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The major economic releases and events: November 22 to November 26

  
  Analysis

US GDP, RBN zero rate decision

Next week in the US will have the Thanksgiving day holiday on Thursday, November 25 which extends into Friday, November 26, and will have traders leaving early on Wednesday, November 24. As a result, releases are limited and expectations are the same.

Of note is that the Pres. Biden has said that he will announce his decision for the Fed chairmanship before Thanksgiving. A time and date is yet to be determined.

Below are the key releases and events that should shape the market price action.
Tuesday November 23rd:
On Tuesday, flash manufacturing/service PMI data will be released out of Europe including out of France, Germany, EU. France bought get things started with the release at 3:15 AM ET/0815 GMT. Germany will follow at 3:30 AM ET/0830 GMT. EU at 4 AM ET and UK at 4:30 AM ET/0930 GMT will finish the European releases.
In the US, the flash manufacturing PMI will be released at 9:45 AM with expectations of 59.0 versus 58.4 last month. The services PMI is expected to come in at 59.1 versus 50.7
Wednesday, November 24

(more…)

NASDAQ index closes the week at a record. Trades to a record intraday high as well

  
Analysis, US Market

Dow and S&P close lower

The US major stock indices are closing with mixed results.
Some highlights for the major indices:
  • The NASDAQ index closed at a record level. The index rose 63.74 points or 0.4% to 16,057.45. The index reached an intraday new all time high at 16,121.12. The low extended to 16017.23.  The NASDAQ index closed above 16,000 for the first time ever
  • The S&P index stretch to just 1 point short of reaching a new all-time intraday high at 4718.50. The high price today reached 4717.75. The price rotated lower after the failed attempt. The index is closing at 4697.95. That is down -6.6 points or -0.14%. The S&P closed at a record level on Thursday, but not today
  • The Dow industrial average was down for most of the trading day. The index fell -268.97 points or -0.75% to 35601.99.  The large declines to the index down -315.58 points or -0.8%. The high price for the index up a small 8.14 points or 0.02%
Losers today included
  • Energy
  • Financials, and
  • Healthcare

The winners included

  • Technology,
  • Consumer discretionary, and
  • Utilities

European major indices close the day lower

  
Analysis, Global Indices

Changes for the week are mixed

The major European indices are closing the day lower led by declines in the Spain’s Ibex and Italy’s FTSE MIB. The move to the downside were triggered by fears of the Covid resurgence. Austria announced that they would lockdown starting Monday and require vaccinations. Other levels of resurgence in Covid cases are happening on the continent,, boosting fears of an economic slowdown.

The provisional closes are showing:

  • German DAX, -0.3%
  • France’s CAC, -0.36%
  • UK’s FTSE 100 -0.4%
  • Spain’s Ibex, -1.6%
  • Ital in Covid cases ‘s FTSE MIB -1.1%
For the trading week, the indices France’s CAC and German Dax moved higher while the other indices move to the downside.  Both the CAC and the DAX reach new all-time highs this week before backing off.
  • German DAX +0.49%
  • France’s CAC, +0.35%
  • UK’s FTSE 100, -1.65%
  • Spain’s Ibex, -3.5%
  • Italy’s FTSE MIB, -1.4%
in other markets as London/European traders look to exit:
  • Spot gold is trading down $1.30 or -0.07% at $1857.26
  • Spot silver is trading up nine cents or 0.36% at $24.86
  • WTI crude oil futures are trading down $-3.44 or -4.36% at $75.41
  • Bitcoin is trading higher by about $1000 of $58,032
In the US stock market, the S&P and NASDAQ are on track for record closes. The Dow industrial average is a lower:
  • Dow industrial average -166 points or -0.47% at 35702.26
  • S&P index +5.32 points or 0.11% at 4709.98. The all-time high price for the S&P index is at 4718.50. It’s high price today has so far reached 4710.88
  • NASDAQ index +117.77 points or 0.74% 1611.79. The NASDAQ index traded to an all-time high price today
In the US debt market as London traders look to exit, yields are lower with a flatter yield curve. The two – 10 year spread as moved into 105.7 basis points from 108.5 basis points near the close yesterday.
Changes for the week are mixed_In the European debt market, the 10 year yields are lower with the UK yields down the most at -4.8 point basis points.
European benchmark 10 year yields

China premier Li Keqiang: China economy is facing new downward pressure

  
Analysis, Economy

Remarks by China premier, Li Keqiang

  • Domestic and foreign situation still complex and severe
  • Will take measures to reduce pressure of high commodity prices
  • Will keep yuan exchange rate basically stable
He has been repeating the above comments for quite a while now, so there isn’t much of a big change to policy stance by local authorities in that respect.
They are recognising that the economy is facing challenges but they maintain that supportive measures will be undertaken if and when necessary.

Reuters poll shows the Federal Reserve is expected to raise rates by 25 bps in Q4 2022

  
  Analysis

Reuters most recent poll of analysts on views on the US economy and the Federal Open Market Committee.

 

  • US GDP to grow 3.9% in 2022 and 2.6% in 2023 (vs 4.0% and 2.5% in the October poll)
  • US Core PCE price index to average 3.0% in 2022 and 2.3% in 2023 (vs 2.7% and 2.3% in October poll)
  • The Federal Reserve to raise rates by 25 basis points to 0.25-0.50% in Q4 2022 (vs Q1 2023 in October poll)

 

The moving forward of expectations of a hike is a catch up somewhat with market pricing already. This comment ( Bank of America Securities) from the Reuters report puts the ‘why’ in a nutshell:

  • “The double-whammy of a cost and wage push into prices is likely leaving the Fed uncomfortable. The risks of earlier hikes – next summer, if not before – are on the rise
  • To the extent that inflation expectations march higher over the longer run and consumers continue to react negatively to higher prices on the view that they will prove persistent, the more likely the Fed will damper the inflationary pressure with tighter monetary policy.”
Reuters most recent poll of analysts on views on the US economy and the Federal Open Market Committee. 

S&P and NASDAQ close at a record level

  
Analysis, US Market

Dow closes lower.

Both the S&P and NASDAQ indices closed at record levels today.
  • The S&P index closed above its previous high of 4701.69 reached on November 8
  • the NASDAQ index closed above its previous record high at 15982.36 reached on November 8
  • The Dow industrial average closed lower on the day
The final numbers are showing:
  • Dow industrial average felt -60.10 points or -0.17% at 35870.94
  • S&P index rose 15.87 points or 0.34% at 4704.55
  • NASDAQ index rose 72.15 points or 0.45% at 15993.72
Looking at the S&P sectors,
  • consumer discretionary’s rose by 1.2%
  • technology rose by 1.0%
the losers today included:
  • communications -0.7%
  • an energy -0.6%
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