AGI – The markets strengthen, waiting for the release of Nvidia’s quarterly results and the Fed’s minutes today and while the expectation grows that the cost of money has reached its peak and that the Federal Reserve and the ECB will leave rates unchanged for the rest of the year and will start cutting them in May-June.
Today, Tuesday 21 November, the Asian stock markets rise to their highest level in two months and the futures on Wall Street and in Europe also advance, albeit cautiously, while the dollar remains at a two-month low and the rally of the three New York lists continues, even in this week which in the USA will be shorter than usual, due to the celebration of Thanksgiving on Thursday and for Black Friday.
The Tokyo Stock Exchange is little moved, after rising 28% this month, making it the best-performing stock market in Asia. Shanghai advanced and Hong Kong rose 1% as easing tensions between the US and China lifted sentiment. Seoul also gained almost 1%. On the other hand, the greenback shows the rope due to the Fed’s softening, with the euro rising above 1.09 and the yen falling, after a seven-week low of 147.86 against the dollar.
Treasury yields are also adding salt to the tail of the US currency, with the 10-year falling below 4.5%. Futures were flat on Wall Street, after yesterday in New York the Nasdaq led the charge, rising by more than 1%, while heavyweight Microsoft advanced by 2%, reaching a record level in the wake of the news that the former head of OpenAI, Sam Altman will join the Cupertino giant to work on the development of artificial intelligence. Meanwhile, around two thirds of OpenAI’s employees have threatened to resign if the board of directors does not throw in the towel, after deciding last Friday to dismiss Altman himself and the other co-founder Greg Brockman.
Also highlighted Boeing, up 4.6% after Deutsche Bank upgraded the plane maker’s rating. Oil prices accelerate and extend their gains as investors look ahead to the November 26 OPEC+ meeting, with the cartel reportedly considering further supply cuts to support prices. Today in Asia, WTI and Brent futures are slowing down a bit, after having risen above 77 dollars and over 82 dollars a barrel respectively.
EuroStoxx futures are above parity, after that yesterday, November 20, the European stock markets closed in no particular order. Paris rose by 0.18% and Milan, despite Moody’s confirming Italy’s ‘Baa3’ rating and raising its outlook, appears uncertain and closes at +0.15%, while the spread between BTPs and Bunds is reduced to 173 points.
Frankfurt, on the other hand, did badly, losing 0.1%, weighed down by the shares of the pharmaceutical giant Bayer, which collapsed by 18%, to the lowest levels in the last ten years, after the pharmaceutical company announced that an advanced-stage study for a drug that thins blood for heart disease has failed to prove its effectiveness. This is Asundexian for atrial fibrillation. Over the weekend, Bayer also lost a key lawsuit in the United States over the weedkiller Roundup, acquired through its merger with Monsanto.
Down 0.11% London, despite In Great Britain Prime Minister Rishi Sunak promised to cut taxes “over time”, ensuring that the tax burden will be reduced in a sustainable way. This week on the macro front, the main data to monitor will be the manufacturing and services PMIs of the main economies, starting on Thursday with the European ones – both expected to contract – and ending on Friday with the Japanese and US ones.
For the United States, the forecast is for a return to contraction in the manufacturing sector, while the services sector should remain slightly in the expansion zone. The usual weekly data on unemployment benefits should also be monitored carefully, in light of the indications of a weakening of the labor market that emerged from the values published this week.
On the central banks front Numerous interventions by ECB bankers are expected, including President Christine Lagarde who will speak today and Friday. On the calendar, in addition to the Fed minutes, are those of the ECB, which will be released on Thursday and the Swedish, Turkish and South African central banks will give their opinions on the same day. The first two are expected to raise rates by 25 basis points and 250 basis points respectively, compared to unchanged rates expected in South Africa. In Argentina, dollar bonds rose by about 5%, reaching their highest level since September, following the victory of anarcho-capitalist outsider Javier Milei in the South American country’s presidential elections. The Buenos Aires stock exchange remained closed yesterday but the shares listed in the United States of the energy company YPF SA increased by around 40%.
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