Wednesday's Markets Update: (November 27, 2024)

28 Nov 2024 by rate3

On Wednesday, equities closed lower as investors took profits after recent gains, with tech stocks leading the downturn. Investors ignored falling PCE and a slowing economy, which plays into the hands of the Fed's doves. The economic situation in both Germany and France continued to worsen. ETH surged 10% while BTC remains in an accumulation mode.

Details

Core PCE inflation rose by 2.1% QQ in Q3, slightly below expectations. 1Y trend: "Side(Bea)
The economy grew at an annualized rate of 2.8% in Q3 . Personal consumption increased, driven by both goods and services. Government spending and fixed investment also contributed to growth. However, net trade had a negative impact, and inventory investment was a drag. 1Y trend: "Side (Bea)
The Chicago PMI fell to 40.2 in November, indicating a continued contraction in economic activity. Production, employment, backlogs, and inventories declined. New orders increased slightly, and input prices moderated. 1Y trend: "Down (ISM)
New orders for manufactured durable goods increased slightly by 0.2% in October, missing market expectations. 1Y trend: "Side (Census)
30-year fixed mortgage rates declined to 6.86% in the week ending November 15th. This marks the first decrease in nine weeks, following a recent increase due to Trump's election and expectations of slower Fed rate cuts. Rates for jumbo and FHA loans also decreased. 1Y trend: "Down (MBA)
Initial jobless claims remained unchanged at 213,000 in the week ending November 23rd, below market expectations. This suggests a strong labor market despite recent rate hikes. However, an increase in non-seasonally adjusted claims and outstanding claims indicates some potential weakness. 1Y trend: "Side (DOL)

Crypto

Brazilian lawmaker has proposed the creation of a BTC Sovereign Strategic Reserve (RESBit), potentially allocating up to $18.6B, or 5% of Brazil's international reserves. The initiative aims to diversify Treasury assets and protect against currency fluctuations, while supporting the central bank's digital currency, the Drex. The bill also seeks to modernize Brazil’s financial management, drawing inspiration from other nations successfully integrating blockchain technology. Brazil's Central Bank and Ministry of Finance would oversee the reserve, reporting on its performance biannually. (source)

World Markets

German consumer confidence fell to a nine-month low in December. Declining income expectations, job security concerns, and a pessimistic economic outlook have dampened consumer sentiment. Purchase intentions and economic expectations have also weakened. 1Y trend: "Up (GFK)
Initial jobless claims in France increased to 53.6 thousand in October, a significant rise from the previous month. This indicates a worsening labor market situation in the country. 1Y trend: "Up (FR)
Russian industrial production grew by 4.8% YoY in October, driven by increased manufacturing output, particularly in sectors related to military production. While some sectors like electricity and raw material extraction declined, overall industrial activity showed significant growth. 1Y trend: "Side Russian retail sales grew by 4.8% YoY in October, a slower pace than the previous month. While food product sales increased, non-food product sales slowed down. On a monthly basis, retail sales declined slightly. 1Y trend: "Down Russia's GDP grew by 3.2% YoY in October, maintaining the same pace as the previous month. 1Y trend: "Down The Russian ruble plummeted to a record low, exceeding 110 per dollar. New sanctions on Gazprombank and other financial institutions have further isolated Russia from the global financial system. Additionally, relaxed capital controls and reduced forex conversion requirements have weakened the ruble. 1Y trend: "Up, Depreciating (RU)

Currencies

The dollar index fell 1% as investors counterweight economic data and the Fed's cautious stance on future rate cuts. 1Y trend: "Up, Appreciating