02 Dec

COT Stock Market Charts: Speculator Bets led by S&P500-Mini & DowJones-Mini

By InvestMacro

Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC).

The latest COT data is updated through Tuesday November 28th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets.

Weekly Speculator Changes led by S&P500-Mini & DowJones-Mini

The COT stock markets speculator bets were higher this week as four out of the seven stock markets we cover had higher positioning while the other three markets had lower speculator contracts.

Leading the gains for the stock markets was the S&P500-Mini (15,053 contracts) with the DowJones-Mini (9,700 contracts), the Nasdaq-Mini (2,234 contracts) and the Russell-Mini (1,753 contracts) also showing positive weeks.

The markets with the declines in speculator bets this week were the MSCI EAFE-Mini (-3,786 contracts), the VIX (-105 contracts) and the Nikkei 225 (-121 contracts) also registering lower bets on the week.

Data Snapshot of Stock Market Traders | Columns Legend
Nov-28-2023OIOI-IndexSpec-NetSpec-IndexCom-NetCOM-IndexSmalls-NetSmalls-Index
S&P500-Mini2,279,89428-65,0275521,9594343,06854
Nikkei 22517,20443-2,360501,5044585639
Nasdaq-Mini293,315757,27850-10,902313,62481
DowJones-Mini98,35761-24,6082729,42778-4,81920
VIX390,75267-47,5367848,57619-1,04091
Nikkei 225 Yen65,6796515,065814,80124-19,86643

 

Strength Scores led by the VIX

COT Strength Scores (a normalized measure of Speculator positions over a 3-Year range, from 0 to 100 where above 80 is Extreme-Bullish and below 20 is Extreme-Bearish) showed that the VIX (78 percent) leads the stock markets this week. The S&P500-Mini (55 percent) and the Nikkei 225 (50 percent) come in as the next highest in the weekly strength scores.

On the downside, the MSCI EAFE-Mini (2 percent) comes in at the lowest strength level currently and is in Extreme-Bearish territory (below 20 percent). The next lowest strength score is the DowJones-Mini (27 percent).

Strength Statistics:
VIX (77.5 percent) vs VIX previous week (77.6 percent)
S&P500-Mini (55.0 percent) vs S&P500-Mini previous week (52.8 percent)
DowJones-Mini (26.9 percent) vs DowJones-Mini previous week (6.0 percent)
Nasdaq-Mini (50.1 percent) vs Nasdaq-Mini previous week (46.7 percent)
Russell2000-Mini (42.1 percent) vs Russell2000-Mini previous week (41.0 percent)
Nikkei USD (49.8 percent) vs Nikkei USD previous week (50.7 percent)
EAFE-Mini (2.0 percent) vs EAFE-Mini previous week (5.4 percent)

 

DowJones-Mini tops the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that the DowJones-Mini (23 percent) leads the past six weeks trends for the stock markets.

The MSCI EAFE-Mini (-31 percent) leads the downside trend scores currently with the VIX (-16 percent) coming in as the next market with lower trend scores.

Strength Trend Statistics:
VIX (-16.5 percent) vs VIX previous week (-21.9 percent)
S&P500-Mini (-0.3 percent) vs S&P500-Mini previous week (2.1 percent)
DowJones-Mini (22.9 percent) vs DowJones-Mini previous week (0.7 percent)
Nasdaq-Mini (-10.9 percent) vs Nasdaq-Mini previous week (-4.3 percent)
Russell2000-Mini (-6.6 percent) vs Russell2000-Mini previous week (6.1 percent)
Nikkei USD (-0.7 percent) vs Nikkei USD previous week (-4.5 percent)
EAFE-Mini (-30.9 percent) vs EAFE-Mini previous week (-28.4 percent)

Individual Stock Market Charts:

VIX Volatility Futures:

VIX Volatility Futures COT ChartThe VIX Volatility large speculator standing this week resulted in a net position of -47,536 contracts in the data reported through Tuesday. This was a weekly decrease of -105 contracts from the previous week which had a total of -47,431 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 77.5 percent. The commercials are Bearish-Extreme with a score of 19.5 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 91.1 percent.

Price Trend-Following Model: Weak Uptrend (Possible Trend Change)

Our weekly trend-following model classifies the current market price position as: Weak Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

VIX Volatility Futures StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:23.148.96.7
– Percent of Open Interest Shorts:35.336.57.0
– Net Position:-47,53648,576-1,040
– Gross Longs:90,304191,02526,270
– Gross Shorts:137,840142,44927,310
– Long to Short Ratio:0.7 to 11.3 to 11.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):77.519.591.1
– Strength Index Reading (3 Year Range):BullishBearish-ExtremeBullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-16.511.238.0

 

S&P500 Mini Futures:

SP500 Mini Futures COT ChartThe S&P500 Mini large speculator standing this week resulted in a net position of -65,027 contracts in the data reported through Tuesday. This was a weekly lift of 15,053 contracts from the previous week which had a total of -80,080 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 55.0 percent. The commercials are Bearish with a score of 42.9 percent and the small traders (not shown in chart) are Bullish with a score of 54.3 percent.

Price Trend-Following Model: Weak Downtrend (Possible Trend Change)

Our weekly trend-following model classifies the current market price position as: Weak Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

S&P500 Mini Futures StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:12.473.311.4
– Percent of Open Interest Shorts:15.272.39.5
– Net Position:-65,02721,95943,068
– Gross Longs:281,7091,671,401258,805
– Gross Shorts:346,7361,649,442215,737
– Long to Short Ratio:0.8 to 11.0 to 11.2 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):55.042.954.3
– Strength Index Reading (3 Year Range):BullishBearishBullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-0.3-2.99.1

 

Dow Jones Mini Futures:

Dow Jones Mini Futures COT ChartThe Dow Jones Mini large speculator standing this week resulted in a net position of -24,608 contracts in the data reported through Tuesday. This was a weekly advance of 9,700 contracts from the previous week which had a total of -34,308 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 26.9 percent. The commercials are Bullish with a score of 77.8 percent and the small traders (not shown in chart) are Bearish with a score of 20.4 percent.

