the Nasdaq Composite and the S&P 500 slid down, while the Dow Jones Industrial Average also joined the downward trend. Moreover, it seems like investors are moving away from risk-taking, nevertheless, it is important to remark that despite this, analysts believe the market will continue to advance through year-end, with the November consumer price index expected to show slight upticks in pricing pressures.

CRYPTO MARKET

Bitcoin fell by 4.59% for the day, with a value of $95,357.33 as of 3:00 PM CST, as stated by Coin Metrics.

ANOTHER MAJOR PURCHASE

MicroStrategy has recently made another substantial investment in Bitcoin by acquiring an additional 21,550 BTC for a total of $2.1 billion. This purchase, completed last week, brought the company’s total Bitcoin holdings to an impressive 423,650 tokens, valued at nearly $42 billion based on current market prices. By selling approximately $2.13 billion in shares during the same period to finance this purchase, MicroStrategy has continued its aggressive accumulation of the digital asset under the leadership of Executive Chairman Michael Saylor. Moreover, it is important to remark that the surge in Bitcoin acquisitions by the company has not only solidified its position as a significant player in the crypto space but has also likely contributed to Bitcoin’s price surge, culminating in a historic crossing of the $100,000 mark for the cryptocurrency. Furthermore, the continued bullish activity around Bitcoin was further evidenced by the substantial inflows into U.S. spot Bitcoin ETFs, which received $2.73 billion in fresh capital last week, as per data from Farside Investors.

REGULATORY SCRUTINY

Nvidia is currently facing scrutiny from Chinese regulators due to suspicions of violating the country’s anti-monopoly law in relation to its acquisition of Mellanox. The State Administration for Market Regulation in China has initiated the probe, highlighting the growing competition between the U.S. and China in the semiconductor industry. This investigation has caused Nvidia’s shares to drop by about 2% this morning. Moreover, the Biden administration has also imposed restrictions on chip sales to China, impacting Nvidia’s ability to sell its advanced AI chips in the country. Nevertheless, it is still worth highlighting that despite these challenges, Nvidia’s stock has performed well this year, surging by almost 188%, contributing to the overall growth of the technology sector and the market as a whole.

SHINING AGAIN

Gold prices have increased, with spot gold rising by 0.9% to $2,655.81 per ounce, and U.S. gold futures climbing by 0.7% to $2,678.20. The price surge is attributed to lower U.S. interest rates and strong demand from central banks. In addition, analysts have noted a positive response to China’s decision to restart gold purchases, after halting them in May, which could potentially drive investor demand. The move by the People’s Bank of China to increase gold holdings signals its proactive approach amidst global economic conditions. Moreover, it is worth noting that various factors such as central bank buying, easing monetary policies, and geopolitical uncertainties have propelled gold to reach record highs this year, setting it on course for its best performance since 2010 with a considerable 28% increase to date. Furthermore, investors are closely watching economic indicators and are predicting a likely interest rate cut at the next Fed meeting, which is expected to impact gold prices further.

INTERNATIONAL NEWS

European markets have started the week on a positive note, as luxury and mining stocks are seeing gains on hopes of economic stimulus in China. The Stoxx 600 was up by 0.27%, though trading was choppy with mixed performances in different sectors and regional bourses. Hong Kong stocks surged nearly 3% following China’s plans for proactive fiscal measures and looser monetary policy for the coming year, boosting European luxury stocks like Kering. Despite this, Asian markets had a mixed session, with South Korea’s Kospi falling over 2% due to political uncertainties after President Yoon Suk Yeol survived an impeachment vote. Additionally, there are concerns about the geopolitical situation in the Middle East following the ousting of Syrian President Bashar al-Assad, with Western leaders cautious about the potential for a power vacuum and increased instability in the region.

KEY EVENTS HAPPENING THIS WEEK

MONDAY: Wholesale inventories report for October.

TUESDAY: U.S. productivity third quarter revision and NFIB optimism index report for November.

WEDNESDAY: Consumer price index (CPI) and core CPI reports for November, and monthly U.S. federal budget.

THURSDAY: Producer price index (PPI) and core PPI reports for November, and initial jobless claims for the week ending on December 7.

FRIDAY: Import price index and import price index minus fuel reports for November.

