The yield on the benchmark 10-year Treasury note edged lower to 4.115% early on Monday. U.S. stock futures were set to start the week in the red, putting the so-called Santa Claus rally at risk. Silver prices were volatile, hitting new highs before giving back some gains. Dow Jones Industrial Average futures were down 27 points, or 0.1%. S&P 500 futures were falling 0.2% and Nasdaq 100 futures were losing 0.4%. The S&P 500 is up 0.2% since the Santa Claus rally period — which includes the final five trading ...

Market Overview - The crypto market experienced significant volatility, with bitcoin (BTC) rising from $85,200 to $88,000 following the Bank of Japan's interest rate hike, marking the highest level in 30 years [1] - This week, bitcoin has jumped over 2% on four occasions, although these rallies have been temporary, reflecting the choppy behavior typical of previous crypto bear markets [1] Derivatives Positioning - Bitcoin open interest increased faster than its price, indicating that the price movement was supported by leveraged long positions rather than short position cover [5] - The aggregate funding rate for bitcoin across exchanges rose to 0.085%, the highest since November 21, suggesting a bullish environment as long position holders pay interest to short sellers [5] - The altcoin market did not reflect bitcoin's bullish signals, with SOL and XRP open interest declining by 4.4% and 2.6%, respectively, indicating futures traders are exiting speculative assets [5] Altcoin Market Dynamics - Bitcoin's long/short ratio shows a bullish skew, with 66% of traders going long in the past four hours [5] - Despite the overall altcoin market suffering, ether (ETH) outperformed bitcoin, rising by 1.5% against BTC, although it had been in a downtrend earlier in the week [5] - The altcoin market requires bitcoin to break above resistance levels and consolidate to encourage capital flow into more speculative assets [5] - The lack of speculation is evident as CoinDesk's memecoin index (CDMEME) increased by 2.42%, while the CoinDesk 20 (CD20) rose by 3.68% [5]

Market Overview - US stock futures advanced as investors moved past a challenging week, anticipating key economic data to shape interest rate expectations for 2026 [1] - Contracts on the S&P 500 and Nasdaq 100 gained 0.4%, while Dow Jones Industrial Average contracts also rose by 0.4% [1] Sector Rotation - Concerns over inflated AI expectations have led investors to shift from tech stocks to value stocks, impacting the Nasdaq Composite and S&P 500, while the Dow remained relatively insulated due to fewer tech components [2] - Many strategists view this sector rotation positively, indicating a broadening support for stocks beyond just tech leadership [2] Economic Data and Federal Reserve Outlook - The final full week of trading for the year is marked by optimism for stocks, with expectations of monetary and fiscal stimulus from the reshaped Federal Reserve under President Trump's influence [3] - Key economic data releases this week include the November jobs report, an inflation reading, and an update on October retail sales, all critical for assessing the Fed's future rate decisions [4] Federal Reserve Leadership Changes - The future direction of the Federal Reserve is under scrutiny as Chair Jerome Powell's term ends in May, with Kevin Hassett and Kevin Warsh as potential successors [5] - Hassett indicated he would consider Trump's policy views if appointed, but emphasized that the Fed's rate decisions would remain independent [5]

Market Overview - US stock futures advanced as investors moved past a challenging week, anticipating key economic data to shape interest rate expectations for 2026 [1] - Contracts on the S&P 500 and Nasdaq 100 rose by 0.4%, while the Dow Jones Industrial Average also saw a 0.4% increase [1] Sector Rotation - Concerns over inflated AI expectations have led investors to shift from tech stocks to value stocks, impacting the Nasdaq Composite and S&P 500, while the Dow remained relatively insulated due to fewer tech components [2] - Many strategists view this sector rotation positively, indicating a broader support for stocks beyond just tech leadership [2] Economic Data and Federal Reserve Outlook - The upcoming week is critical for assessing the potential for further Federal Reserve easing, with significant economic reports delayed due to a government shutdown [4] - Key reports include the November jobs report, an inflation reading for November, and an update on October retail sales, all of which are closely monitored by investors [4] Federal Reserve Leadership Changes - The future direction of the Federal Reserve may be influenced by the end of Chair Jerome Powell's term in May, with potential candidates like Kevin Hassett and Kevin Warsh being considered for the position [5] - Hassett has indicated he would consider Trump's policy views if appointed, but emphasized that the Fed's rate decisions would remain independent [5]

Core Insights - The Chicago Mercantile Exchange (CME) experienced a significant outage that halted trading of futures and options, impacting multiple markets and contracts worth trillions of dollars [1][2] - The outage lasted for over nine hours, with services gradually resuming after the initial alert [1] - The incident highlights the critical role CME plays in global markets, as traders sought alternatives during the disruption [3] Trading Impact - The outage disrupted trading in S&P 500 futures, EBS foreign exchange platform, Treasuries, and US crude oil [2] - Traders reported difficulties in pricing equity index options and expressed concerns over liquidity when seeking alternatives to CME [3] Market Statistics - In October, CME averaged over 26 million derivatives contracts traded daily [3] - On November 20, open interest in CME's US Treasury futures and options reached an all-time high of 35.1 million contracts, with approximately $1 trillion of notional value traded daily in E-mini S&P 500 and Nasdaq 100 futures [4] Historical Context - Exchange outages have become more frequent, with technology issues affecting pricing across global platforms [5] - Previous incidents include a June 2024 glitch at the New York Stock Exchange that erroneously halted trading on about 40 stocks and a disruption in Nasdaq premarket trading earlier that year [5] - The London Stock Exchange Group also faced multiple outages at the end of 2023 [6]

Core Insights - A data-center fault at the Chicago Mercantile Exchange (CME) led to a halt in trading of futures and options, causing significant disruption across various markets [1][2] - The malfunction was attributed to cooling system issues at a data center operated by CyrusOne, with no clear timeline for the resumption of normal operations provided [1][2] Market Impact - The outage has already exceeded a similar technical error from 2019, highlighting the extensive influence of CME Group Inc. and its Globex electronic trading platform [2] - The disruption has raised concerns among market participants about the potential loss of a trading session, affecting millions of contracts linked to major indices like the S&P 500, Dow Jones Industrial Average, and Nasdaq 100 [2] Trading Challenges - The halt in trading particularly complicates the operations of equity-derivatives desks, as options on the S&P 500 with a notional value of approximately $600 billion were set to expire on the same day [6] - Traders are facing difficulties in rolling positions from one monthly contract to another, leading to frustration among those holding positions during the outage [4] Commodity Market Effects - Gold experienced erratic price movements, with bid-ask spreads significantly wider than usual, while US crude oil and palm oil markets were also impacted [5] - The timing of the disruption coincided with the expiry of gasoline and diesel futures, which could complicate settlement processes [5]

Group 1 - Tech-focused Nasdaq 100 futures increased by +0.3% in after-hours trading, driven by a rise in Alphabet shares following its earnings report [2] - Declines were observed in shares of Microsoft and Meta Platforms, impacting overall market sentiment [2] - Benchmark S&P 500 futures remained relatively unchanged during the same trading period [2]