Unlock the Potential of Black Friday Stocks
Black Friday and Market Trends
The Black Friday session is a crucial event in the world of finance. It marks the beginning of the holiday shopping season and often has a significant impact on stock markets. This year, with the S&P already showing a substantial gain since January 1, the last trading day of the month takes on added importance. Investors are keenly observing how stocks will fare in December, and the Black Friday session could provide valuable insights.
Retailers are gearing up for this busy shopping day, and their performance can influence stock prices. The increased activity and consumer spending during Black Friday can lead to volatility in the markets. However, with futures showing positive movements, there is optimism among investors that stocks will continue their upward trend.
Futures and Stock Movements
The futures for the Dow Jones Industrial Average adding 135 points or 0.3% indicate a positive sentiment in the market. This suggests that investors are expecting stocks to perform well in the upcoming session. The rise in S&P 500 contracts by 0.3% and Nasdaq futures by 0.4% further supports this optimism. These movements reflect the confidence of market participants and their belief in the potential for stock gains.
While the lack of significant news to digest during the Black Friday session may seem like a drawback, it also allows investors to focus on the overall market trends. The absence of major events can lead to a more stable trading environment, which may be beneficial for long-term investors. However, it is important to remain vigilant and monitor any unexpected developments that could impact stock prices.
Closing Time and Market Outlook
The market's closure at 1 p.m. on Black Friday adds an element of uncertainty. It means that investors will have less time to react to any news or events that may occur during the session. However, this also allows for a more focused trading period and may lead to more decisive market movements.
Looking ahead to December, the performance of stocks during this last trading day of the month could set the tone for the entire month. If stocks continue to gain, it may signal a positive start to December and potentially lead to further upward momentum. On the other hand, if there is a lack of momentum or a decline in stock prices, it could raise concerns about the market's performance in the coming weeks.
Yen's Surge and BOJ's Anticipated Policy Tightening
After Tokyo's inflation rate data came out higher than forecasts one month ago, the yen climbed to 151 per dollar. The annual average consumer inflation rate maintained pressures at an above-forecast level when core inflation, which excluded fresh food and energy prices, was taken into account. This fueled expectations of an early monetary policy tightening by the Bank of Japan (BOJ). Market prices suggest a 60 percent probability of a 25 bps rate hike when the BOJ policymakers meet in December, which could bring a significant policy shift.International Market Dynamics
European shares remained relatively flat, while mining shares showed signs of advancement. Investors are awaiting the US Federal Reserve's decision and indications that Beijing is willing to boost credit growth. In thin post-Thanksgiving trade, US Treasury yields fell as the dollar faced its worst week in three months. This was in line with the market's anticipation of the Fed's policy switch to a cut.Asian Market Complexities
Asian markets presented a somewhat intricate picture. Countries like Japan and southern Asian nations were on the list. Chinese equities rose as investors pinned their hopes on policy easing. However, Japan and South Korea experienced declines. South Korea's interest rate cut led to it losing ground. Investors are continuously monitoring impending core inflation reports and the next key milestones of global monetary authorities in this constantly evolving macroeconomic landscape.Uncover the Hidden Dynamics of Asia's Market
Japanese National CPI and Prelim PMIs
The Japanese National CPI for October came in mostly in line, with all three figures comfortably above the BOJ target of 2.0%. Meanwhile, Japan's prelim PMIs showed Manufacturing logging its 5th straight contraction while Services returned to expansion after a one-month contraction. The 10-year JGB yield briefly touched 1.10% (the first time since early July) but dipped back 2 bps to 1.08% during the session. This provides valuable insights into the Japanese economic landscape and its implications for global markets.
The Bank of Japan's (BOJ) announcement related to outright bond buying operations in different timeframes was inline with prior purchases. Additionally, the terminal rate seen at 1.00% according to a financial press poll of economists gives an indication of the central bank's stance.
Australia's Prelim Manufacturing and Services
Australia's prelim Nov Manufacturing saw a 10th straight contraction, and Services also dipped into contraction for the first time in 10 months. This indicates a challenging period for the Australian economy and highlights the need for careful monitoring and policy adjustments.