STOCK MARKET

Dow Jones ended at $44,765.71 (-0.28%)

S&P 500 ended at $6,075.12 (+0.25%)

Nasdaq Composite ended at $19,700.26 (+0.81%)

The stock market ended the week with mixed performances as the S&P 500 and Nasdaq Composite managed to recover from yesterday’s losses, and increased to fresh records. This was due to the latest jobs data, which came in slightly better than expected. As reported this morning, November labor report showed a decent increase in nonfarm payrolls but also revealed a softening labor market, and this gave traders confidence in a potential rate cut. Nevertheless, this data was not strong enough to deter the Federal Reserve from cutting rates later in the month, and as a result, the Dow Jones Industrial Average slipped, indicating some hesitancy among investors.

CRYPTO MARKET

Bitcoin rose by 2.75% for the day, with a value of $101,576.22 as of 3:00 PM CST, as stated by Coin Metrics.

JOB CREATION REBOUNDED

In November, job creation rebounded after a sluggish October, largely due to the resolution of a labor strike and the lessening impact of severe storms in the Southeast. The Bureau of Labor Statistics reported an increase of 227,000 nonfarm payrolls, showing a significant improvement from the prior month’s 36,000. Although the unemployment rate rose slightly to 4.2%, job gains were concentrated in key sectors like healthcare, leisure, hospitality, and government. However, retail trade experienced a decline of 28,000 jobs heading into the holiday season, potentially impacted by the later timing of Thanksgiving. Average hourly earnings also rose by 0.4%, with a 4% growth on a 12-month basis, exceeding expectations. Market reactions were mixed, with stock futures edging higher and Treasury yields decreasing, while the possibility of a Federal Reserve interest rate cut gained traction.

STILL RESILIENT DESPITE VOLATILITY

Gold prices have slightly increased after experiencing a second consecutive weekly decline. Spot gold rose by 0.2% to $2,637.12 per ounce, while U.S. gold futures climbed 0.4% to $2,659.00. This week, gold saw a 0.5% decrease, hitting its lowest level since November 26, and analysts attribute this trend to a less optimistic sentiment among short-term and technical traders. The World Gold Council reported outflows from global gold exchange-traded funds (ETFs) in November after six months of inflows, nevertheless, as there is still a 68% chance of an additional 25-basis-point interest rate cut anticipated at the Fed’s upcoming meeting, this potential rate cut may drive up the appeal of holding gold, as lower interest rates generally boost the precious metal’s value.

RECORD-BREAKING FIGURES

In the past five days, there has been a surge in net inflows into U.S. spot ether exchange-traded funds (ETFs), notably reaching a record high of $428.5 million as of yesterday. BlackRock’s ETHA dominated these inflows, receiving a net $292.7 million, another record-breaking figure. The overall net inflows for ether ETFs in the recent five-day period totaled nearly $800 million as per data from Farside Investors. This comes as the value of the second-largest cryptocurrency, ether, has risen by approximately 60% over the past month, currently trading at around $3,900. Moreover, it is worth noting that despite challenges such as outflows from ETHE and limited trading options, spot ether ETFs have collected over $1.3 billion in net inflows since their launch in July. Additionally, bitcoin ETFs also experienced substantial inflows, led by BlackRock’s iShares Bitcoin Trust (IBIT), which acquired $770.5 million in net inflows.

UNSTABLE TREND

Despite the rollercoaster ride that Super Micro has experienced this year, with its shares experiencing significant volatility, it has recently received a boost. Let’s recall that although the company’s stock initially skyrocketed due to the strong growth in the AI infrastructure sector and its unique server cooling solutions, there were concerns about its accounting practices emerged, leading to a sharp decline in stock value, which were worsened by allegations of manipulation. This situation escalated with investigations by regulatory agencies and the resignation of its auditor, Ernst & Young, nevertheless, despite this challenges, an independent special committee concluded that no wrongdoing had occurred, and this led to a surge in Super Micro stock price. Nevertheless, uncertainties remain as the company makes changes to senior positions and faces ongoing scrutiny. Therefore, investors are being recommended to carefully weigh the risks and rewards of investing in Super Micro Computer amidst this complex situation.