Price Trend-Following Model: Weak Downtrend (Possible Trend Change)

Our weekly trend-following model classifies the current market price position as: Weak Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

Dow Jones Mini Futures StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:22.665.011.9
– Percent of Open Interest Shorts:47.635.116.8
– Net Position:-24,60829,427-4,819
– Gross Longs:22,19663,96311,679
– Gross Shorts:46,80434,53616,498
– Long to Short Ratio:0.5 to 11.9 to 10.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):26.977.820.4
– Strength Index Reading (3 Year Range):BearishBullishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:22.9-18.31.1

 

Nasdaq Mini Futures:

Nasdaq Mini Futures COT ChartThe Nasdaq Mini large speculator standing this week resulted in a net position of 7,278 contracts in the data reported through Tuesday. This was a weekly gain of 2,234 contracts from the previous week which had a total of 5,044 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 50.1 percent. The commercials are Bearish with a score of 30.8 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 81.4 percent.

Price Trend-Following Model: Strong Uptrend

Our weekly trend-following model classifies the current market price position as: Strong Uptrend. The current action for the model is considered to be: New Buy – Long Position.

Nasdaq Mini Futures StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:26.856.714.5
– Percent of Open Interest Shorts:24.460.413.3
– Net Position:7,278-10,9023,624
– Gross Longs:78,702166,32942,502
– Gross Shorts:71,424177,23138,878
– Long to Short Ratio:1.1 to 10.9 to 11.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):50.130.881.4
– Strength Index Reading (3 Year Range):BullishBearishBullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-10.91.515.0

 

Russell 2000 Mini Futures:

Russell 2000 Mini Futures COT ChartThe Russell 2000 Mini large speculator standing this week resulted in a net position of -55,493 contracts in the data reported through Tuesday. This was a weekly increase of 1,753 contracts from the previous week which had a total of -57,246 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 42.1 percent. The commercials are Bullish with a score of 58.4 percent and the small traders (not shown in chart) are Bearish with a score of 36.9 percent.

Price Trend-Following Model: Downtrend

Our weekly trend-following model classifies the current market price position as: Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

Russell 2000 Mini Futures StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:13.780.64.9
– Percent of Open Interest Shorts:23.771.14.2
– Net Position:-55,49352,1493,344
– Gross Longs:75,264444,00126,746
– Gross Shorts:130,757391,85223,402
– Long to Short Ratio:0.6 to 11.1 to 11.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):42.158.436.9
– Strength Index Reading (3 Year Range):BearishBullishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-6.60.926.0

 

Nikkei Stock Average (USD) Futures:

Nikkei Stock Average (USD) Futures COT ChartThe Nikkei Stock Average (USD) large speculator standing this week resulted in a net position of -2,360 contracts in the data reported through Tuesday. This was a weekly fall of -121 contracts from the previous week which had a total of -2,239 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 49.8 percent. The commercials are Bearish with a score of 45.0 percent and the small traders (not shown in chart) are Bearish with a score of 39.1 percent.

Price Trend-Following Model: Weak Downtrend

Our weekly trend-following model classifies the current market price position as: Weak Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

Nikkei Stock Average Futures StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:13.165.121.5
– Percent of Open Interest Shorts:26.856.416.5
– Net Position:-2,3601,504856
– Gross Longs:2,25011,2043,693
– Gross Shorts:4,6109,7002,837
– Long to Short Ratio:0.5 to 11.2 to 11.3 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):49.845.039.1
– Strength Index Reading (3 Year Range):BearishBearishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-0.71.3-1.4

 

MSCI EAFE Mini Futures:

MSCI EAFE Mini Futures COT ChartThe MSCI EAFE Mini large speculator standing this week resulted in a net position of -62,032 contracts in the data reported through Tuesday. This was a weekly reduction of -3,786 contracts from the previous week which had a total of -58,246 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 2.0 percent. The commercials are Bullish-Extreme with a score of 96.1 percent and the small traders (not shown in chart) are Bearish with a score of 40.9 percent.

Price Trend-Following Model: Weak Downtrend

Our weekly trend-following model classifies the current market price position as: Weak Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

MSCI EAFE Mini Futures StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:4.891.43.0
– Percent of Open Interest Shorts:20.077.31.9
– Net Position:-62,03257,2524,780
– Gross Longs:19,593372,69312,373
– Gross Shorts:81,625315,4417,593
– Long to Short Ratio:0.2 to 11.2 to 11.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):2.096.140.9
– Strength Index Reading (3 Year Range):Bearish-ExtremeBullish-ExtremeBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-30.929.211.4

 

Article By InvestMacro – Receive our weekly COT Newsletter

*COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets.

The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting). See CFTC criteria here.

COT Updates Financial News Stock Market News
02 Dec

Speculator Extremes: SOFR-3M, Steel, Corn & Wheat lead Bullish & Bearish Positions

By InvestMacro 

The latest update for the weekly Commitment of Traders (COT) report was released by the Commodity Futures Trading Commission (CFTC) on Friday for data ending on November 28th.

This weekly Extreme Positions report highlights the Most Bullish and Most Bearish Positions for the speculator category. Extreme positioning in these markets can foreshadow strong moves in the underlying market.

To signify an extreme position, we use the Strength Index (also known as the COT Index) of each instrument, a common method of measuring COT data. The Strength Index is simply a comparison of current trader positions against the range of positions over the previous 3 years. We use over 80 percent as extremely bullish and under 20 percent as extremely bearish. (Compare Strength Index scores across all markets in the data table or cot leaders table)

Here Are This Week’s Most Bullish Speculator Positions:

3-Month Secured Overnight Financing Rate


The 3-Month Secured Overnight Financing Rate speculator position comes in as the most bullish extreme standing this week. The 3-Month Secured Overnight Financing Rate speculator level is currently at a 100.0 percent score of its 3-year range.

The six-week trend for the percent strength score totaled 18.1 this week. The overall net speculator position was a total of 527,237 net contracts this week with a rise of 27,337 contract in the weekly speculator bets.

Speculators or Non-Commercials Notes:

Speculators, classified as non-commercial traders by the CFTC, are made up of large commodity funds, hedge funds and other significant for-profit participants. The Specs are generally regarded as trend-followers in their behavior towards price action – net speculator bets and prices tend to go in the same directions. These traders often look to buy when prices are rising and sell when prices are falling. To illustrate this point, many times speculator contracts can be found at their most extremes (bullish or bearish) when prices are also close to their highest or lowest levels.

