Stocks Drift, Bonds Climb Ahead of Thanksgiving: Markets Wrap
Stocks in Asia held to a narrow range on Thursday while bond yields slipped as traders took to the sidelines ahead of the US Thanksgiving holiday. The yen pared gains from its previous session. Shares in Japan, Australia and South Korea all advanced, while Chinese benchmarks opened lower after a rally in the prior session on speculation of further stimulus measures. Contracts for US stocks advanced after both the S&P 500 and Nasdaq 100 fell on Wednesday. Despite optimism about the potential for further intervention from Beijing, there are increased concerns and frustrations, from investors, Winnie Wu, China equity strategist for Bank of America Securities, said on Bloomberg Television. The potential for further support and the prospect of US tariffs on China mean even long-term investors are focusing on the next three to six months, or even three to six weeks, she said.
Stocks slip the day before Thanksgiving as Nvidia, Dell decline
Stocks fell in light trading on Wednesday as investors took some risk off the table following big November gains. The S&P 500 shed 0.38% to 5,998.74, snapping a seven-day winning streak. The Nasdaq Composite lost 0.6% to end at 19,060.48. The Dow Jones Industrial Average slipped 138.25 points, or 0.31%, to finish at 44,722.06, reversing course after trading up more than 140 points at session highs.
Oil edges lower after jump in US gasoline stocks, OPEC+ supply decision in focus
Oil prices edged lower in Asian trading on Thursday, after a surprise jump in U.S. gasoline stocks ahead of the nation’s Thanksgiving holiday sparked worry over demand in the top consumer of the motor fuel. Brent crude futures LCOc1 fell by 4 cents, or 0.1%, to $72.79 per barrel by 0220 GMT, while U.S. West Texas Intermediate crude futures CLc1 were a cent lower at $68.71 a barrel.
Gold falls on dollar strength, inflation data sparks caution on Fed rate cuts
Gold prices slipped on Thursday as the U.S. dollar strengthened, while investors assessed a flurry of economic data showing stalled inflation progress, suggesting the Federal Reserve might tread cautiously on further interest rate cuts. Spot gold fell 0.3% to $2,627.60 per ounce. U.S. gold futures shed 0.5% to $2,627.00. The dollar index was up 0.1%, reducing gold’s appeal for holders of other currencies. The market is focusing on the Fed’s rate cuts, with the latest Core Personal Consumption Expenditures (PCE) data suggesting slowing inflation, leading to expectations that the Fed’s policy next year might be less dovish than previously expected, said Kelvin Wong, OANDA’s senior market analyst for Asia Pacific. Meanwhile, the Fed’s struggle to bring inflation back to its 2% target, combined with the possibility of higher tariffs under the upcoming Trump administration may constrain the U.S. central bank’s ability to implement rate cuts next year.
Chinese yuan to hit record lows as U.S. tariff threat mounts, investment banks forecast
Chinese authorities are contending with a weakening yuan as global investment banks forecast the currency to hit record lows, in anticipation of U.S. president-elect Donald Trump following through with his tariff threats. Major investment banks and research firms project offshore yuan to weaken to an average 7.51 per dollar through the end of 2025, according to CNBC’s calculation of forecasts from 13 institutions. That would mark the currency’s weakest level on record, according to LSEG data going back to 2004. Trump on Monday said he would impose an additional 10% tariff on all Chinese goods coming into the U.S., according to a post on his social media platform Truth Social. Trump had already pledged 60% or higher tariffs on Chinese goods during his election campaign. U.S. tariffs would, other things equal, lead to an appreciation of the dollar, currencies of economies with close trade links to the U.S. would see the largest currency adjustments, said Jonas Goltermann, deputy chief markets economist at Capital Economics. The yuan would need to move to a level of 8.42 against the dollar to fully factor in 60% tariffs on all Chinese goods, according to the projection of Mitul Kotecha, Barclays’ head of FX & EM macro strategy of Asia. The offshore yuan has lost over 2% since the U.S. presidential election on Nov. 5, and last traded at 7.2514 on Thursday.