INTERNATIONAL NEWS

European markets experienced a slight uptick today as investors closely monitored the unfolding political developments in France. Despite the ongoing political turmoil within the country, particularly the toppling of Prime Minister Michel Barnier’s government following a controversial budget decision, the CAC 40 index managed to climb 1.3%. President Emmanuel Macron, in response to the political upheaval, delivered a firm speech condemning politicians for losing sight of the voters’ interests. While Macron affirmed his commitment to serving out his presidency until 2027, Barnier resigned from his position but will continue to serve in a caretaker capacity as Macron seeks his replacement. In Asia, markets exhibited a mixed performance, with attention focused on the political instability in South Korea due to the temporary martial law declaration by President Yoon Suk Yeol.

STOCK MARKET

Dow Jones ended at $44,765.71 (-0.55%)

S&P 500 ended at $6,075.12 (-0.19%)

Nasdaq Composite ended at $19,700.26 (-0.18%)

The stock market witnessed losses across all major indexes due to concerns about stretched valuations and lack of enthusiasm or euphoria in the market. Investors were cautious as they awaited the release of key U.S. employment data due tomorrow, which could impact the Federal Reserve’s rate decision later in the month. Additionally, despite solid gains in the previous session, the record-high valuations of the major indexes raised concerns among traders. The outlook for the labor market and the economy, as stated by Fed Chair Jerome Powell, also influenced investor sentiment and contributed to the decline in the S&P 500, the Nasdaq Composite and the Dow Jones Industrial Average.

CRYPTO MARKET

Bitcoin rose by 0.61% for the day, with a value of $99,128.10 as of 3:00 PM CST, as stated by Coin Metrics.

MILESTONE REACHED

Bitcoin has reached a significant milestone as it has finally exceeded the $100,000 mark for the first time. This surge was triggered by President-elect Donald Trump’s announcement of nominating a new SEC chair, Paul Atkins, who is seen as supportive of the cryptocurrency industry. In addition, the rise in bitcoin’s value is also attributed to institutional investors recognizing the potential and value of bitcoin, which has led to increased demand and a boost in its price. Moreover, it is worth noting that the overall sentiment is optimistic, and there are hopes for more crypto-friendly initiatives in the future, such as establishing a national strategic bitcoin reserve and introducing tax-free crypto transactions.

MARKET FRENZY

Following the remarkable rise of Bitcoin, the market for cryptocurrency-related stocks has been heating up. Companies like MicroStrategy, Riot Platforms, and Mara Holdings are reporting significant gains in premarket trading. MicroStrategy, closely linked to Bitcoin due to its active acquisition of the digital currency, has seen its stock value skyrocket. Additionally, Riot Platforms and Mara Holdings, both specializing in Bitcoin mining and digital infrastructure, have also experienced positive upticks. Furthermore, online brokerages Robinhood and Coinbase Global, which facilitate crypto trading, have also experienced a rise in their respective stocks.

COOLING DOWN

In regards to the latest data on unemployment benefits in the United States, there was a moderate increase in new applications last week, indicating a slight cooling in the labor market. The Labor Department reported that initial claims rose to 224,000, slightly higher than the expected 215,000 claims. Despite this increase, the data suggests steady job growth and a rebound in nonfarm payrolls for November. However, reports from the Federal Reserve have highlighted sluggish hiring activity and minimal job turnover in recent weeks, leading to concerns about future job growth. The rise in continuing claims for unemployment benefits also poses a potential risk of an increase in the unemployment rate. As a response to these uncertainties, including threats of tariffs and proposed tax cuts, the Federal Reserve is expected to implement further interest rate cuts to address the economic challenges ahead.

PRODUCTION INCREASES STALLED

Oil prices have increased due to the decision of OPEC+ members to postpone the planned rise in crude production. U.S. crude oil prices went up by 50 cents to reach $69.04 per barrel, while Brent crude futures saw a rise of 46 cents to $72.77 per barrel. This increase came after an agreement by eight OPEC+ members, led by Saudi Arabia and Russia, to maintain voluntary production cuts of 2.2 million barrels per day until March 2025. These cuts will then be gradually reduced monthly until September 2026, with an additional set of cuts remaining in place until December 2026. However, challenges exist for the group in trying to increase oil production to meet market demand, with oversupply concerns raised by the International Energy Agency predicting an excess of 1 million barrels per day in global supply next year, even with the current cuts in place.

