Monday's Markets Update (November 27, 2023)

27 Nov 2023 by rate3

On Monday, the number of sold houses decreased, the Dallas Fed's index dropped, and Nasdaq, along with other major stock indexes, were trading slightly lower as investors awaited key economic releases, including the Fed's preferred inflation measure, PCE. Nvidia, Microsoft, and Amazon saw positive movement as Cyber Monday sales commenced. However, retailers signaled a weakening in consumer spending despite a 7.5% increase in e-commerce spending on Black Friday compared to the previous year. Meanwhile, BTC and ETH both corrected on technicals, starting to form a double top on daily charts.

Details

The number of new single-family houses sold in the country decreased by 5.6% in October to 679K, below the predicted 723K. The high mortgage rates made it difficult for buyers to afford. Sales were varied, with the Northeast experiencing a 13.2% increase, while the South saw a 2.1% rise. The median price of houses sold was $409.3K, while the average price was $487K, compared to $496.8K and $543.3K a year ago.

The Dallas Fed's index for manufacturing in Texas has been deteriorating for three straight months, reaching its lowest level since July 2023. The production index fell into negative territory, while the new orders index has been negative for 18 months and the capacity utilization index returned to negative territory. The shipments index slipped, and labor market measures suggest slower employment growth and shorter workweeks. Price front, wage growth normalized, while material cost growth remained below average and selling prices fell. Expectations for future activity is mixed.

Macroeconomics

The Russian stock market (MOEX) edged higher, building on slight gains from last week, reaching 3220 (ATH: ~4200) as investors continued weighing the outlook for key Russian exports like oil and metals. Gains in oil companies supported the broader market index as Russia appears to be selling some oil above the $60 price cap through a fleet of tankers.

The Euro hovers on USD 1.09 near its highest point since August 10, surpassing $1.09, as market participants anticipate inflation data to gauge monetary policy. Despite subsiding inflation pressures in the Eurozone, robust wage growth poses a challenge to the European Central Bank's efforts to tame price surges, according to ECB President Christine Lagarde. She underscores the need for cautiousness, declaring that it's premature to proclaim victory over inflation. Lagarde anticipates further weakening of inflationary pressures but envisions transitory spikes in headline inflation with substantial uncertainty in the medium-term outlook. The forthcoming CPI report is expected to reveal a decline in the Euro Area's annual inflation rate to 2.7%, its lowest since July 2021, with the core gauge dipping to 3.9%, its lowest since June 2022.