Economic Indicators - The University of Michigan's US Nov 1-year inflation expectations rose unexpectedly to +4.7%, surpassing the expected +4.6% [1] - The Nov 5-10 year inflation expectations decreased to +3.6%, below the anticipated +3.8% [1] - The US Nov consumer sentiment index fell by -3.3 to a nearly 3.5-year low of 50.3, weaker than the expected 53.0 [1] Stock Market Performance - US stock indexes initially declined but recovered later, closing mixed as Senate Democrats proposed a one-year extension of health care subsidies [3] - The S&P 500 Index closed up +0.13%, the Dow Jones Industrials Index up +0.16%, while the Nasdaq 100 Index fell -0.28% [4] - Semiconductor stocks faced pressure, contributing to broader market weakness, with significant job cuts announced by US companies [2] Corporate Earnings - Q3 corporate earnings season showed strong results, with 81% of S&P 500 companies beating forecasts, indicating the best quarter since 2021 [8] - Q3 profits are projected to rise by +7.2% y/y, the smallest increase in two years, while sales growth is expected to slow to +5.9% y/y [8] International Trade - China's October exports unexpectedly fell -1.1% y/y, the largest decline in 8 months, while imports rose +1.0% y/y, weaker than expectations [5] Government and Monetary Policy - The US government shutdown, now the longest in history, is impacting market sentiment and the economy, with a 66% chance of a -25 bp rate cut at the next FOMC meeting [6] - Fed Vice Chair Philip Jefferson's comments on interest rates being "somewhat restrictive" have contributed to a cautious market outlook [2][11] Notable Company Movements - Globus Medical (GMED) shares rose over +35% after reporting Q3 net sales of $769 million, exceeding expectations [13] - Expedia Group (EXPE) closed up more than +17% after reporting Q3 adjusted EPS of $7.57, significantly above consensus [13] - Microchip Technology (MCHP) shares fell over -5% after forecasting weaker-than-expected Q3 net sales [16]

Group 1: Dollar Index and Economic Indicators - The dollar index (DXY00) fell to a 1-week low, finishing down by -0.15% due to pressure from rising US job cuts and declining consumer sentiment [1] - US job cuts in October surged by 175% year-on-year, marking the highest increase in 22 years, which supports the outlook for the Federal Reserve to continue cutting interest rates [1] - The University of Michigan's US November consumer sentiment index dropped to a nearly 3.5-year low of 50.3, falling more than expected from 53.0 [3] Group 2: Federal Reserve and Interest Rates - The ongoing US government shutdown is exerting additional pressure on the dollar, with potential negative impacts on the US economy and increased likelihood of Fed interest rate cuts [2] - Fed Vice Chair Philip Jefferson indicated that interest rates are still "somewhat restrictive" and suggested a cautious approach to further rate cuts as the Fed approaches the neutral rate [5] - Markets are pricing in a 67% chance that the FOMC will cut the fed funds target range by 25 basis points at the upcoming meeting on December 9-10 [5] Group 3: Inflation Expectations and Consumer Credit - Mixed news on inflation expectations, with the University of Michigan's 1-year inflation expectations unexpectedly rising to +4.7%, while the 5-10 year expectations eased to +3.6% [4] - US consumer credit in September increased by +$13.093 billion, surpassing expectations of +$10.230 billion [4] Group 4: Euro Performance - The euro (EUR/USD) rallied to a 1-week high, finishing up by +0.15% due to a weaker dollar and better-than-expected German trade data [6] - German September exports and imports rose more than anticipated, contributing to the euro's strength [6] - Central bank divergence is supporting the euro, as the ECB is perceived to be nearing the end of its rate-cut cycle, while the Fed is expected to implement several more rate cuts by the end of 2026 [6]

It was an interesting day of trading on Thursday, with all the major indices losing ground, led by a 1.86% decline in the Russell 2000. As I write this before Friday’s open, the futures are down, suggesting another possible day of losses to finish a week that’s seen the Nasdaq lose 2.8% in the first four days. More News from Barchart Perhaps the worst news yesterday was the jobs data released by Challenger, Gray & Christmas, which showed businesses cut 153,074 jobs in October, the highest October total ...

