MARKET WRAPS
Watch For:
ECB President Christine Lagarde appears at Committee on Economic and Monetary Affairs; U.K. Capital issuance statistics, CBI Distributive Trades Survey; trading updates from Siemens Healthineers, Rightmove
Opening Call:
Stock futures were lower. Asian stock benchmarks declined; Treasury yields rose; the dollar weakened; while oil futures fell and gold advanced.
Equities:
Stock futures were lower at the start of the week.
U.S. stocks closed broadly higher Friday in an abbreviated session due to the Thanksgiving holiday.
Optimism has lately built that the Fed won't raise rates further, and will even start to lower them in 2024.
"The story of the year has been interest rates, and right now the Fed is giving investors a green light," said Ken Mahoney, CEO of Mahoney Asset Management.
He expects stock prices to keep rising through the end of 2023.
"Investors are definitely expecting rate cuts next year," said Julie Biel, chief market strategist and portfolio manager at Kayne Anderson Rudnick.
Forex:
The dollar weakened early Monday.
UniCredit Research expects "moderate dollar weakness" over the next two years as the U.S.'s growth outperformance diminishes and interest-rate cuts cause rate differentials between the U.S. and other G-10 countries to narrow, Elia Lattuga, deputy head of strategy research, said.
However, subpar global growth and rate cuts outside of the U.S. should limit the dollar's falls.
USD maintains a significant carry premium against all other G-10 currencies and against most Asian currencies, RBC Capital Markets said.
This should keep USD from entering into a sustained downturn, it added.
--
UniCredit expects EUR/USD to rise to 1.13 by the end of 2024, versus 1.0926 currently, and to approach the estimated fair value at 1.15 by the end of 2025.
Sterling is likely to weaken across the board, but mostly in 2025, it said.
Bonds:
Treasury yields were higher.
Analysts say the U.S. economy appears to be holding up despite the Federal Reserve interest rate increases of the past 18 months, while Europe's economy continues to struggle after interest rate rises by the European Central Bank to quell inflation.
This week investors will focus on the Fed's preferred inflation gauge, the personal consumption expenditures index for October.
Energy:
Oil futures edged higher early Monday in a likely technical rebound after falling for a fifth week on Friday.
Given the OPEC+ meeting this Thursday, expectations are that Saudi Arabia will at least roll over its additional voluntary production cut of 1 million barrels/day into 2024, ING commodities strategists said.
There's also a growing possibility of a deeper output reduction from the broader group, which would offer good support to the market going into 2024, the strategists added.
Metals:
Gold ticked higher early Monday.
There appear to be bets that the Fed is done with its interest-rate increase cycle, Phillip Securities Research said, noting gold rose above the key $2,000/oz level on Friday.
Prospects that the Fed's tightening cycle may be over could increase the appeal of the non-interest-bearing precious metal.
--
Copper prices declined but remain relatively high given the tight supply, Nanhua Futures analysts said.
Chilean miner Antofagasta and Chinese smelter Jinchuan Group have agreed to lower treatment and refining charges, which will lower copper processing fees and support demand for copper ore, they add.
Also, lower copper inventories will likely help keep prices strong in the coming week, the analysts said.
--
Iron ore prices are lower in Asia.
The market may have realized that some concerns about weak supply are likely exaggerated, said Liz Gao, a senior analyst with CRU Group.
Intervention by the Chinese government last week led to short-term price corrections but it doesn't change actual supply and demand, and prices should eventually fall in line with the supply and demand balance, she said.
TODAY'S TOP HEADLINES
Stock market heads into year's end with serious momentum. What that means for December and beyond.
Barring a sudden bout of post-Thanksgiving indigestion, the U.S. stock market looks poised to log a healthy November rally. And while there are certainly no guarantees, history says momentum is likely to beget momentum into year-end.
"I think the market is set up for a strong final six weeks of 2023 and I would expect the market to build on that momentum into year-end," said Michael Arone, chief investment strategist at State Street, in a phone interview.
Beijing Pledges More Financial Support to Aid Private Economy
Chinese authorities rolled out a new set of measures to pump more financial resources to help the country's struggling private sector, the latest effort by Beijing to revive weakening business confidence amid economic headwinds.
Ministries led by the People's Bank of China said they would ask Chinese banks to set annual targets for services to private businesses and raise the weight of such services in lenders' performance reviews, according to a notice on the central bank's website Monday.
