Company News and Stock Highlights - Netflix (NFLX) shares fell 2.1% after announcing a deal to acquire Warner Bros. Discovery (WBD) valued at approximately $82.7 billion, with Netflix paying $72 billion in cash and stock for various assets [6] - Ulta Beauty (ULTA) stock jumped 11% after reporting $2.86 billion in sales and $5.14 in earnings per share for the third quarter, both exceeding analyst expectations, and raised its full-year revenue forecast [6] - Hewlett Packard Enterprise (HPE) shares tumbled 3.9% after reporting weaker revenue than expected, despite profit exceeding forecasts, and provided below-consensus revenue and EPS forecasts for Q1 fiscal 2026 [9] - Victoria's Secret & Co. (VSCO) stock surged nearly 14.4% after reporting a smaller-than-expected loss and raising its full-year sales forecast [9] - Salesforce (CRM) shares increased by 4% after delivering better-than-expected profit, although revenue fell short, with CEO highlighting the company's position in the AI era [9] - Dollar General (DG) rallied 12.6% after reporting stronger-than-expected profit for its latest quarter [9] - Hormel Foods (HRL) rose 3.3% after also reporting better-than-expected profit [9] Market Performance - Major U.S. stock indexes are trading higher, with the S&P 500 index up around 0.3% and just 0.2% shy of its record high, marking its eighth gain in the past nine sessions [2] - The Nasdaq Composite (COMP) rose approximately 0.4%, while the Dow Jones Industrial Average (DJI) saw a modest increase of about 0.1% [2] - The Russell 2000 index (RUT) of small-cap stocks edged back 0.2% from its record set yesterday [2] Sector Performance - The Industrials Select Sector SPDR (XLI), Technology Select Sector SPDR (XLK), and Communication Services Select Sector SPDR (XLC) recorded gains of 0.5%, 0.4%, and 0.4% respectively [3] - The Health Care Select Sector SPDR (XLV) experienced a slight decline of 0.7% [3] - The CBOE Volatility Index (VIX) decreased by 1.9% to 15.78, indicating reduced market anxiety [3] Upcoming Market Events - The U.S. Personal Consumption Expenditures (PCE) price index for September is expected to show a 2.8% increase over the past 12 months, with core inflation at 2.9% [4] - The Federal Open Market Committee (FOMC) meeting on December 9-10 is anticipated to result in a 25 basis point rate cut, with an 89.2% chance assigned to this outcome [5] - Other important economic data releases next week include ADP employment change, Job Openings and Labor Turnover Survey (JOLTS), Producer Price Index (PPI), and initial jobless claims [5]

Economic Overview - The Reserve Bank of India's (RBI) recent repo rate cut of 25 basis points to 5.25% signals a strong easing approach despite headline GDP growth exceeding 8% [1][19] - The RBI's actions, including a liquidity injection of Rs 1 lakh crore through open market bond purchases and a $5 billion dollar–rupee swap, indicate a need for economic support [1][19] Inflation and GDP Analysis - The Indian economy is experiencing rapid disinflation, with inflation at an unprecedented low, while real GDP growth is accelerating, creating a favorable economic environment [1][19] - Despite a reported Q3 growth of 8.2% year-on-year, the underlying strength appears uneven, with sequential growth stable at 1.8% quarter-on-quarter [6][19] - Nominal GDP growth has cooled to 8.7%, influenced by a GDP deflator that has dropped to 0.5%, suggesting that real growth may be overstated [7][19] External Economic Pressures - The rupee has declined nearly 5% this year, becoming the worst-performing currency in Asia, driven by a record merchandise trade deficit and weak exports due to tariffs [9][10] - Foreign portfolio investors (FPIs) have withdrawn over Rs 1.5 lakh crore this year, indicating a lack of confidence in the market amid stalled trade negotiations [13][19] Market Sentiment and Future Outlook - Analysts express concern over the underlying health of the economy, questioning the necessity of such significant easing measures when headline growth appears robust [5][19] - Despite the current market challenges, major financial institutions like Morgan Stanley and Goldman Sachs predict a rebound in India's markets next year as earnings stabilize and policy support is expected to take effect [17][19]

Renminbi Exchange Rate and Policy Recommendations - The renminbi is at its weakest since 2012 in real effective terms, having depreciated about 16% over the past ten years [2] - The US dollar is at its strongest in almost 40 years in real effective terms, although it has weakened from an index of 110 at the beginning of the year to about 100 [2] - Exchange rates should be determined by market forces, considering fundamentals, interest rates, and capital flows [7] - Policymakers should consider a combination of monetary and fiscal easing to achieve both a stronger renminbi and escape the low inflation zone [14] - A modest appreciation of the renminbi is unlikely to hurt Chinese companies' competitiveness [16] Renminbi Internationalization - The renminbi is already a reserve currency as it joined the SDR basket ten years ago, but its share is still low at 2% to 3% [18] - The shift from high to low interest rates in China makes it cheaper to borrow in renminbi, favoring internationalization [20] - Further opening up access to Chinese markets for foreigners and vice versa is needed [21][22] - More Chinese bonds should be issued both domestically and offshore to supply safe assets [23] Consumption and Investment Strategies - Boosting labor income requires a strong job market, while transfer income has slowed due to local government difficulties [24][25] - The marginal propensity to consume in China has decreased from $0.68 to $0.66 per dollar earned, indicating cautiousness [26] - Both Hong Kong and mainland markets are good strategies for equity allocation, considering the global monetary reset [31][32]