These extreme levels can be dangerous for the large speculators as the trade is most crowded, there is less trading ammunition still sitting on the sidelines to push the trend further and prices have moved a significant distance. When the trend becomes exhausted, some speculators take profits while others look to also exit positions when prices fail to continue in the same direction. This process usually plays out over many months to years and can ultimately create a reverse effect where prices start to fall and speculators start a process of selling when prices are falling.

Steel


The Steel speculator position comes next in the extreme standings this week. The Steel speculator level is now at a 98.6 percent score of its 3-year range.

The six-week trend for the percent strength score was 21.8 this week. The speculator position registered -233 net contracts this week with a weekly gain of 682 contracts in speculator bets.

Heating Oil


The Heating Oil speculator position comes in third this week in the extreme standings. The Heating Oil speculator level resides at a 90.2 percent score of its 3-year range.

The six-week trend for the speculator strength score came in at 3.8 this week. The overall speculator position was 37,349 net contracts this week with a boost of 7,447 contracts in the weekly speculator bets.

Cocoa Futures


The Cocoa Futures speculator position comes up number four in the extreme standings this week. The Cocoa Futures speculator level is at a 83.0 percent score of its 3-year range.

The six-week trend for the speculator strength score totaled a change of 0.2 this week. The overall speculator position was 71,646 net contracts this week with a dip of -1,193 contracts in the speculator bets.

Bloomberg Commodity Index


The Bloomberg Commodity Index speculator position rounds out the top five in this week’s bullish extreme standings. The Bloomberg Commodity Index speculator level sits at a 81.3 percent score of its 3-year range. The six-week trend for the speculator strength score was -3.9 this week.

The speculator position was -6,452 net contracts this week with an edge lower by -94 contracts in the weekly speculator bets.

This Week’s Most Bearish Speculator Positions:

Corn


The Corn speculator position comes in as the most bearish extreme standing this week. The Corn speculator level is at a 0.0 percent score of its 3-year range.

The six-week trend for the speculator strength score was -13.4 this week. The overall speculator position was -157,148 net contracts this week with a drop of -33,142 contracts in the speculator bets.

Wheat


The Wheat speculator position comes in next for the most bearish extreme standing on the week. The Wheat speculator level is at a 0.0 percent score of its 3-year range.

The six-week trend for the speculator strength score was -19.4 this week. The speculator position was -97,204 net contracts this week with a decline of -19,673 contracts in the weekly speculator bets.

E-mini SP MidCap400

The E-mini SP MidCap400 speculator position comes in as third most bearish extreme standing of the week. The E-mini SP MidCap400 speculator level resides at a 0.0 percent score of its 3-year range.

The six-week trend for the speculator strength score was -48.4 this week. The overall speculator position was -1,486 net contracts this week with a slide of -616 contracts in the speculator bets.

Swiss Franc


The Swiss Franc speculator position comes in as this week’s fourth most bearish extreme standing. The Swiss Franc speculator level is at a 1.0 percent score of its 3-year range.

The six-week trend for the speculator strength score was -9.1 this week. The speculator position was -20,289 net contracts this week with a decrease of -1,295 contracts in the weekly speculator bets.

Ultra 10-Year U.S. T-Note


Finally, the Ultra 10-Year U.S. T-Note speculator position comes in as the fifth most bearish extreme standing for this week. The Ultra 10-Year U.S. T-Note speculator level is at a 1.4 percent score of its 3-year range.

The six-week trend for the speculator strength score was -3.1 this week. The speculator position was -257,895 net contracts this week with a decrease of -23,489 contracts in the weekly speculator bets.

Article By InvestMacro – Receive our weekly COT Newsletter

*COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets.

The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting). See CFTC criteria here.

COT Updates Forex and Currency News Opinions
01 Dec

There is still disagreement on production quotas within OPEC+. Inflationary pressures are easing in the Eurozone

By JustMarkets

At Thursday’s close, the Dow Jones Index (US30) was up by 1.47%, while the S&P 500 Index (US500) added 0.38%. The NASDAQ Technology Index (US100) closed negative by 0.23% on Thursday. Stocks found support in US economic reports that showed jobless claims rose to a 2-year high and October core PCE rose less than expected, reinforcing expectations that the Federal Reserve has stopped raising interest rates.

Weekly jobless claims rose by 86,000 to a 2-year high of 1.927 million, indicating a weaker labor market than expectations of 1.865 million. In addition, the October core PCE deflator, the Fed’s preferred measure of inflation, declined to 3.5% y/y from 3.7% y/y in September, which matched expectations and was the slowest rate of increase in 2 years. However, hawkish comments from New York Fed President Williams and San Francisco Fed President Daly pushed bond yields higher and negatively impacted tech stocks as they dampened speculation that the Fed will soon cut interest rates.

Markets rate the probability of a 25 bps rate hike at the next FOMC meeting on December 12-13 at 4% and the probability of a 25 bps rate hike at the next FOMC meeting on January 30-31, 2024 as 0%. Markets also factor in a 47% probability of a 25 bps rate cut at the March 19-20, 2024 FOMC meeting and a more than 100% probability of the same 25 bps rate cut at the April 30-May 1, 2024 FOMC meeting. As recently as a week ago, the probability of a rate cut in May was 57%.

Salesforce Inc (CRM) shares are up more than 6% at the open, leading the S&P 500 and Dow Jones Industrials higher after the company reported Q3 adjusted EPS of $2.11, better than the consensus of $2.06 and raised its 2024 adjusted EPS guidance. Shares of Snap (SNAP) are up more than 7% after investment bank Jefferies upgraded the stock to a “hold” from a “buy” with a $16 price target. Pinterest (PINS) is up by more than 3% after Jefferies upgraded the stock to a “buy” from a “hold” rating with a $41 price target.

Equity markets in Europe were mostly up yesterday. Germany’s DAX (DE40) rose by 0.30%, France’s CAC 40 (FR40) gained 0.59%, Spain’s IBEX 35 (ES35) declined by 0.04%, and the UK’s FTSE 100 (UK100) closed positive 0.41%.