US GDP Grows at Solid 2.8% Pace, Helped by Consumer Spending
The US economy expanded at a solid pace in the third quarter, largely powered by a broad-based advance in consumer spending and steady business investment. Gross domestic product increased at a 2.8% annualized pace in the third quarter, the second estimate of the figures from the Bureau of Economic Analysis showed Wednesday. The economy’s primary growth engine, consumer spending, advanced 3.5%, the most this year.
PCE inflation rises to 2.3% annual growth in October, ‘core’ climbs 2.8%
An inflation metric closely monitored by the Federal Reserve climbed higher in the year to October, potentially offering a reason for the central bank to pause its rate-cutting cycle next month. The personal consumption expenditures price index accelerated to a 2.3% annual increase during the month, from a reading of 2.1% in September. The figure was in line with economists’ estimates. On a monthly basis, the index grew 0.2%, at the same pace as in September. Meanwhile, the so-called core metric, which strips out more volatile items like food and fuel, came in at 2.8% annually, ahead of September’s 2.7%. Month-on month, it grew 0.3%, unchanged from the previous month, in line with expectations.
South Korea unexpectedly reduces benchmark lending rates, first back-to-back cuts since 2009
South Korea on Thursday cut its benchmark interest rate by 25 basis points in a surprise move, as the country strives to boost its economy amid growth concerns. This was the first time the BOK enacted two back-to-back cuts since 2009. It had cut rates by 25 bps in its last meeting in October. Economists polled by Reuters had estimated the bank to hold rates at 3.25%. The rate cut follows a weaker-than-expected GDP reading in the third quarter. GDP expanded by 1.5% year on year, below the 2% expected by economists polled by Reuters. The BOK on Thursday lowered its GDP outlook to 2.2% for 2024, down from 2.4% forecast in August. The full year growth outlook for 2025 was cut to 1.9% from 2.1%. Speaking to CNBC’s Squawk Box Asia after the decision, Kathleen Oh, Morgan Stanley’s chief Korea and Taiwan economist, said the cut was indeed a surprise. It shows the weight the BOK was giving to the deteriorating growth outlook, especially amid slowing exports, she added.
Japan seen reaping record tax revenues in fiscal 2024, Reuters reports
Japan will likely see tax revenues hit a fresh high for the fifth straight year in the current fiscal year ending in March 2025, four government sources told Reuters. The government will tap the additional revenues to fund part of a 13.9 trillion yen ($91.7 billion) spending package aimed at cushioning the blow to households from rising living costs. It will also issue new government debt exceeding 6 trillion yen, the people said, declining to be identified because the information is not public. Total nominal tax revenues for the current fiscal year, initially estimated at 69.6 trillion yen, will likely increase to around 73.4 trillion yen due to robust corporate profits and rising inflation, the sources said.
The newly named A.P. Møller adds to a growing fleet of Maersk vessels that are able to run on methanol as well as traditional marine fuels. Maersk says ships running on green methanol can save 280 tons of CO2 per day, making them a key step in the company’s goal of reaching net-zero emissions by 2040.
Lebanon Cease-Fire Starts After Israel, Hezbollah Reach Deal
A cease-fire between Israel and the Lebanese militant group Hezbollah started early Wednesday, after the sides reached a deal following weeks of US-mediated talks.
US Says Ukraine Needs More Troops, Not Only Weapons, to Win War
The White House said Ukraine must recruit more soldiers for the war against Russia, including by lowering the draft age, as a lack of manpower rather than weapons is the country’s most pressing need. President Volodymyr Zelenskiy’s government should consider lowering the recruitment age to 18 from 25 to create a much-needed pipeline of new troops to rotate into the front lines, a senior administration official told reporters Wednesday. The message is the clearest signal yet of impatience from the US and its allies over Zelenskiy’s reluctance to recruit younger soldiers. The Ukrainian leader has said that there’s no need to lower the draft age, an idea which had been pushed by allies in response to his request for security and economic guarantees he deemed the country’s victory plan. Zelenskiy’s office didn’t respond to a request for comment sent outside normal business hours in Kyiv.