STANDING STRONG

The British pound has been on the rise for the last three days, and it has rebounded from the low point it reached in November. After hitting $1.2475 on November 22, the pound has climbed to $1.2721. Meanwhile, the euro remained steady at 82.78 pence against the pound. The pound’s recent fluctuations have largely been influenced by the U.S. dollar, dropping from a high point in October due to strong U.S. job market performance and further decreasing after Donald Trump’s re-election. However, the pound stabilized over the past week as the Bank of England data indicated a slight cooling in British employers’ expectations for wage growth. Moreover, it is worth remarking that the pound has been less vulnerable to Trump’s tariffs due to the UK’s service-oriented economy, which has resulted in a trade surplus with the U.S. This has allowed the pound to remain resilient amidst currency fluctuations in other economies.

STOCK MARKET

Dow Jones ended at $45,014.04 (+0.69%)

S&P 500 ended at $6,086.49 (+0.61%)

Nasdaq Composite ended at $19,735.12 (+1.30%)

The stock market witnessed gains across all major indexes, including the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite, as tech shares surged following strong reports from companies like Salesforce and Marvell Technology. This led to record highs being reached by the S&P 500 and Nasdaq, with the Dow closing above 45,000 for the first time. Additionally, investor optimism was fueled by positive economic indicators, such as Federal Reserve Chair Jerome Powell’s comments on a strong economy and a cautious approach to rate cuts.

CRYPTO MARKET

Bitcoin rose by 2.75% for the day, with a value of $98,948.90 as of 3:00 PM CST, as stated by Coin Metrics.

CRYPTO ROLLERCOASTER

Over the past day, the cryptocurrency market has been on a rollercoaster ride, experiencing significant losses totaling over $588 million. Major cryptocurrencies like XRP, Bitcoin, Ethereum, and Dogecoin have all faced drastic price fluctuations, with XRP leading the way in liquidations at $69 million. The market was particularly affected by XRP’s extreme volatility, which caused over $90 million in liquidations within a single day. Bitcoin and Ethereum also saw substantial losses, with $60 million and $57.94 million in liquidations, respectively. Dogecoin, typically known for its stability, surprisingly had $22.5 million in liquidations. Political unrest in South Korea added to the market’s uncertainty, especially on exchanges like Upbit. The dominant player in liquidations was Binance, followed closely by OKX and Bybit. As the market continues to fluctuate and with concerns about potential government actions regarding Bitcoin, investors are navigating through a turbulent period with little clear direction on where prices might go next.

GROWTH SLOWED

According to the latest report from ADP, the job market in November exhibited signs of slowing growth as private companies added 146,000 jobs, falling short of expectations. While sectors like education, health services, construction, and trade saw job gains, manufacturing experienced a setback with a loss of 26,000 positions. Small businesses, those with fewer than 50 employees, also reported a decline in job numbers. Despite the overall slowdown, there was a notable increase in wage growth by 4.8%, marking the fastest rise in 27 months. The performance across industries was mixed, with manufacturing notably weak. This data contrasted with ADP’s count exceeding the Bureau of Labor Services’ October nonfarm payrolls count. Looking ahead, the upcoming BLS report is anticipated to show a growth of 214,000 jobs, following disruptions like the Boeing strike and storms in the Southeast that impacted the previous month’s total.

SEIZING OPPORTUNITY

Potential homebuyers are actively responding to the recent decrease in mortgage rates and an increased availability of homes for sale, which has resulted in a surge in mortgage demand. According to the Mortgage Bankers Association, total mortgage application volume has risen by 2.8% compared to the previous week. The average interest rate for 30-year fixed-rate mortgages has dropped to 6.69%, the lowest level seen in over a month. This favorable rate environment has encouraged a 6% increase in mortgage applications for home purchases, marking the highest level since January. However, refinance applications declined by 1% from the prior week. While conventional refinance applications showed a decrease, FHA and VA refinances rebounded, reflecting varying borrower behaviors.