European stocks rose after the Eurozone’s consumer price index rose less than expected, pushing down 10-year German bond yields. A weaker-than-expected Eurozone CPI report for November reinforced expectations that the ECB is done raising interest rates. Eurozone CPI for November fell to 2.4% y/y from 2.9% y/y, better than expectations of 2.7% y/y and the smallest increase in 2 years. Core CPI for November also declined to 3.6% y/y from 4.2% y/y in October, better than expectations of 3.9% y/y. Weakening price pressures indicated that swap markets have priced in a 100% ECB rate cut of 25 bps for the ECB meeting on April 11.

On Thursday, OPEC+ countries agreed to cut oil production by 1.0 million bpd through June 2024. However, crude prices fell on the news as no details were provided on how the cut would be distributed among the organization’s representatives and how Russia’s 300,000 bpd export cut would be factored into the new totals. Delegates said the final details of the new agreement, including national production levels, would be announced by each country separately rather than in the usual OPEC+ communiqué. Investors reacted with disappointment as the rift between Angola (Africa’s second-largest oil producer) and other OPEC+ representatives persists and is a bearish factor, signaling more disputes within. On Thursday, Saudi Arabia said it would maintain its unilateral oil production cut of 1.0 million bpd through June 2024. The move would keep Saudi oil output at around 9 million bpd, the lowest in three years.

Natural gas prices declined for the fifth consecutive session on Thursday. The EIA’s unexpected increase in weekly natural gas inventories on Thursday pressured prices. The EIA reported that natural gas inventories rose by 10 bcf last week versus expectations of a 6 bcf decline. High inventories due to carryover balances from the mild winter of 2022/23 and weak heating demand have led to lower natural gas prices. As of November 26, natural gas storage in Europe is 97% full, above the 5-year seasonal average.

Asian markets were mostly up yesterday. Japan’s Nikkei 225 (JP225) was up by 0.50% for the day, China’s FTSE China A50 (CHA50) lost 0.17%, Hong Kong’s Hang Seng (HK50) added 0.29% on Thursday, and Australia’s ASX 200 (AU200) was positive 0.74%.

Economic news from Japan on Thursday was mixed for the JP225 index. On the bearish side, October retail sales unexpectedly fell by 1.6% m/m, which was weaker than expectations of a 0.4% m/m increase and was the biggest decline in 2 years. In contrast, the consumer confidence index for November unexpectedly rose by 0.4 to 36.1, stronger than expectations of a decline to 35.6. In addition, industrial production for October rose by 1.0% m/m, stronger than expectations of 0.8% m/m and the largest increase in the last 4 months.

In China, Caixin’s manufacturing Purchasing Managers’ Index (PMI) rose to 50.7 in November, beating expectations of 49.3 and sharply improving from the 49.6 seen in the previous month. The reading contradicts the government’s PMI data released on Thursday, which showed a larger-than-expected decline in manufacturing activity. However, the Caixin survey differs from the government survey in its coverage, as it focuses more on small private enterprises, as opposed to the large state-owned enterprises covered by the official survey. Investors typically use both surveys to get a broader picture of the Chinese economy.

S&P 500 (US500) 4,567.80 +17.22 (+0.38%)

Dow Jones (US30) 35,950.89 +520.47 (+1.47%)

DAX (DE40) 16,215.43 +48.98 (+0.30%)

FTSE 100(UK100) 7,453.75 +30.29 (+0.41%)

USD Index 103.52 +0.76 (+0.74%)

News feed for 2023.12.01:
  • – Japan Unemployment Rate (m/m) at 01:30 (GMT+2);
  • – Switzerland GDP (q/q) at 10:00 (GMT+2);
  • – German Manufacturing PMI (m/m) at 10:55 (GMT+2);
  • – Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+2);
  • – UK Manufacturing PMI (m/m) at 11:30 (GMT+2);
  • – Canada Unemployment Rate (m/m) at 15:30 (GMT+2).
  • – Canada Manufacturing PMI (m/m) at 16:30 (GMT+2);
  • – US ISM Manufacturing PMI (m/m) at 17:00 (GMT+2);
  • – US Fed Chair Powell Speaks at 18:00 (GMT+2).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Economics & Fundamentals Financial News
01 Dec

Week Ahead: SPX500_m poised for a ‘Santa Rally’?

By ForexTime 

  • S&P 500 gains 8.9% in November
  • December historically good month for stocks
  • Keep eye on US jobs report and ‘Santa Rally’ chatter
  • Prices trending higher but RSI signals overbought
  • Can SPX500_m bulls maintain hunger for gains?

Christmas may have come early for investors after the S&P 500 ended November 8.9% higher!

This was not only its biggest monthly gain since July 2022 but also its fourth-best month in 10 years.

As we enter December, the stock index could see heightened volatility thanks to key US economic data and growing chatter about a ‘Santa Claus Rally’.

Monday, 4th December

  • USD: US factory orders, durable goods

Tuesday, 5th December

  • CNH: China Caixin services PMI
  • AUD: Reserve Bank of Australia rate decision
  • EUR: Eurozone S&P Global Services PMI, PPI
  • JPY: Japan Tokyo CPI
  • USD: US ISM Services, Job openings

Wednesday, 6th December

  • AUD: Australia GDP
  • CAD: Bank of Canada rate decision
  • EUR: Eurozone retail sales, Germany factory orders
  • GBP: Bank of England biannual stability report
  • USD: US trade

Thursday, 7th December

  • CNH: China trade, forex reserves
  • AUD: Australia trade balance
  • EUR: Eurozone GDP, Germany industrial production
  • USD: US initial jobless claims

Friday, 8th December

  • JPY: Japan household spending, GDP
  • EUR: Germany CPI
  • USD: US jobs report, University of Michigan consumer sentiment

US equity bulls remain supported by cooling inflation, positive US economic data, and growing speculation around the Fed cutting interest rates in 2024. This is reflected in the SPX500_m which has created consistently higher highs and higher lows on the daily timeframe.

Note: SPX500_m tracks the S&P 500 index (the benchmark used to measure the stock performance of the 500 largest listed US companies)

With exactly one month left until the end of 2023, the question is whether SPX500_m bulls can maintain their hunger for gains.

Here are 3 factors to keep an eye on in the week ahead:

  1. ‘Santa Rally’ chatter 

With Christmas just around the corner, discussion around a potential ‘Santa Clause Rally’ is likely to be widely discussed across the board.