Market Overview - U.S. stocks experienced a decline, with the Dow Jones Industrial Average falling by 295.65 points (0.62%) to 47,420.77, the S&P 500 losing 23.22 points (0.34%) to 6,825.87, and the Nasdaq Composite decreasing by 68.69 points (0.29%) to 23,297.00 [1][8] Federal Reserve and Monetary Policy - Expectations for further monetary easing have increased due to dovish signals from key voting members and speculation regarding White House economic adviser Kevin Hassett as a potential successor to Fed Chair Jerome Powell [2][8] - Powell is scheduled to speak after the market close, but it is anticipated that he will not address monetary policy due to the upcoming central bank meeting [5][8] - The market is pricing in an 87.4% chance of a 25 basis-point rate cut at the Fed's policy meeting on December 10 [8] Economic Indicators - Investors are awaiting a delayed September report on the Personal Consumption Expenditures Price Index, which is the Fed's preferred inflation gauge [6][8] - The Institute for Supply Management's survey indicated that U.S. manufacturing contracted for the ninth consecutive month, impacted by tariffs and higher prices [8] Sector Performance - The rise in U.S. Treasury yields negatively affected S&P 500 sectors such as real estate and utilities, which are often viewed as bond proxies [7][8] - Declining issues outnumbered advancers on both the NYSE and Nasdaq, with a ratio of 1.45-to-1 and 1.91-to-1, respectively [7][9] - The S&P 500 recorded 17 new 52-week highs and one new low, while the Nasdaq Composite saw 73 new highs and 63 new lows [7][9] Cryptocurrency Market - The cryptocurrency market has faced significant losses, with Bitcoin dropping about 7% and falling below $85,000, contributing to a total market loss of over $1 trillion since its peak [8] - Major crypto stocks, including Coinbase and Bitfarms, experienced declines of 5.1% and 6.9%, respectively [8] Retail Sector - Cyber Monday sales are projected to reach $14.2 billion, with big-box retailers like Walmart and Target seeing their shares increase by 1% and 0.5%, respectively [9]

Inflation & Monetary Policy - South Korea's consumer inflation remained stable in November [1] - This gives the central bank more reason to maintain a cautious approach to monetary easing [1] Financial Imbalances & Property Market - Authorities are concerned that a persistent property market rally could trigger financial imbalances [1]

Core Viewpoint - Copper prices have surged to a record high due to supply shortfalls, bullish predictions, and trading disruptions on the CME's Comex Exchange [1][2]. Group 1: Market Dynamics - Futures on the London Metal Exchange increased by as much as 2.5% to reach $11,210.50 per ton [1]. - A chaotic halt in trading on the CME's Comex Exchange contributed to the price surge, with trading operations resuming early in the US morning [2]. - Discussions among miners, smelters, and traders in Shanghai highlighted a tightening market, further supporting the price increase [2]. Group 2: Expert Predictions - Kostas Bintas from Mercuria Energy Group Ltd. expressed a bullish outlook, warning that increased shipments to the US could deplete global inventories of copper [3]. - Bintas emphasized the urgency of the situation, stating that continued demand could lead to a significant shortage of copper cathodes worldwide [3]. Group 3: Influencing Factors - Analysts noted that the surge in copper prices is a response to bullish headlines from the CESCO conference in Shanghai, particularly regarding US demand creating tightness in the global market [4]. - Factors such as potential tariffs, an improving macroeconomic outlook, and supply disruptions are contributing to a "perfect storm" for copper prices [4]. - Rising expectations of monetary easing by the US Federal Reserve are also seen as a factor that could boost growth and demand for copper in the US [5].

Economic Growth Forecast - The Bank of Mexico has cut its growth forecast for the economy to 0.3% for this year, down from a previous estimate of 0.6% [1][2] - The central bank maintained its growth forecast at 1.1% for 2026 and projected 2.0% for 2027 [1] Inflation Projections - The Bank of Mexico raised its short-term inflation forecasts, with annual headline inflation recorded at 3.61% in early November and core inflation at 4.32% [4][5] - The bank expects inflation to reach its 3% target by the second half of next year, but has slightly increased its forecasts for average annual core inflation for late 2025 and early 2026 [5] Monetary Policy and Rate Cuts - The central bank has cut its benchmark interest rate by four percentage points since early last year, with the latest cut bringing the rate to 7.25%, the lowest since May 2022 [3] - The majority of board members justified the rate cuts by citing falling headline inflation and ongoing economic weakness [4] Internal Debate and Credibility Concerns - There is an internal debate within the Bank of Mexico regarding the effectiveness of its monetary easing, highlighted by Deputy Governor Jonathan Heath's concerns about the credibility of the bank's inflation forecasts [3][6] - Heath has expressed skepticism about achieving the 3% inflation target by the third quarter of 2026, given the elevated short-term forecasts [6] Analyst Expectations - Analysts polled by Citi project higher inflation rates for the end of 2026, with headline inflation at 3.91% and core inflation at 3.83% [7]

The cash session had closed with the These closing levels gave futures traders a higher base from which to calibrate positions, contributing to modest profit‑taking and hedging in the overnight session rather than aggressive new buying. closed down roughly 2.5%–3% on the day, making it one of the notable decliners in the large‑cap tech space as traders rotated out of AI chip names after recent strength. moved the other way, with its stock rising by around 2% into a fresh record high after its latest earni ...

