Dow +1,06%, S&P 500 +0,30%, Nasdaq +0,27%, Russell +1,47%, SOX +0,65%, Eurostoxx +0,23%, SMI -0,32%.
Wall Street is redistributing the cards within the different sectors, traders continue to favor the green button to the detriment of the red, a rotation is underway and that’s good, tech is taking a well-deserved break. Small capitalizations are sought after, as are certain cyclicals, the Dow Jones takes the opportunity to post a new historic record at the bell, the tech giants are still performing quite well, apart from Nvidia which is down 4.18%. The S&P500 index (SPX) ends its day close to its all-time high, the appointment of Scott Bessent as Secretary of the Treasury of the United States acts as a powerful calming agent on the psyche of the speakers, finally a guy more or less normal in this team, we say in the trading rooms. The yield on the 10-year US bond takes note of this and falls to 4.30%, the 2/10-year US curve inverts briefly during the session, usually this indicates that the market is expecting to a recession. In the present case, we can think that this brief inversion is rather due to growing uncertainties regarding the next Fed meetings. Until recently, cuts of 25 basis points were still forecast in December and early 2025. Now the market is divided, the Fed Funds give a 56% chance of such a cut on December 18, 21% for January 29 and 53% on March 19, which means that there is no longer any consensus in the market on this subject and this could have significant repercussions, particularly on currencies.
Equity volatility is falling further, the VIX loses 4.2% to 14.6, it has broken its 200-day moving average and can easily target 10.62 from a technical point of view. The dollar and the euro stabilize, the pair moves to 1.0475, it looks at 1.0488 then 1.0497 – 1.0500 on the resistance side. Support level Friday’s low at 1.0335 is worth watching. Gold catches its breath, the ounce falls to 2615 dollars, it sees its main support at 2565 dollars, this is where its 100-day moving average passes. Oil is falling back below $70 per barrel for WTI Light Crude, rumors of a ceasefire in the Middle East are penalizing it.
We take a look at the intensive care floor, where old Europe is dying. Last night the poor thing felt the wind from the cannonball, which really passed very close. Donald Dark Trump, the new president of the galaxy (but what are the guardians doing?), announces that he will increase customs duties on Mexican and Canadian products to 25% and that he will increase those on Chinese products, already well taxed for their part. Nothing for Europe therefore, which breathes. But our guard must not be lowered, this is a file to follow.
China announces that “no one will win a trade war or a tariff war”. The EU is proposing sanctions on several Chinese companies it says helped Russian companies develop attack drones deployed against Ukraine and is considering imposing new restrictions on Russian oil tankers.
Austan Goolsbee argues in favor of continuing the Fed’s rate cuts unless there are signs the economy is overheating. The Justice Department ends its criminal prosecution of Trump. Prosecutors will continue to challenge the classified documents case against Trump’s two co-defendants. Justice Department policy prohibits prosecutions of sitting presidents.
Good to know: Since 1950, from the Tuesday before Thanksgiving to the second trading day of the new year, the S&P 500 has moved up 80% of the time, with an average gain of 2.6%. Small caps are doing even better, with the Russell 2000 recording an average jump of 3.3% since its creation in 1979.
On today’s macroeconomic menu, big series in the United States with the FFHA real estate price index (3:00 p.m.), followed at 4:00 p.m. by the Conference Board confidence index, the Richmond Fed manufacturing index and sales in new real estate (4:00 p.m.).
Generali is reportedly negotiating a merger with Natixis AM (BPCE), according to the FT. ThyssenKrupp will cut 11,000 jobs and reduce steel production by 2030. Avolta has secured a 10-year contract to expand its retail presence at Manaus airport in Brazil. Qualcomm’s interest in buying Intel is reportedly cooling, according to Bloomberg. Walmart abandons its diversity and inclusion program. Macy’s delays earnings after discovering employee embezzled $154 million. F1 validates General Motors’ arrival as 11th team in 2026. Australia has introduced a bill to ban children under 16 from using social media, prompting tech companies like Meta to request a postponement. Meta facing trial in April in FTC case to undo Instagram merger. Rivian secures $6.6 billion conditional loan to build EV factory in Georgia. Ransomware attack disrupts scheduling and payroll payments at Starbucks. Google will build an underwater cable linking Darwin (Australia) to Christmas Island. Sony is reportedly developing a new portable console for PS5 games.
This night and this morning in Asia, the indices are trading lower. Tokyo fell 0.87% at the bell, Hong Kong lost 0.13%, Shanghai 0.12%, Seoul lost 0.55% and the Nifty50 fell 0.22%. The future SPX trades around balance and Europe opens down 0.6%. The trading week practically ends tomorrow evening. Thursday will be Thanksgiving, Wall Street will remain closed for the occasion and will deal with half a session on Friday.