CALL FOR CAUTION

Federal Reserve Bank of St. Louis President Alberto Musalem is advocating for a more cautious approach to lowering interest rates amidst concerns of elevated inflation levels and a strengthening labor market. While acknowledging the need for continued rate cuts, Musalem emphasizes the importance of patience in order to mitigate the potential risks of excessive rate reductions. He believes that policy flexibility is crucial and suggests the possibility of either slowing down the pace of rate cuts or temporarily halting them to better evaluate the current economic landscape. Despite expressing confidence in the Fed’s progress towards achieving its employment and price stability targets, Musalem remains wary of the uncertainties surrounding future inflation rates and the sustainability of productivity growth. In essence, Musalem’s stance reflects a cautious and deliberative approach to monetary policy, stressing the need for prudence and careful assessment of evolving economic conditions, and investors should keep in mind that there is the possibility that at the next policy meeting, officials may opt for a restrained strategy in view of fluctuating economic data.

POSSIBLE PRICE PLUNGE

Based on a recent survey by law firm Haynes Boone LLP, banks are preparing for a potential scenario where U. S. oil prices could fall below $60 per barrel by the midway point of President-elect Donald Trump’s term. The survey, which involved 26 banks, predicts that the U.S. benchmark, West Texas Intermediate, may drop to $58.62 a barrel by 2027. Trump’s plans to increase shale production could further drive down oil prices, which have already declined by 2.4% this year due to concerns about a global surplus, and it has been highlighted that if prices continue to decrease, producers may need to reduce drilling budgets, potentially resulting in a 10% decrease in drilling rigs in the Permian Basin next year to maintain production levels in this highly active shale region. Nevertheless, it is worth noting that despite pledges from shale producers to restrict growth, as of now, their operational efficiencies are allowing them to produce more while spending less.

STOCK MARKET

Dow Jones ended at $44,782.00 (-0.17%)

S&P 500 ended at $6,049.88 (+0.05%)

Nasdaq Composite ended at $19,480.91 (+0.40%)

The stock market continued witnessing mixed performances as the S&P 500 and the Nasdaq Composite extended their gains for another trading session, while the Dow Jones Industrial Average continued its falling trend. Despite the gains witnessed by the S&P 500 and the Nasdaq, these were relatively small as investors were cautious while awaiting for the outcome of the upcoming job report on Friday, which could provide insight into the Federal Reserve’s actions in regards to rate cuts. Additionally, there were concerns about inflation, interest rates, and earnings, which were supporting a risk-on bias but also creating a bit of uncertainty for investors. Moreover, it is worth noting that the recent rally in stocks since the presidential election may have also led to some profit-taking and fluctuations in stock prices.

CRYPTO MARKET

Bitcoin fell by 0.23% for the day, with a value of $95,630.98 as of 3:00 PM CST, as stated by Coin Metrics.

SENTIMENT SHIFT

There seems to have been a switch in investor sentiment as Ethereum-based investment products have set a record high of $2.2 billion in net inflows, surpassing the previous peak in 2021. This surge, fueled by a substantial $466.5 million flowing into Ethereum products in one week, largely by U.S.-based exchange-traded funds (ETFs), marks a notable shift towards Ethereum over Bitcoin. The increasing interest in Ethereum can be attributed to its staking yield potential and potential U.S. regulatory approval. In contrast, Bitcoin faced challenges with a 7% drop and decline in dominance over the past two weeks, amidst a potential “alt-season” where altcoins like Ethereum and XRP outperformed. Amidst this dynamic market environment, digital asset funds also experienced significant inflows, with XRP funds notably recording a $95 million weekly inflow and a 69% price surge.

HINTING CUTS

In regards to what may happen at the upcoming Federal Reserve meeting, Fed Governor Christopher Waller has expressed his inclination towards supporting a rate cut. Waller’s decision is driven by concerns regarding recent inflation trends, with data indicating a possible slowdown in progress. However, it is important to remark that while Waller remains cautiously optimistic based on current economic information and inflation forecasts, he highlighted the importance of upcoming data surprises in potentially altering his stance. In addition, New York Fed President John Williams has echoed similar sentiments regarding inflation’s downward trajectory and the potential for policy adjustments towards a more neutral setting. Ultimately, although additional economic data is still pending for a clearer assessment of potential rate cuts, many investors are anticipating another rate cut based on the hints provided by these key Fed officials.