BlackRock Near Deal to Buy HPS for Close to $12 Billion, FT Says
BlackRock Inc. is close to an agreement to buy private credit group HPS Investment Partners, as the world’s largest asset manager tries to compete in the fast-growing alternatives space, the Financial Times reported. The two sides have agreed on the broad outline of the deal with a goal of announcing general terms after the Thanksgiving holiday, the newspaper reported on Thursday, citing people familiar with the matter. HPS had been working toward an initial public offering earlier this year that would have valued it at about $10 billion. Two of the people told the FT the final price would be closer to $12 billion. Representatives for BlackRock declined to comment to Bloomberg. HPS didn’t respond to a request for comment, the FT said.
Sensex, Nifty trade weak; higher volatility expected on derivative expiry day
Sensex, Nifty, Share Price LIVE: Indian benchmark indices, Sensex and Nifty, opened flat on Thursday, showing a positive bias amidst mixed global cues. Sensex dipped 329.77 pts or 0.41 % to trade below 80,000 level at 79,904.31 as at 10.36 am Analysts anticipate heightened volatility in individual stocks due to derivative contract settlements. Market sentiment has been bolstered by easing geopolitical tensions and record highs on Wall Street, alongside resuming foreign portfolio inflows after two months of selling. However, Emkay Wealth Management predicts potential time corrections due to high valuations, while also highlighting stock-specific opportunities. Meanwhile, JM Financial sees an opportunity for India to benefit from US President-elect Trump’s tax proposal, particularly with tariffs targeting China. The options market reflects balanced sentiment, and India’s VIX dropped by 4.44%, signalling a bullish outlook as volatility levels remain under control, fostering buying interest.
Nvidia stock falls more than 10% in a week as Trump talk tariffs
While Nvidia’s (NVDA) shares have tripled in value so far this year, its shares dropped more than 10% in the week after it reported fiscal third-quarter earnings. The chipmaker’s shares were down by about 2.3% during Wednesday afternoon trading and was down by almost 10.4% over the past five days. After the company reported record fiscal third-quarter earnings last week, Nvidia’s shares fell by almost 3.5% in after-hours trading. The decline continued the following morning, with the stock dropping around 1%. Despite beating revenue estimates for another straight quarter, Nvidia set its fiscal fourth quarter revenue guidance at $37.5 billion, plus or minus 2%, only slightly above what analysts were expecting. The stock slide deepened Monday, when Nvidia’s shares dropped by more than 4% after Reuters (TRI) reported that the company’s executive vice president of Worldwide Field Operations Jay Puri had met with Chinese vice commerce minister Wang Shouwen in Beijing. President-elect Donald Trump has pledged to raise tariffs on Chinese imports by 60% or more when he takes office in January, recently adding that he would impose an additional 10% tariff on all of their many products coming into the United States of America until China stops the flow of fentanyl and other drugs into the US.
HP, Dell’s weak forecasts spark share selloff, doubts over PC market recovery
Shares of Dell (NYSE:DELL) and HP (NYSE:HPQ) fell on Wednesday after the personal computer makers issued forecasts that cast doubt on a market recovery driven by artificial intelligence-enabled PCs. Dell tumbled 11%, with the company set to shed about $11 billion from its $99.50 billion market value, after it forecast quarterly revenue below estimates. HP dropped about 5% and its market capitalization was set to shrink by nearly $2 billion, from $37.68 billion on Tuesday, following a quarterly profit projection that was short of analysts’ view. Traditional PC demand has weakened after a post-pandemic boom, while AI-powered computers have yet to see mass adoption despite some interest from corporate and education sectors.