Market Overview - The U.S. stock market is experiencing a significant midday sell-off due to concerns over stretched valuations of AI stocks, the ongoing government shutdown, and weak labor market data [1][11] - All three major indexes are in negative territory, indicating a broad "risk-off" sentiment among investors [1] Major Index Performance - The Dow Jones Industrial Average (DJI) is down 0.8% or 398.70 points, closing at 46,912.30 [2] - The S&P 500 (SPX) has declined 1.1% to 6,720.32 and further to around 6,652 points, representing a 1.02% loss [2] - The Nasdaq Composite (IXIC) has tumbled 1.9% or 445.81 points to 23,053.99, with an additional loss of almost 1% in early trading [2] Investor Sentiment - The Cboe Volatility Index (VIX) rose 8.3% to 19.50, indicating increased investor anxiety [3] - The ratio of decliners to advancers on the NYSE is 1.97-to-1 and on the Nasdaq is 2.69-to-1, reflecting negative sentiment [3] Sector Performance - The Consumer Discretionary Select Sector SPDR (XLY) and Technology Select Sector SPDR (XLK) slipped 2.3% and 2% respectively, while the Energy Select Sector SPDR (XLE) advanced 1% [3] Global Market Impact - European markets are mirroring the U.S. downturn, with the FTSE 100, CAC 40, and DAX 40 all trading lower due to concerns over U.S. tech valuations [4] Economic Factors - The ongoing U.S. government shutdown, now in its 38th day, is creating a "data vacuum" and increasing investor uncertainty [5] - The absence of crucial economic reports is leading to reliance on private payroll and layoff data, indicating a cooling labor market [5] Corporate Earnings - Constellation Energy (CEG) is set to report earnings, which will be closely watched for insights on AI-driven power demand [6] - NuScale Power (SMR) reported earnings, with a focus on next-generation nuclear deployments [6] Upcoming Events - The IAB Connect H2 conference on December 4th will focus on digital advertising, potentially impacting media and advertising technology sectors [7] Major Stock News - $750 billion has been wiped off major AI stocks this week, with Nvidia (NVDA) falling 2.2% in early trading and down 4.3% since market open [8] - Salesforce Inc. (CRM) dropped 5.3%, while other tech companies like Microsoft (MSFT), Palantir Technologies (PLTR), Broadcom (AVGO), and Advanced Micro Devices (AMD) are also under pressure [8] International Developments - Rightmove's shares fell 12.5% after announcing increased investment in AI, while IAG saw an 11.5% slump due to soft U.S. travel demand [10]

Market Overview - European markets are expected to open mixed, with the U.K.'s FTSE 100 set to open slightly lower, while France's CAC index and Italy's FTSE MIB are seen 0.1% higher, and Germany's DAX index is little changed from the previous session [1] - European stocks closed lower on Thursday, with most sectors and major bourses ending in negative territory after a busy earnings day [1] Company Performance - Diageo's stock fell 6.5% after the company cut its full-year guidance, citing weakness in the Chinese and U.S. markets [2] - Upcoming earnings reports include companies such as Richemont, International Consolidated Airlines Group SA, Daimler Truck Holding AG, Amadeus IT Group SA, Cellnex Telecom SA, and OTP Bank NYRT [2] Economic Data - Investors are focused on upcoming data releases, including import and export data in Germany, French trade figures, and the U.K.'s House Price Index [3] - Recent central bank decisions saw the Bank of England and Norway's central bank hold rates steady, with BOE Governor Andrew Bailey indicating that rate cuts are anticipated, with economists pricing in a pre-Christmas rate cut [3][4]