BANKING DILEMMA

Banks are increasing interest rates and introducing new fees on credit card holders in anticipation of a regulation aimed to limit late fees, a rule that experts now doubt will ever come into effect. This move has led to a significant rise in costs for consumers, with some retail card rates climbing to almost 36%. Synchrony and Bread Financial are among the banks that have raised annual percentage rates by 3 to 5 percentage points and imposed monthly statement fees in response. The potential regulatory changes have caused a spike in borrowing costs, particularly affecting individuals with lower credit scores who rely on store cards. While the proposed measure to cap late fees at $8 per incident was intended to benefit consumers, banks argue that it could shift costs onto those who pay on time. As a result, banks are taking proactive steps to safeguard their profitability amid the regulatory uncertainty, ultimately impacting cardholders with increased charges and fees.

SHORT- SELLERS RETREAT

Despite some experts being cautious of the current bullish trend in the stock market, the S&P 500 index continues to hit new highs, and as a result short-sellers are feeling the heat and are being forced to close their positions. Citigroup Inc. analysts are predicting a stellar year for the index, and have highlighted that the allure remains strong driven by technology stocks and a general preference for American assets. In contrast, Euro Stoxx 50 futures are witnessing a bearish trend, leading to increased ETF outflows as investors steer clear of European stocks due to slow economic growth and political uncertainties in France and Germany. Despite a prevalent short position on European equities, there are early indicators of investors cautiously reentering the market through DAX and FTSE 100 futures. However, the current political landscape in France may dampen enthusiasm for European equities among investors hesitant about their European holdings.

DOLLAR DOMINANCE

In the global currency market, the U.S. dollar is currently experiencing a surge in value as both the euro and the Chinese yuan face challenges. Political instability in France is contributing to the weakening of the euro, while trade tensions and a slowing economy are putting pressure on the yuan. These factors are causing investors to turn to the dollar as a safe haven currency, leading to its higher valuation. Additionally, anticipation of a potential interest rate increase in Japan is bolstering the dollar against the yen. Moreover, market participants are closely monitoring forthcoming U.S. employment data for insights into potential Federal Reserve rate adjustments, and are also awaiting the possible implications of President-elect Donald Trump’s tariff threats.

STOCK MARKET

Dow Jones ended at $44,782.00 (-0.29%)

S&P 500 ended at $6,047.15 (+0.24%)

Nasdaq Composite ended at $19,406.95 (+0.97%)

The stock market started off the month witnessing mixed performances as the S&P 500 and the Nasdaq Composite reaching new record highs, while the Dow Jones decreased. The gains by the S&P 500 and the Nasdaq were mainly influenced by individual strong stock performances like Tesla and Super Micro Computer, which saw significant gains. However, despite the gains and the fact that November was a strong month for the market due to the post-election optimism and potential tax cuts, there is still a sense of caution and uncertainty as investors await more details regarding the policies of the new administration. Jay Hatfield’s projection of a range-bound market for the remainder of the year adds to this sentiment. Furthermore, economic data showing improvement in the U.S. manufacturing sector, albeit still in contraction, also contributed to the mixed performances as investors assessed the overall economic outlook.

CRYPTO MARKET

Bitcoin fell by 1.37% for the day, with a value of $95,708.10 as of 3:00 PM CST, as stated by Coin Metrics.

MIXED START

Cryptocurrency markets saw a mixed bag of performance as the new trading week kicked off, with Ripple’s XRP notably standing out with a significant surge of over 21% within a 24-hour period. While XRP’s value skyrocketed, other major digital assets like Bitcoin and Ethereum experienced slight declines of around 2% each, with Solana registering a 5.4% drop. In addition, the overall global cryptocurrency market cap also dipped by 1.5% to $3.37 trillion, causing the CoinDesk Market Index to fall by 1.3%. Nonetheless, despite these recent falls in the digital-asset market, it is still worth remarking that Bitcoin exchange-traded funds concluded November with $105.28 billion in total assets, while ethereum ETFs reached $11.04 billion. Moreover, Ripple is gearing up to introduce its stablecoin RLUSD, geared towards providing a stable digital currency alternative amidst regulatory uncertainties surrounding XRP. This move comes as XRP’s value has soared by a whopping 375% in the past month, placing it as the third-largest cryptocurrency by market cap, surpassing Solana.