Core Insights - Falling interest rates are reshaping the outlook for major U.S. lenders, with Bank of America (BAC) and Wells Fargo (WFC) being closely monitored for potential benefits from monetary easing [1][11] Bank of America (BAC) - BAC is focusing on organic domestic growth through the expansion of its physical and digital presence, with a medium-term plan emphasizing sustainable growth, digital scale, cost discipline, and capital efficiency [3][5] - The bank aims for over 12% earnings growth and a return on tangible common equity (ROTCE) between 16% and 18% over the next three to five years, while maintaining a Common Equity Tier 1 ratio of 10.5% [4] - With the Federal Reserve initiating a rate cut cycle, BAC is expected to benefit from fixed-rate asset repricing, higher loan and deposit balances, and a gradual decline in funding costs, projecting net interest income (NII) growth of 5-7% in 2026 [5][11] - BAC plans to expand its financial center network by opening more than 150 centers by 2027, which, along with digital tool adoption, will support NII growth and cross-sell opportunities [6] - The investment banking (IB) business is positioned for growth as deal-making activities resume, targeting mid-single-digit CAGR in IB fees over the medium term [7] Wells Fargo (WFC) - WFC is expanding across multiple business lines following the lifting of its asset cap, focusing on deposit growth, targeted loan expansion, and product investment as funding costs decrease [8][10] - The bank aims to benefit from a softer rate environment, which is expected to increase lending activity, stabilize net interest margins (NIM), and enhance market share in fee-generating businesses [9][12] - WFC's strategy includes prioritizing organic growth, competing for deposits, and selectively increasing lending while remaining cautious during economic uncertainty, which is expected to improve profitability and margin resilience [13] - Management anticipates stable NII in 2025, leveraging an expanded balance sheet to grow fee-rich franchises [12] Performance and Valuation Comparison - Year-to-date, shares of BAC and WFC have increased by 18.2% and 20.4%, respectively [14] - BAC is trading at a 12-month forward price-to-earnings (P/E) of 12.11X, while WFC is at 12.31X, both below the industry average of 13.93X [15][16] - BAC's dividend yield is 2.16%, slightly higher than WFC's 2.13%, both exceeding the S&P 500 average of 1.52% [16] - BAC's return on equity (ROE) is 10.76%, lower than WFC's 12.51%, indicating WFC's more efficient use of shareholder funds [19] Growth Estimates - The Zacks Consensus Estimate for BAC's revenue growth is projected at 7.2% for 2025 and 5.7% for 2026, with earnings expected to rise by 15.6% and 14.5% for the same years [21] - In contrast, WFC's revenue growth estimates are 2.1% for 2025 and 5.4% for 2026, with earnings growth projected at 17% and 10.8% [22] Investment Outlook - While both banks benefit from falling rates, BAC's scale-driven efficiency, branch expansion, and digital growth strategy position it favorably to capture increased lending activity [25] - BAC's clearer earnings trajectory and stronger NII growth prospects make it a more compelling investment choice compared to WFC [26]

Economic Overview - The U.S. labor market added 119,000 jobs in September, significantly exceeding the forecast of 50,000, while the unemployment rate rose to 4.4%, the highest since October 2021 [3][4] - Institutional investors have shown caution, with a notable outflow of $766 million from U.S. equities last week, marking the second-highest weekly outflow since the 2008 financial crisis [4] Cryptocurrency Market - The cryptocurrency market is facing significant volatility, with Bitcoin (BTC) on track for its worst month since June 2022, dropping below $84,000 and reaching a low of $81,000 [6] - The market sentiment is characterized by "extreme fear," leading to over $1 trillion in value being wiped from the crypto market recently [6] Asian Markets - Hong Kong stocks rebounded after a three-day decline, driven by anticipation of Alibaba's upcoming earnings report, with Alibaba's stock surging over 9% in a single day [7] - China's financial policy is evolving, with state-owned banks cutting deposit interest rates, pushing the one-year rate below 1% for the first time to 0.95% [8] Corporate Developments - BHP has withdrawn its $49 billion takeover bid for Anglo American due to unresolved regulatory concerns, despite the strategic appeal of Anglo American's copper assets [9][10] - Lenovo is stockpiling components to mitigate a potential supply crunch driven by AI demand, reporting a 5% year-on-year revenue increase to $20.5 billion in its second quarter [11] Geopolitical Developments - Former President Trump is advocating for a peace plan regarding Ukraine, which includes difficult concessions for the country, although U.S. officials indicate that the plan is negotiable [12]