Market Overview - The markets are currently pricing in a 69% chance of a -25 basis point rate cut at the upcoming FOMC meeting on December 9-10 [1] - US stock indexes experienced declines, with the S&P 500 down -1.12%, Dow Jones down -0.84%, and Nasdaq 100 down -1.91%, reaching two-week lows [4][5] Economic Indicators - US October Challenger job cuts surged by +175.3% year-on-year to 153,074, marking the largest increase in seven months and the highest for an October in 22 years [2] - Year-to-date job cuts have exceeded 1 million, the highest since the pandemic, with employers announcing the fewest hiring plans since 2011 [2] Corporate Earnings - The Q3 corporate earnings season is strong, with 81% of S&P 500 companies reporting earnings that beat expectations, indicating the best quarter since 2021 [3][7] - However, Q3 profits are expected to rise by only +7.2% year-on-year, the smallest increase in two years, and sales growth is projected to slow to +5.9% year-on-year from +6.4% in Q2 [7] Sector Performance - Weakness in semiconductor stocks negatively impacted the overall market, with notable declines in companies such as Advanced Micro Devices (AMD) down more than -7% and Nvidia (NVDA) down more than -3% [4][14] - Companies like Elf Beauty (ELF) and Duolingo (DUO) saw significant stock declines of more than -34% and -26% respectively, due to disappointing earnings forecasts [15][16] Interest Rates and Bond Market - The 10-year T-note yield fell -7 basis points to 4.09%, driven by expectations that the Fed will continue to cut interest rates following weak labor reports [3][9] - T-note prices received support from the ongoing US government shutdown, which is the longest in history and may lead to additional job losses and reduced consumer spending [10] International Markets - Overseas stock markets showed mixed results, with the Euro Stoxx 50 down -1.02% and China's Shanghai Composite up +0.97% [8]

Economic Indicators - The dollar index fell by -0.49% on Thursday, influenced by a report showing US job cuts surged by 175% year-on-year in October, marking the largest increase in 22 years [1][3] - Year-to-date job cuts have exceeded 1 million, the highest since the pandemic, with employers announcing the fewest hiring plans since 2011 [3] Federal Reserve Outlook - Hawkish comments from Chicago Fed President Austan Goolsbee and Cleveland Fed President Beth Hammack indicated a preference for no additional Fed rate cuts, supporting the dollar [2][4] - Goolsbee expressed unease about ongoing interest rate cuts due to a lack of inflation data during the government shutdown, while Hammack emphasized concerns about high inflation and the need for a mildly restrictive monetary policy [4] Currency Movements - The euro rose by +0.49% on Thursday, supported by dollar weakness and optimistic comments from ECB Vice President Guindos regarding Eurozone growth [5] - However, negative factors for the euro included an unexpected decline in Eurozone retail sales and lower-than-expected German industrial production for September [5]

Group 1: Legal and Regulatory Developments - The US Supreme Court is questioning the legality of President Trump's reciprocal tariffs, with Chief Justice Roberts emphasizing that tariff imposition is a core power of Congress [1] - Lower courts have ruled Trump's tariffs illegal, based on a questionable claim of emergency authority under the 1977 International Emergency Economic Powers Act [1] - If the Supreme Court upholds these rulings, the US government may need to refund over $80 billion in tariffs already collected [1] Group 2: Labor Market and Economic Indicators - US job cuts surged by 175.3% year-over-year in October, totaling 153,074, marking the largest increase in seven months and the highest for an October in 22 years [3] - Year-to-date job cuts have exceeded 1 million, the highest since the pandemic, with employers announcing the fewest hiring plans since 2011 [3] - The ongoing US government shutdown is affecting market sentiment and delaying government reports, which could further impact the economy [8][10] Group 3: Stock Market Performance - US stock indexes are retreating, with the S&P 500 and Nasdaq 100 reaching two-week lows due to evidence of a cooling labor market and weakness in semiconductor stocks [5][6] - The S&P 500 Index is down 0.97%, the Dow Jones is down 0.76%, and the Nasdaq 100 is down 1.61% [6] - Despite the downturn, 81% of S&P 500 companies reporting Q3 earnings have beaten expectations, indicating strong corporate performance [4][7] Group 4: Interest Rates and Bond Market - The markets are pricing in a 69% chance of a 25 basis point rate cut at the next FOMC meeting [2] - The 10-year T-note yield has decreased by 7 basis points to 4.09%, influenced by weak labor data and expectations of continued interest rate cuts [4][9] - The ongoing government shutdown is providing underlying support for T-note prices, as it may lead to additional job losses and reduced consumer spending [10] Group 5: Company-Specific Developments - Semiconductor stocks are underperforming, with AMD down over 7% and Qualcomm down over 4% [14] - Elf Beauty's stock has dropped more than 32% after forecasting 2026 adjusted EPS significantly below consensus [15] - Datadog's stock has risen over 21% after raising its full-year adjusted EPS forecast above consensus [17]