This financial phenomenon is where stocks generally rise in the last week of December and the first two trading days of the new year. 

It is not fully clear whether it’s purely psychological or triggered by some underlying financial forces, but history has shown that this is a recurring seasonal pattern.

Indeed, December has been a historically positive month for the S&P500 which has produced positive returns 75% of the time since 1994.

Markets seem to be in good spirits with chatter about a ‘Santa Rally’ possibly influencing the index over the next few weeks.

  1. US November jobs report 

On the data front, the US non-farm payrolls could offer fresh clues about what action the Federal Reserve will take beyond 2023.

The US economy is expected to have created 200,000 jobs in November, a noticeable pickup from the 150,000 jobs in October. The unemployment rate is forecast to remain unchanged at 3.9% while average hourly earnings are expected to tick lower to 4.0% year-on-year.

Given how tech stocks account for roughly 29% of the S&P 500 weighting, the incoming jobs report could spark volatility.

Note: Tech stocks influenced by interest rates because their value is based on earnings forecasted in the future.

Traders are currently pricing in a 60% probability of a 25-basis point cut by March 2024, with a cut by May 2024 fully priced, according to Fed Funds futures.

  • The SPX500_m is likely to trade lower if the US jobs report meets or exceeds forecasts and investors re-evaluate when the Fed will cut rates in 2024.
  • Should the US jobs report market expectations, this could reinforce bets around the Fed cutting rates – supporting the SPX500_m as a result.

  1. Technical forces

The SPX500_m remains in a bullish channel on the daily charts with prices trading above the 50, 100, and 200-day SMA. Although the path of least resistance points north, the Relative Strength Index (RSI) remains around 70 – suggesting that prices are heavily overbought. A technical rebound could be a possibility before bulls return to the driving seat.

  • The support at 4525 could provide bulls the foundation to attack the 2023 high at 4611 and 4660 – a level not seen since January 2022.
  • Should prices slip back under 4525, this may open a path back towards 4500 and 4470, respectively.

Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Opinions Stock Market News
30 Nov

Why the Fed should treat climate change’s $150B economic toll like other national crises it’s helped fight

By Jennie C. Stephens, Northeastern University and Martin Sokol, Trinity College Dublin 

Climate disasters are now costing the United States US$150 billion per year, and the economic harm is rising.

The real estate market has been disrupted, as home insurance rates skyrocket as wildfire and flood risks rise with the warming climate. Food prices have gone up with disruptions in agriculture. Health care costs have increased as heat takes a toll. Marginalized and already vulnerable communities that are least financially equipped to recover are being hit the hardest.

Despite this growing source of economic volatility, the Federal Reserve – the U.S. central bank that is charged with maintaining economic stability – is not considering the instability of climate change in its monetary policy.

Earlier this year, Fed Chair Jerome Powell declared unequivocally: “We are not, and we will not become, a climate policymaker.”

Powell’s rationale is that to maintain the Fed’s independence from politics and political cycles, it should use its tools narrowly to focus on its core mission of economic stability. That includes price stability, meaning keeping inflation low and maximizing employment. In Powell’s view, the Fed should stay away from social and environmental concerns that are not tightly linked to its statutory goals.

However, it is getting increasingly difficult for central banks to ensure stability if they do not integrate climate instability into their monetary policies.

As researchers with expertise in climate justice and central banks, we recently published a paper reviewing the monetary policy tools available to central banks around the world that could help slow climate change and reduce climate vulnerabilities.

With the new U.S. National Climate Assessment and other research making clear that U.S. policies and actions are insufficient to minimize climate instability and manage the growing economic costs, we believe it’s time to reconsider the role of central banks in responding to the climate crisis.

Rethinking interest rates

One thing central banks could do is set lower interest rates for renewable energy development. The Bank of Japan has used this strategy.

The Fed’s aggressive increases in interest rates in response to rising inflation have slowed the transformation toward a more sustainable society by supporting fossil fuels and making investments in renewable energy infrastructure more expensive. Offshore wind power has been particularly hard hit, with multiple multibillion-dollar projects canceled as higher interest rates raised the projects’ costs.

One way to introduce differentiated rates would be to create a special lending facility under which commercial banks could borrow money from the central bank at preferential interest rates if used for renewable energy deployment or other climate-friendly investments. Whether the Fed already has authorization to do that depends on interpretation of its current mandate.

While the U.S. Federal Reserve has not done it before, China’s central bank has used similar tools to incentivize renewable energy, and the Bank of Japan’s lending facility offers zero-interest loans for green investments.

Nudging banks to rethink investments

Despite the Fed’s proclaimed efforts not to pick winners and losers, its monetary policies have taken steps that favor established industries and companies, including the fossil fuel industry.

For example, the Fed supported the financial sector unconditionally during the COVID-19 pandemic to keep credit available to limit economic harm. Its massive purchases of corporate bonds resulted in subsidies to the fossil fuel sector.

Our analysis suggests two ways to help manage climate change now: The Fed can reinterpret its current statutory duties and start viewing climate action as a critical part of its role in maintaining economic stability within its existing mandate, as the European Central Bank has done, or the mandate of the Fed can be changed by Congress to explicitly include “green” transformation objectives, similar to the U.K.‘s mandate for the Bank of England.

Either of these options could empower the Fed to address climate change and support the government, businesses, banks, households and communities in financing climate mitigation and adaptation efforts.

Two maps showing extreme heat days rising almost everywhere and extreme precipitation increasingly common, particularly in the Eastern U.S.
Rising temperatures exacerbate climate risks, including droughts, wildfires and extreme storms. Global temperatures have already warmed by more than 1 degree Celsius (1.8 Fahrenheit) compared to preindustrial times. The projected changes with 2 C (3.6 F) of warming, which the world is on pace to exceed this century, are relative to the 1991-2020 average.
Fifth National Climate Assessment

The Fed could also discourage banks and investors from investing in assets that ultimately harm the economy – for instance, by setting collateral requirements for banks that would reduce the attractiveness of holding carbon-intensive assets. The European Central Bank recently announced that it would tilt purchases of corporate bonds toward “green” assets.