Investors Are Hungry for Risk-and Holding Record Cash Sums
Stocks and bonds have surged in November. With record investor balances in money-market funds, some analysts are optimistic that they have more room to run.
Everything from technology stocks to junk-rated company debt has been rising after an encouraging inflation report reinforced bets that the Federal Reserve can achieve a soft landing by cooling the economy without pushing it into a deep recession.
Hot Healthcare Hiring Bolsters Cooling U.S. Labor Market
A healthcare hiring boom is helping offset weaker job growth in other areas of the softening U.S. economy, boosting its chances of skirting a recession.
The industry could serve as a strong job generator for years to come as an aging population and Covid-19 fuel widespread worker shortages and greater needs for healthcare services.
Hostage Releases Bring Reunions, Relief-And Growing Pressure to Free More
TEL AVIV-The release of dozens of hostages by Hamas in recent days under a fragile cease-fire deal has brought a measure of relief to Israelis who have spent the last seven weeks agonizing over the fate of the more than 200 people taken from Israel.
It has brought joyful reunions for families torn apart by the Oct. 7 attacks, but the homecomings have also been mixed with anguish, as scores of Israelis remain in captivity. The releases have left many families separated, with fathers and husbands still in Gaza. With each wave of hostages released, calls to bring the rest home grow louder.
Hamas Hands Over More Hostages to Red Cross as Negotiators Work to Extend Truce With Israel
Hamas released 17 Israeli and foreign hostages on Sunday, including a 4-year-old-girl with dual U.S.-Israeli citizenship, as negotiators remained locked in talks over a possible extension to the four-day deal that halted fighting.
Israeli authorities said that 14 Israelis were freed Sunday afternoon and left the Gaza Strip. Egyptian and Qatari officials involved in the negotiations to free the hostages said that three Thai citizens were also released. Among them is a dual U.S.-Israeli citizen, four-year-old Abigail Mor Idan, whose parents were killed on Oct. 7.
Behind Credit Suisse's Fall: A Chairman's Lasting Mark on the Culture
When Credit Suisse's board met to approve the bank's forced sale to UBS in March, paintings of every bank chairman since 1856 lined the boardroom.
A lawyer from Zurich, Urs Rohner, was the last to get a portrait. Chairman between 2011 and 2021, he wasn't there in person that day. But his tenure loomed over the proceedings. He had helped turn one of Switzerland's most solid institutions into a tinderbox.
Gaza Diplomacy Cements Qatar's Global Mediator Role
DOHA, Qatar-Qatar's diplomacy in the Gaza war, including help in arranging a temporary cease-fire and hostage-release deal that took effect Friday, cements the ultrarich Muslim nation as Washington's preferred interlocutor with extremist groups and pariah states-in the Middle East and increasingly around the world.
It is an improbable role that began to take shape some 30 years ago as the small Persian Gulf monarchy sought to secure itself in the midst of bigger neighbors by resolving regional disputes while winning the trust and gratitude of the U.S. and other Western governments. It has also hosted a major U.S. military base for two decades and purchased billions of dollars in arms from the U.S. and Europe.
Will Livestreaming Be TikTok's Amazon-Killer?
TikTok is trying to tap in to shoppers in the U.S. So-called social shopping is already a huge phenomenon in Asia.
Success isn't guaranteed-and politics could intervene. But given how effectively TikTok has already disrupted the social-media landscape, U.S. e-commerce giants like Amazon should be watching their back.
Meta Designed Products to Capitalize on Teen Vulnerabilities, States Allege
Meta Platforms sought to design its social-media products in ways to take advantage of known weaknesses of young users' brains, according to newly unredacted legal filings citing internal company documents.
An internal 2020 Meta presentation shows that the company sought to engineer its products to capitalize on the parts of youth psychology that render teens "predisposed to impulse, peer pressure, and potentially harmful risky behavior," the filings show.References to the documents were initially redacted in the suit, which was filed in late October by members of a coalition of 41 states and the District of Columbia, alleging that Meta has intentionally built Facebook and Instagram with addictive features that harm young users. Meta approved the filing of an unredacted version on Wednesday.
Write to singaporeeditors@dowjones.com
Expected Major Events for Monday
07:00/NOR: Oct Retail Sales
(MORE TO FOLLOW) Dow Jones Newswires
11-27-23 0016ET
