U.S. Indices saw heavy losses on Monday, with all sectors, aside from Communications and Utilities, in the red. There was no one specific catalyst for the risk-off trade to start the week, just further concerns regarding elevated valuations in the AI space, while the S&P 500 slipped below 6,700 and closed beneath its 50-Day Moving Average of 6,707. Back to sectors, the Communications sector was boosted by Alphabet (GOOGL) being one of the clear gainers and supported after Berkshire Hathaway built a stake in the Co., as its latest 13-F declared. The Dollar was bought in a risk-averse environment, to the detriment of all G10 peers, with both the Australian and New Zealand Dollars underperforming. On data, NY Fed Manufacturing was solid, while the influential governor Waller toed a usual dovish tone, as he reiterated his support for a December rate cut (25bps) and does not see any factors that would cause acceleration in inflation. Jefferson reiterated the fed needs to proceed slowly as monetary policy approaches the neutral rate. Treasuries were supported and saw slight upside, but gains were capped on Amazon’s bond sale, whereby the behemoth upsized its USD 12 billion offering to USD 15 billion, in its first US bond sale since 2022. The crude complex traded in very narrow ranges on Monday, but settled marginally lower in light headline risk, although did see strength in the EZ morning in reports that Israeli warplanes targeted areas in southern Lebanon. Gold and Bitcoin were also pressured amid the equity weakness, with Bitcoin hitting its lowest level in six months and Gold testing USD 4,000/oz. While the scheduled events on Monday were light, it heats up later this week with particular focus on FOMC Minutes, NVIDIA earnings (Wed), and Sept. US jobs report (Thurs). The New York Fed saw a solid report with activity rising, employment remaining in expansionary territory, while the pace of price increases slowed. The November Empire State Manufacturing survey saw current business conditions rise to +18.7 from 10.7 in October, well above the 5.8 forecast. The report noted that new orders and shipments increased significantly. New orders rose to 15.9 from 3.7. Delivery times lengthened modestly, and supply availability worsened somewhat. Inventories expanded. Labour market indicators improved, pointing to a small increase in employment and a longer average workweek. The employment index rose to 6.6 from 6.2. The pace of both input price increases and selling price increases slowed slightly but remained elevated. Prices paid slowed to 49 from 52.4, while prices received fell to 24 from 27.2. Capital spending plans grew. Firms expect conditions to improve in the months ahead, though firms were not as optimistic as last month. Looking ahead, prices paid and received both slowed, while employment improved. The Fed Vice Chair (Jefferson) largely repeated comments he made in early November. The Vice Chair said the Fed needs to proceed slowly as monetary policy approaches the neutral rate, and it is still not clear how much government data will be available for the next meeting. He echoed that current Fed policy rate is still “somewhat restrictive”, and the balance of risks has shifted in recent months, with increased potential downside to employment. Looking ahead, and to next week, Jefferson looks forward to reviewing the Biege Book. Fed Governor Waller made the case for continuing rate cuts and voiced support for a 25bps cut in December, saying it would offer additional labour market insurance amid signs the economy is softening. Warned that restrictive policy may be weighing on activity, with the labour market weak and near stall speed. Argued that underlying inflation is close to 2%, expectations remain well anchored, and tariffs are merely a one-time price level shock. Said he sees no factors likely to accelerate inflation and expects that no upcoming data, including the jobs report, would change his view that another cut is warranted. Elsewhere, both Oil and Gold closed lower by 0.6% and 1% respectively.
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For anyone following my Platinum Service it made 203 points yesterday and is now ahead by 3192 points for November, after ending October with a nice gain of 5110 points after closing September with a gain of 3774 points while ending August with a gain of 3362 points after closing July with a gain of 3753 points after closing June with a gain of 3530 points, having closed May with a gain of 3606 points, after closing April with a gain of 7685 points after closing March with a gain of 2254 points while closing February with a gain of 4180 points. January ended with a gain of 2768 points while 1997 points were gained in December. October ended with a gain of 2179 points, after closing September with a gain of 4402 points, following a loss of 301 points in August. July gained 1908 points while June saw a gain of 2074 points. The Platinum Service made a record 9619 points in October 2022. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 2300 points. I have a YouTube Channel which contains recent interviews I have given This can be viewed by clicking HERE Please subscribe to this for new interview notification
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