The Fed has recently taken steps to push large financial institutions to monitor climate-related risks in their portfolios, drawing the ire of Republicans, who claimed the bank had no authority to consider climate change. Whether this risk management approach will pressure banks to change their lending patterns is not yet clear.

The Fed and other central banks could go further and mandate energy transition planning with an eye toward economic stability. The European Union developed a whole new sustainable finance framework designed to discourage investment in economic activities that do not support an energy transition along the lines of the European Green Deal, which aims to turn Europe into a climate-neutral continent with no one left behind. The European Central Bank is obligated to support EU economic policies, including the green transition.

The Fed has used creative tools before

Many times in its 110-year history, the Fed has provided financial support to the U.S. government during major crises, such as wars and recessions, by offering direct lines of credit or by directly purchasing Treasury bonds. During the pandemic, it took extraordinary steps to keep U.S. businesses running.

Now that the U.S. is facing rising costs from the climate crisis, we believe the Fed should treat climate change with the same urgency and importance.

In our analysis of the tools available to central banks, we took a climate justice perspective, looking beyond greenhouse gas emission reductions to incorporate social justice and economic equity. Instead of focusing on supporting corporate interests and the financial sector in the short term to stabilize markets, we believe central banks could prioritize longer-term stability by funneling investments toward vulnerable communities and people.

The Bank of England, the European Central Bank and other central banks are already implementing some pro-climate measures. At the Fed, Powell seems more concerned with political backlash than the economic damage to the U.S. economy outlined in the latest climate assessment.

We believe it is past time that the Fed consider climate destabilization as a major economic crisis and use more of the tools in the central bank toolbox to tackle it.The Conversation

About the Author:

Jennie C. Stephens, Dean’s Professor of Sustainability Science & Policy, Northeastern University and Martin Sokol, Associate Professor of Economic Geography, Trinity College Dublin

This article is republished from The Conversation under a Creative Commons license. Read the original article.

 

Energy Opinions
30 Nov

China is once again experiencing a decline in business activity. Oil traders’ attention today on the OPEC+ meeting

By JustMarkets

As of Wednesday’s stock market close, the Dow Jones Index (US30) increased by 0.04%, while the S&P 500 Index (US500) lost 0.09%. The NASDAQ Technology Index (US100) closed negative by 0.16%. Stocks came under moderate pressure yesterday amid hawkish comments from FRB President Richmond Barkin, who said the Fed should keep the possibility of interest rate hikes on the table.

The US Q3 GDP was revised upward, and the Q3 core deflator was revised downward, reinforcing speculation that the US economy continues to grow at a moderate pace with easing price pressures, which would allow the Fed to end its interest rate hike campaign.

General Motors (GM) shares rose more than 9% after the company said it would increase its dividend by 33% and implement a $10 billion share buyback program.

The US personal income and spending data will be released today, as well as the core PCE price index, which is the US Federal Reserve’s preferred measure of inflation. PCE inflation is forecast to slow, with the reading expected to fall from 3.7% to 3.5% y/y on an annualized basis. The incoming data will reinforce the view that inflation and the broader economy are cooling. Markets are likely to take this as a sign that the Fed will have to start cutting rates by the summer of 2024.

Equity markets in Europe traded flat yesterday. Germany’s DAX (DE40) rose by 1.09%, France’s CAC 40 (FR40) added 0.24% on Wednesday, Spain’s IBEX 35 (ES35) jumped by 0.59%, and the UK’s FTSE 100 (UK100) closed negative by 0.43%. Slowing price pressures in Germany and Spain pushed European government bond yields lower on Wednesday and pressured the euro. German inflation fell from 3.8% to 3.2% (3.5% expected), a 2.5-year low. Spanish inflation fell from 3.5% to 3.2% (expectation of 3.7%). Eurozone inflation data will be released today. The ECB’s preferred core consumer price index is expected to fall from 4.2% to 3.9% year-on-year.

The Eurozone Economic Confidence Index for November rose by 0.3 to a 4-month high of 93.8, exceeding expectations of 93.6. ECB Governing Council representative Stournaras warned against premature rate cuts by the ECB, pointing out that current economic data figures seem optimistic.

The OPEC+ group, which includes the Organization of the Petroleum Exporting Countries and its allies, will meet today. Disagreements among OPEC+ representatives over oil production levels have caused the group’s meeting to be postponed from Sunday (November 26) to this Thursday (November 30) and put pressure on oil prices. Saudi Arabia, which has unilaterally cut oil production by 1.0 million bpd since July, is now asking other OPEC+ members to lower oil production levels, which has prompted a backlash from some African oil producers, including Angola and Nigeria. OPEC+ delegates have said they are moving toward a compromise but have yet to reach an agreement. The talks are focused on additional production cuts, and if the parties manage to reach an agreement, it would be a green light for oil to continue to push prices higher in the coming weeks.

Asian markets were predominantly down yesterday. Japan’s Nikkei 225 (JP225) decreased by 0.26% for the day, China’s FTSE China A50 (CHA50) lost 0.62%, Hong Kong’s Hang Seng (HK50) was down by 2.08% on Wednesday, while Australia’s ASX 200 (AU200) was positive by 0.29%.

Purchasing Managers Index (PMI) data showed that manufacturing activity in China contracted more than expected in November. Non-manufacturing recorded its weakest monthly growth in 2023, while overall business activity also approached the contraction zone last seen during the height of the COVID-19 crisis. The figures have heightened fears of a slowdown in China’s economy, especially as demand in major exporting countries deteriorates. However, traders are also betting that the trend will attract broader stimulus measures from Beijing.