ONE MORE PURCHASE

Despite Bitcoin’s recent decline, MicroStrategy Inc. has once again made headlines, as the software revealed its recent acquisition of $1.5 billion in Bitcoin, marking their fourth consecutive weekly purchase. Over the span of November 25 to December 1, the firm added 15,400 tokens to their already substantial portfolio, which now totals around $38 billion worth of the digital asset. Let’s recall that MicroStrategy’s co-founder and Chairman, Michael Saylor, has been instrumental in the company’s transformation into a “Bitcoin Treasury” entity, and this shift has driven MicroStrategy’s shares to surge by more than 500% this year, surpassing the performance of many other prominent stocks. To finance these significant Bitcoin purchases, MicroStrategy has been utilizing the sale of convertible notes and at-the-market share offerings, setting the stage for further growth and diversification within the crypto market.

CASH HOARD

In other news, the stock market has been performing notably well, with some indexes surging to new heights. Nevertheless, despite this, many investors are paying close attention to Warren Buffett’s recent moves as his company Berkshire Hathaway revealed holding a record-high $325 billion in cash. Buffett has been gradually selling off stocks, and this could signal a potential upcoming correction. Let’s highlight that as Buffet advocates for a value investing strategy, he is stressing the importance of buying undervalued stocks and selling at a profit, and as the current market is displaying signs of inflated prices and soaring valuations, investors are being advised to brace themselves for a possible market downturn. Experts remark that despite the recent bullish trend, investors should always keep in mind the potential for market downturns, and one way to navigate such possible crashes is by maintaining cash reserves, avoiding overpriced investments, and remaining composed. This way, investors could mitigate possible losses, as well as capitalize on buying opportunities that may arise when the market corrects.

EXTENDING TRADING HOURS

It has been announced that a new stock exchange, 24X National Exchange, is set to launch in 2025, offering extended trading hours from 3:00 AM CST to 6:00 PM CST on weekdays, with potential expansion to 7:00 PM CST on Sunday through 6:00 PM CST on Friday. This move comes in response to the increasing trend of offering broader trading windows to accommodate global markets. With the aim of addressing the challenge faced by traders during market closures in their local time zones, 24X National Exchange aims to facilitate continuous U.S. equities trading for both institutional and retail customers. The initial focus will revolve around meeting the growing demand for overnight liquidity in U.S. equities in the Asia Pacific region, aligning with the exchange’s mission to provide accessible trading opportunities round the clock.

KEY EVENTS HAPPENING THIS WEEK

Monday: Construction spending report for October, ISM manufacturing and S&P final U.S. manufacturing PMI reports for November, and speeches from Federal Reserve Governor Christopher Waller and New York Fed President John Williams.

Tuesday: Job openings report for October, auto sales report for November, and speech from Fed Gov. Adriana Kugler.

Wednesday: Factory orders report for October, ISM services and S&P final U.S. services PMI and ADP employment reports for November, speech from Fed Chair Jerome Powell, and release of the Fed Beige Book.

Thursday: U.S. trade deficit for October, and initial jobless claims report for week ending on November 30.

Friday: Consumer credit report for October, U.S. employment report and unemployment rate for November, preliminary consumer sentiment for December, and speech from Chicago Fed President Goolsbee.

STOCK MARKET

Dow Jones ended at $44,910.65 (+0.42%)

S&P 500 ended at $6,032.38 (+0.56%)

Nasdaq Composite ended at $19,218.17 (+0.83%)

The stock market ended the week on a positive note, with the Dow Jones Industrial Average, the S&P 500, and the Nasdaq Composite reaching new highs in today’s shortened trading session. Gains in chip stocks, such as Nvidia and Lam Research, drove much of the momentum after reports indicated that U.S. restrictions on semiconductor sales to China would be less severe than expected. Broad market strength saw three out of five S&P 500 stocks closing higher, pushing the index and Dow to record levels. In addition, optimism following Trump’s election win continued to lift markets, with investors anticipating policies like tax cuts benefiting small-cap stocks, evidenced by the Russell 2000’s 10.8% surge in November. Moreover, seasonal trends and lighter trading volume due to the Thanksgiving holiday further contributed to the bullish market environment.

CRYPTO MARKET

Bitcoin rose by 2.30% for the day, with a value of $97,418.60 as of 3:00 PM CST, as stated by Coin Metrics.