The Australia bond auction saw just 2.04%, 4 bps below the market yield of 2.08% and towards record lows of ~2.00%. The PBOC also set the Yuan stronger by 555 pips over the estimate, while the offshore Yuan held the 7.25 handle. Earlier, a China state newspaper said the Yuan “may gain strength” as the strength of the USD ‘wanes’. These currency movements have significant implications for trade and investment.
China's Economic Indicators and State Policies
The China 10-year bond auction result showed a yield of 2.0400%, 4 bps below the prior yield. The state newspaper's statement about the Yuan's potential strength and the Vice Commerce Min Wang's comment on China's foreign trade maintaining a “stable and sound development trend” provide insights into the Chinese economic outlook and policy directions.
China's Guangzhou city's decision to eliminate the difference between ordinary and non-ordinary housing from Dec 1st is another significant development. The PCA's report on China Nov Preliminary Retail Passenger Vehicle Sales M/M showing a +15.4% increase compared to +7.2% prior also indicates positive consumer sentiment. Moreover, the MOFCOM's move to increase financing support for foreign firms and trade firms is likely to have a positive impact on economic growth.
Adani Group and US Federal Charges
Following group losses of ~20% yesterday on the US Federal charges of bribery against its Founder and Chair, Adani Enterprises dropped -6% with group stocks down a further -3% to -6% in pre-market trading. Adani Green Energy and Adani Energy Solutions also saw a -10% decline. This incident highlights the challenges faced by companies in the face of regulatory actions and market uncertainties.
US Equity Futures and Other Economic Data
US equity FUTs were -0.1% during the Asia session. In North America, various economic indicators showed mixed results. The Initial jobless claims were 213K, the lowest since Apr, while continuing claims were 1.908M, close to a 1-year high. The Nov Philadelphia Fed business outlook was -5.5, lower than the expected +8.0. The Oct existing home sales were 3.96M, in line with expectations. The Oct leading index was -0.4%, slightly lower than the expected -0.3%. These data points provide a snapshot of the US economic health and its potential impact on global markets.
The Weekly EIA Natural Gas inventories showed a -3 BCF reading, the first negative since early Sept, indicating a potential shift in the energy market. Matt Gaetz's withdrawal from consideration as AG is another significant event in the US political and economic landscape.
European Economic Developments
In Europe, the Nov GfK Consumer Confidence in the UK was -18, slightly better than the expected -22. The French-German 10-year yield spread rose to a one-month high amid the French budget saga. The ECB's Patsalides (Cyprus, voter) emphasized the need for a gradual approach to rate cuts. The BOE Dep Gov Ramsden noted that inflation is close to target while service inflation remains quite high. The South Africa central bank (SARB) cut interest rates by 25 bps to 7.75% as expected. These developments have implications for the European economic recovery and monetary policy.
The ECB's Holzmann (Austria) stated that warnings of undershooting 2% aren't warranted and that a December rate cut is the likeliest outcome but not certain. The BOE's Mann (dissenter) advocated for holding rates for longer to evaluate persistence. The Eurozone nov advance consumer confidence was -13.7, lower than the expected -12.4. The Spanish Parliament's approval of a new fiscal package is another important event in the European context.
Levels and Market Movements
As of 00:20 ET, the Nikkei 225 was +1.0%, the ASX 200 was +0.9, the Hang Seng was -1.4%, and the Shanghai Composite was -1.5%. The Kospi was +1.1%. Equity S&P500 Futures were -0.1%, the Nasdaq100 was -0.1%, the Dax was +0.2%, and the FTSE100 was +0.1%. In the currency markets, the EUR was at 1.0465-1.0479, the JPY was at 153.97 -154.59, the AUD was at 0.6488-0.6522, and the NZD was at 0.5829-0.5861. Gold was +0.6% at $2,689/oz, Crude Oil was flat at $70.11/brl, and Copper was -0.7% at $4.0825/lb. These levels and market movements reflect the complex interplay of various factors in the global economy.
Looking ahead, with events such as Fri Nov 22nd (Fri eve UK Retail Sales, DE & US Nov Flash PMIs) on the horizon, the Asia market is set to continue its dynamic journey. Stay tuned for more updates and insights.