Group 1: Legal and Regulatory Developments - The US Supreme Court is questioning the legality of President Trump's reciprocal tariffs, with Chief Justice Roberts emphasizing that imposing taxes is a core power of Congress [1] - Lower courts have ruled Trump's tariffs illegal, based on a questionable claim of emergency authority under the 1977 International Emergency Economic Powers Act [1] - If the Supreme Court upholds these rulings, the US government may need to refund over $80 billion in tariffs already collected [1] Group 2: Labor Market and Economic Indicators - US job cuts surged by 175.3% year-over-year in October, totaling 153,074, marking the largest increase in seven months and the highest for an October in 22 years [3][5] - Year-to-date job cuts have exceeded 1 million, the highest since the pandemic, with employers announcing the fewest hiring plans since 2011 [3] - The ongoing US government shutdown is impacting market sentiment and delaying government reports, adversely affecting the economy [8] Group 3: Corporate Earnings and Market Performance - 81% of S&P 500 companies reporting Q3 earnings have beaten expectations, indicating a strong earnings season, although profits are expected to rise by only 7.2% year-over-year, the smallest increase in two years [4][7] - The S&P 500 Index is down 0.19%, with the Dow Jones down 0.15% and the Nasdaq down 0.45%, reflecting concerns over the labor market [6] - Strong corporate earnings are providing support for stocks despite the cooling labor market [4] Group 4: Interest Rates and Bond Market - The markets are pricing in a 69% chance of a 25 basis point rate cut at the next FOMC meeting [2] - The 10-year T-note yield has decreased by 5 basis points to 4.11%, influenced by weak labor reports and expectations of continued Fed rate cuts [4][9] - European government bond yields are also declining, with the 10-year German bund yield down 0.7 basis points to 2.666% [10]

Core Viewpoint - Gold has experienced a significant increase of 45.2% since November 5, 2024, marking a record for the year following a presidential election, with expectations for continued gains based on historical trends [3][6]. Group 1: Gold Price Performance - Gold's price surge of 45.2% since November 5, 2024, surpasses previous records set during the Obama and Carter administrations, which saw gains of 43.6% and 31.8% respectively [3][6]. - The price of gold attempted to break the $4,000 level, settling at $3,992.90, with 49 new records established in the past 10 months [7]. Group 2: Factors Driving Gold Prices - Anticipation of swift interest rate cuts by the Federal Reserve in 2025 has contributed to the rally in gold prices, enhancing its appeal compared to other safe-haven assets [4][6]. - Increased demand for gold from global central banks and private investors, particularly in China and Japan, has positively influenced gold prices [4][6]. Group 3: Political Influence - President Trump's criticism of the Federal Reserve and calls for lower interest rates have driven investors towards gold as a safe haven, amid geopolitical uncertainties [5][6]. Group 4: Future Projections - Despite the current surge in gold prices, Capital Economics forecasts a decline to $3,500 per ounce by the end of 2026, suggesting that the current market may be experiencing a bubble [6].