Wednesday's Markets Update (November 20, 2024)

20 Nov 2024 by rate3

On Wednesday, equities closed mixed, with Nvidia's earnings report and geopolitical tensions impacting market sentiment. The S&P closed flat, while the Nasdaq declined slightly. Retail stocks, led by Target's disappointing earnings, fell sharply. Investors are also monitoring Trump's potential cabinet picks and their impact on trade policy. Gold is up due to worsening conditions on the EU war's front, while the Bank of China kept its lending rates unchanged due to inflation concerns. BTC surpassed $94K, continuing its rise toward $100K, while ETH remains in the red as traders sell it to capitalize on the BTC rally.

Details

30-year mortgage rates rose for the fourth consecutive week to 6.9%, the highest since early July. This increase is driven by rising Treasury yields and expectations of limited Fed rate cuts due to Trump's policies and potential inflationary pressures. 1Y trend: "Side" (MBAA)

Crypto

The Shanghai High Court ruled that cryptoassets possess "property attributes" under Chinese law, but only as commodities, not for use as currency or business instruments. This decision arose from a fraud case involving illegal token issuance and condemned the actions of the companies involved. Despite acknowledging crypto's value as a commodity, the Court maintained a strict anti-crypto stance, citing concerns over illegal financing and potential financial system disruption. China's rigorous crypto policies remain unchanged, even amidst rising global interest in the sector. (source)

World Markets

Eurozone construction output declined by 1.6% YoY in September. This decline reflects ongoing challenges in the construction sector, including rising costs and supply chain disruptions. 1Y trend: "Down" (EU)
UK annual inflation rose to 2.3% in October, exceeding expectations. This was primarily driven by higher energy prices. While food inflation remained steady, services inflation accelerated. Core inflation also edged up. 1Y trend: "Down"
Argentina recorded a trade surplus of 888M in October, a significant improvement over the previous year. Exports surged 30%, driven by agricultural and manufactured goods. Imports also increased, but at a slower pace. This positive trade balance is a result of increased global demand for Argentine commodities and improved export conditions. 1Y trend: "Side" (AR)

Currencies

The dollar index rose to a 2-year high, driven by escalating geopolitical tensions between Russia and Ukraine. Markets are concerned about potential trade wars and their impact on global economic growth. Additionally, uncertainty surrounding the appointment of a new Treasury Secretary and the potential for further rate cuts by the ECB have also supported the dollar's strength. 1Y trend: "Side"
The Chinese yuan weakened further, trading above 7.24 per dollar. The People's Bank of China kept key lending rates unchanged, signaling a cautious approach to further monetary easing. While the central bank remains committed to supporting economic growth, concerns about the global economic slowdown and potential US trade tensions continue to weigh on the yuan. 1Y trend: "Up, Depreciation"

Commodities

Gold prices rebounded to $2,650 per ounce, driven by increased geopolitical tensions between Russia and Ukraine. Russia's expanded nuclear doctrine and Ukraine's missile strikes fueled concerns about a potential escalation of the conflict. While the Fed is expected to cut rates in December, the magnitude of future cuts is uncertain due to persistent inflationary pressures. 1Y trend: "Up"
Silver prices eased to $31 per ounce, halting a recent rebound. While geopolitical tensions between Russia and Ukraine provided some support for silver as a safe-haven asset, weaker demand for industrial uses, particularly from the solar panel industry, limited price gains. Additionally, concerns about the impact of potential US tariffs on Chinese solar panels further weighed on silver prices. 1Y trend: "Side"