AT CROSSROADS

Ethereum is facing a pivotal moment as changes in user experience are leading to a decline in activity and fees, casting doubt on its future viability in the cryptocurrency landscape. Ethereum’s traditional dominance in the decentralized finance (DeFi) sector is being challenged, as the network’s recent upgrades and the emergence of Layer-2 platforms have sparked discussions about its overall trajectory and strategic direction. Layer-2 blockchains are designed to enhance transaction efficiency, and solutions, such as Arbitrum and Optimism, have seen a notable uptick in transactions, nevertheless, Ethereum’s fees have experienced a significant decrease. Moreover, it is worth noting that although Ether’s price has experienced notable increases due to the latest optimism in the cryptocurrency market, it has not kept pace with Bitcoin’s growth, which as of 8:00 AM CST, is again trading close to the $100,000 mark.

FACING CHALLENGES

Banks are experiencing a decrease in trading revenues in the foreign exchange and rates sector, driven by factors such as tight margins and a challenging macroeconomic environment. Major financial institutions like Goldman Sachs and JPMorgan are projected to earn less revenue than in previous years, with a 17% and 9% decline expected in trading of Group-of-10 rates and currencies, respectively. Investor confidence has been wavering due to erratic economic data shifts and uncertainties surrounding global events, leading to a more cautious approach in making significant decisions. The industry is also facing tighter competition and electronic trading advancements, which are impacting trading margins. The upcoming Trump administration is anticipated to bring about heightened volatility in the foreign exchange market, prompting increased activity and positioning from market participants. While the landscape remains uncertain, there is optimism regarding potential improvements in currency trading revenues in the coming years, fueled by shifting market dynamics and corporate activity.

YIELD DECLINE

The 10-year Treasury yield fell to its lowest point since late October following the Thanksgiving holiday, with the rate dropping to 4.219%. This decline was echoed by the 2-year Treasury yield, which settled at 4.202%. While yesterday was characterized by a lack of significant economic data, the fact that the preferred inflation measure for October was 2.3% and that there was a greater-than-expected decrease in initial jobless claims, helped support bond market. Moreover, discussions from the recent Federal Reserve meeting hinted at a potential gradual reduction in interest rates if economic indicators remain consistent, and as of now, market forecasts currently predict a higher likelihood of a rate cut in December. However, it is worth noting that there are still concerns surrounding President-elect Trump’s proposed tariff increases targeting China, Mexico, and Canada, which may affect inflation rates, and in turn, cause more tentative approach from the Fed in terms of policy easing.

RISE OF MEGA TRADES

The corporate bond market is experiencing a transformation with the rise of large portfolio trades, facilitated by technological advancements and digital platforms. These mega trades, exceeding $500 million, which were once uncommon, now constitute a significant portion of US corporate bond transactions. The growth in exchange-traded funds and the adoption of automated trading strategies are driving this surge in portfolio trading volume, making it easier for investors to manage their portfolios and execute trades efficiently. Electronic trading platforms, such as MarketAxess and Tradeweb, are playing a crucial role in facilitating these transactions, with a significant portion of junk bond trading now conducted electronically. As dealers have become more reluctant to hold bonds on their balance sheets since the global financial crisis, portfolio trading has emerged as a preferred method for quickly offloading securities to other money managers.

INTERNATIONAL NEWS

In Japan’s capital city, Tokyo, consumer prices surged in November, surpassing the 2% target set by the central bank. This unexpected increase has fueled expectations for an imminent interest rate hike. The Tokyo core consumer price index, which excludes volatile food costs, rose by 2.2% compared to the previous year, outstripping initial forecasts. Another key index, which removes both food and fuel costs, also saw an increase, highlighting a rise in demand-driven inflation. This upward trend in prices indicates a positive sign for the Bank of Japan’s normalization of policy measures. However, external risks, such as potential tariff implementations by the incoming U.S. administration, could pose challenges for Japan’s export-reliant economy and potentially delay the interest rate hike. On the bright side, job opportunities in Japan improved in October, signaling a robust labor market and paving the way for sustained inflation driven by higher wages. Nevertheless, despite these positive indicators, uncertainties remain regarding the future economic landscape.