S&P 500 (F)(US500) 4,550.59 −4.30 (−0.09%)

Dow Jones (US30) 35,430.55 +13.57 (+0.04%)

DAX (DE40)  16,166.45 +173.78 (+1.09%)

FTSE 100 (UK100) 7,423.46 −31.78 (−0.43%)

USD Index  102.86 +0.12 (+0.11%)

News feed for 2023.11.30:
  • – Japan Retail Sales (m/m) at 01:50 (GMT+2);
  • – Japan Industrial Production (m/m) at 01:50 (GMT+2);
  • – China Manufacturing PMI (m/m) at 03:30 (GMT+2);
  • – China Non-Manufacturing PMI (m/m) at 03:30 (GMT+2);
  • – German Retail Sales (m/m) at 09:00 (GMT+2);
  • – Switzerland Retail Sales (m/m) at 09:30 (GMT+2);
  • – Switzerland KOF Leading Indicators (m/m) at 10:00 (GMT+2);
  • – German Unemployment Rate (m/m) at 10:55 (GMT+2);
  • – OPEC+ meeting at 12:00 (GMT+2);
  • – Eurozone Consumer Price Index (m/m) at 12:00 (GMT+2);
  • – US PCE Price index (m/m) at 15:30 (GMT+2);
  • – US Initial Jobless Claims (w/w) at 15:30 (GMT+2);
  • – Canada GDP (q/q) at 15:30 (GMT+2);
  • – Eurozone ECB President Lagarde Speaks (m/m) at 15:30 (GMT+2);
  • – US FOMC Member Williams Speaks at 16:05 (GMT+2);
  • – US Chicago PMI (m/m) at 16:45 (GMT+2);
  • – US Pending Home Sales (m/m) at 17:00 (GMT+2);
  • – US Natural Gas Storage (w/w) at 17:30 (GMT+2).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Economics & Fundamentals Financial News
30 Nov

Brent advances ahead of OPEC+ decision

By JustMarkets

  • Brent enters squeeze ahead of OPEC+ decision
  • Will cartel deliver or disappoint?
  • Supply cuts from OPEC+ could trigger 400-point rally
  • Brent in ascending triangle and above 21-day SMA

Oil extended gains on Thursday as market focus shifted towards the OPEC+ meeting that was postponed from last week due to internal disagreements.

Brent prices punched above $83 this morning after jumping almost 4% over the last two sessions after a severe storm in the Black Sea region sparked supply concerns. While this development has kept oil prices buoyed, the looming virtual OPEC+ meeting today is likely to influence the global commodity’s outlook.

Given the sharp selloff in oil prices since mid-September, OPEC+ could make further changes to an agreement that already limits supply into 2024. Indeed, oil has been hammered by concerns about weaker economic growth and expectations of a supply surplus in 2024. However, discord over output quotas for African oil-producing countries could act as an obstacle that leads to further delays in negotiations.

  • Oil prices may weaken if the cartel fails to reach an agreement on production quotas for 2024 or disappoint market expectations for deeper supply cuts.
  • Should OPEC+ move ahead with deeper supply cuts, this could lend oil bulls fresh support – pushing the global commodity higher as a result.

Technically speaking...

Since the November 16th low at $77.08, the black gold has rallied within an ascending triangle for over 600 points and as of the time of writing sits above its 21-day SMA at around $83.

According to Thomas Bulkowski in his book “Encyclopedia of Chart Patterns”, ascending triangles perform better with upward breakouts, with a 70% chance of meeting their breakout target, and a 17% breakeven failure rate. 

Brent bulls may take any deeper production cuts as bullish and rally to the following key resistance levels.

•            $83.66: the 261.8 Fibonacci level

•            Its 50-day SMA

•            $88: A significant price level

The Fibonacci level is drawn from the September 26 low to the September 28 high on a daily time frame.

However, if widely reported disagreements over these quotas continue, we could see brent oil prices fall to test the following support levels.

•            $81.67: the 61.8 Fibonacci level

•            $81.00: the rising trend line capturing lows from November 16th.

•            $75.47: the 423.6 Fibonacci level

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Energy Financial News
29 Nov

Global bonds rally: investors urged to review portfolios

By George Prior

As global bonds soar at the quickest pace since the 2008 financial crisis, investors need to review their investment portfolios to ensure they are on track for risk tolerance and return objectives.

This is the call-to-action warning from Nigel Green, the CEO of one of the world’s largest independent financial advisory, asset management and fintech organizations, as sovereign and corporate debt has hit 4.9% this month, the most since it surged 6.2% in December 2008, according to Bloomberg.

He comments: “This rapid jump is attributed to growing speculation that central banks, led by the US Federal Reserve, have largely concluded their interest rate hiking cycles.

“The expectation of stable or lower interest rates is prompting investors to seek the relative safety and yield offered by bonds.”

For global investors, the soaring bond market presents both challenges and opportunities.

“Those with significant allocations to fixed-income securities are reaping the benefits of capital appreciation as bond prices rise inversely to yields.

“However, the flip side is the potential for diminishing future returns as yields trend lower. Investors must carefully reassess their fixed-income portfolios to ensure they align with their risk tolerance and return objectives in this shifting environment.”

The bond market rally also has implications for equity markets and overall risk appetite.

Nigel Green says: “As interest rates stabilise or decline, the appeal of higher-yielding assets, such as dividend-paying stocks, will rise. Conversely, sectors that traditionally perform well in a rising rate environment, such as financials, could face headwinds.”

Against this backdrop, investors also face the ongoing challenge of the ‘search for yield.’

With traditional safe-haven assets offering lower returns, “there’s legitimate reason to explore riskier investments in pursuit of higher yields,” says the deVere Group CEO.

Two officials from the US central bank, who were consistently calling for higher interest rates to curb inflation last year, indicated on Tuesday that they are now happy to hold interest rates steady. This strengthens expectations that the Fed’s current hiking agenda is finished.

Many experts also believe that central banks in the UK and eurozone, and elsewhere, could also be done with hiking rates for now.

“The current surge in global bonds, reminiscent of the 2008 financial crisis, signals a significant shift in the monetary policy landscape. For investors around the world, this trend requires a careful reassessment of investment strategies across asset classes,” he concludes.

About:

deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients.  It has a network of more than 70 offices across the world, over 80,000 clients and $12bn under advisement.

Bonds Economics & Fundamentals Financial News
29 Nov

RBNZ kept interest rates at the same level. Inflationary pressures are easing in Australia

By JustMarkets

At Tuesday’s close, the Dow Jones Index (US30) increased by 0.24%, while the S&P 500 Index (US500) was up by 0.10%. The NASDAQ Technology Index (US100) closed positively by 0.29% on Tuesday. Meanwhile, the Dow Jones Industrials (US30) index rose to a 3-month-high. Stocks rose on Tuesday thanks to dovish comments from Fed spokesman Waller, which lowered the 10-year T-note yield and reinforced expectations that the Fed has stopped raising interest rates. At the same time, the likelihood of a rate cut from the US Fed starting in May-June 2024 is increasing. Fed funds futures suggest about 85 bps of cumulative interest rate cuts by December 2024.

Economic news from the US on Tuesday was mixed for the dollar. On the bearish side, the Richmond Fed’s November manufacturing survey fell from 8 to 5. In addition, the Conference Board’s US Consumer Confidence Index for November rose by 2.9 to 102.0, stronger than expectations of 101.0. Today, the US will release its GDP report for the quarter. The data is expected to be revised upward, which could temporarily support the dollar and put pressure on stock indices.

Warren Buffett confidant Charlie Munger died Tuesday at the age of 99. Munger would have turned 100 on January 1. Despite a well-developed succession plan at the conglomerate, analysts believe such a man will be impossible to replace.

Equity markets in Europe traded yesterday without any dynamics. Germany’s DAX (DE40) rose by 0.16%, France’s CAC 40 (FR40) fell by 0.21% on Tuesday, Spain’s IBEX 35 (ES35) jumped by 0.70%, and the UK’s FTSE 100 (UK100) closed negative by 0.07%.

Germany will release inflation data today. Consumer prices are expected to fall from 3.8% to 3.5% y/y. Lower inflationary pressures may have a negative impact on the euro as it will weaken the ECB’s hawkish rhetoric on inflation.

The representative of the ECB Governing Council and President of the Bundesbank Nagel said yesterday that it is premature for the ECB to discuss interest rate cuts. This complements ECB chief Lagarde’s words on Friday that the ECB has done enough, and now is the time to keep rates at current levels and analyze economic data.

Oil rose on Wednesday amid investor caution ahead of a crucial OPEC+ meeting to decide production policy in the coming months, while supply disruptions caused by a storm in the Black Sea supported prices. OPEC+ will hold an online meeting of ministers on Thursday to discuss production targets for 2024 after the meeting was postponed from November 26. According to some OPEC+ sources, the talks will be difficult, and it is possible that countries may not be able to agree on further production cuts. This would be a negative signal for oil.

Asian markets were mostly down yesterday. Japan’s Nikkei 225 (JP225) decreased by 0.12% for the day, China’s FTSE China A50 (CHA50) was down by 0.96%, Hong Kong’s Hang Seng (HK50) fell by 0.98%, and Australia’s ASX 200 (AU200) was up by 0.29%.

The Central Bank of New Zealand (RBNZ) left the money rate unchanged at 5.5% on Wednesday but noted that inflation remains too high and that further policy tightening may be needed if price pressures do not ease. The “hawkish” tone of the statement surprised many in the market, leading to a rise in the New Zealand dollar and bond yields. The new center-right government said Wednesday it will begin the legislative process to return the central bank to a single mandate for inflation targeting. The change would remove the requirement for the RBNZ to consider employment levels when setting the money rate and focus solely on inflation.

Australian inflation fell more than expected in October as commodity prices fell and core inflation also declined, confirming the central bank’s decision to leave interest rates unchanged next week. Data from the Australian Bureau of Statistics on Wednesday showed the inflation rate fell to 4.9% (5.2% expected) from 5.6% annually. However, financial markets still believe the RBA will maintain its hawkish rhetoric in December. The probability of a further rate hike to 4.60% in the first half of next year is around 50%.

Bank of Japan board spokesman Adachi said it was premature to discuss an exit from negative interest rates, suggesting it could take all next year to determine whether wages will rise enough to abandon ultra-loose monetary policy. The remarks by Adachi, who is considered one of the board’s dovish policymakers, came amid growing market expectations on Wednesday that the BoJ could take short-term interest rates out of negative territory as early as January.

Main market quotes:

S&P 500 (US500) 4,554.89 +4.46 (+0.098%)

Dow Jones (US30) 35,416.98 +83.51 (+0.24%)

DAX (DE40) 15,992.67 +26.30 (+0.16%)

FTSE 100 (UK100) 7,455.24 −5.46 (−0.073%)

USD index 102.74 −0.46 (−0.45%)

Important events for today:
  • – Australia Consumer Price Index (m/m) at 02:30 (GMT+2);
  • – RBNZ Interest Rate Decision at 03:00 (GMT+2);
  • – RBNZ Monetary Policy Statement at 03:00 (GMT+2);
  • – RBNZ Press Conference at 04:00 (GMT+2);
  • – German Consumer Price Index (m/m) at 15:00 (GMT+2);
  • – US GDP (q/q) at 15:30 (GMT+2);
  • – US Crude Oil Reserves (w/w) at 17:30 (GMT+2);
  • – US FOMC Member Mester Speaks at 20:45 (GMT+2).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Economics & Fundamentals Financial News
29 Nov

Mid-Week Technical Outlook: SPX500_m eyes 2023 high

By ForexTime 

  • SPX500_m up roughly 9% in November
  • Key US data and Powell speech may rock index
  • Prices trending higher with bulls eyeing 2023 high
  • Watch out for RSI which remains in overbought territory

The SPX500_m is on track for its biggest monthly gain since July 2022 and fourth-best month in the last 10 years!

November has been a stellar month for the stock index which is currently up roughly 9% as of writing.

Equity bulls remain empowered by growing speculation around the Fed cutting interest rates in 2024. With the upside momentum in full swing after prices blasted through a previous resistance level, the next key level of interest may be the 2023 high.

Should economic data and dovish remarks from Fed officials reinforce bets around Fed cuts next year, this could keep SPX500_m bulls in a position of power.

Taking a look at the technical picture, prices are firmly bullish on the daily charts. There have been consistently higher highs and higher lows while prices are trading above the 50, 100 and 200-day SMA.

It is a similar story on the weekly timeframe with prices approaching the 4600 resistance level. Beyond this point, the next key level of interest can be found at 4820 – a level not seen since January 2022.

One key thing that stands out in the daily timeframe is the Relative Strength Index (RSI) which remains around 70. With prices deep in overbought territory, a technical throwback could be around the corner before prices push higher.

  • Bulls remain in control above the 4525 level with the next key point of interest at 4611.

  • Should prices slip back under 4525, this may trigger a decline toward 4500 and 4470, respectively.

Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

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