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Futures

Stock Market Fluctuates Near Records; Bitcoin Holds at $103K

2024-12-05

In early trading on Thursday, the stock market presented a mixed picture as it aimed to continue its remarkable rally. Meanwhile, bitcoin remained stable after reaching a significant milestone of surging above $100,000 for the first time.

Market Overview and Index Movements

The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite were experiencing fluctuations near the unchanged mark. On Wednesday, each of these major indexes had achieved all-time highs, driven by substantial gains in technology stocks. This post-election rally was fueled by hopes that the incoming Trump administration would implement pro-growth policies, which would boost corporate earnings and stock market gains.Technology stocks, especially large-cap ones, were mostly in an upward trend early on Thursday. EV maker Tesla (TSLA) led the way with a gain of more than 4%. Apple (AAPL), Amazon (AMZN), Alphabet (GOOGL), Meta Platforms (META), and Broadcom (AVGO) were also making progress. However, Nvidia (NVDA) and Microsoft (MSFT) saw a slight decline.Among the significant movers in early trading, Synopsys (SNPS) shares took a hit, dropping 10% after the chip-design software maker provided a disappointing sales outlook. Fiserv (FI) also saw its shares slide 5% following the appointment of its CEO, Frank Bisgnano, by President-elect Donald Trump to lead the Social Security Administration.

Bitcoin's Impact on Crypto-Adjacent Stocks

Crypto-adjacent stocks were on the rise in the morning, in line with the movement of the bitcoin price. MicroStrategy (MSTR), one of the world's largest holders of the digital currency, saw its shares increase by 3%. Shares of crypto exchange Coinbase (COIN) and bitcoin miner Mara Holdings (MARA) also rose by 3% and 4%, respectively.Bitcoin itself was trading at $103,300 after surging to nearly $104,000 overnight. This came following news that Trump had named Paul Atkins to lead the Securities and Exchange Commission. Atkins will succeed Gary Gensler, who is a critic of the crypto industry and announced his intention to step down in January. Since the election, bitcoin has gained about 45% as investors expected the Trump White House and a crypto-friendly Congress to support measures beneficial to the asset class.

Yield on 10-Year Treasurys and Economic Outlook

The yield on 10-year Treasurys, which is closely related to market expectations about interest rate movements, fell to 4.20% on Thursday morning from 4.22% the previous afternoon. Investors are eagerly awaiting the scheduled release of the November jobs report on Friday morning. They are looking for information that could influence the Federal Reserve's decision-making on interest rates. Fed Chair Jerome Powell stated on Wednesday that the central bank could be cautious in cutting rates given the continued strength of the economy. The Fed's last policy-setting meeting of the year is scheduled for December 18.

Gold and Crude Oil Futures

Gold futures were down about 0.5% this morning, hovering around $2,660 an ounce. On the other hand, crude oil futures showed a slight increase.These various market movements and trends highlight the complex and dynamic nature of the financial markets, with different assets responding in different ways to a multitude of factors.

Live cattle futures have been engaging in a recent sideways trading pattern that shows no signs of abating. Traders are patiently awaiting cues from the cash market to determine the future direction. Cash cattle transactions with packers and feedlots are occurring on their own terms, with feedlots seemingly well-prepared to hold cattle for another week while packers have already made some purchases, potentially curbing their aggressiveness. Boxed beef prices have provided minimal guidance, with choice down $2.50 and select up $2.37. There has been no fresh news regarding the restriction of cattle imports from Mexico, which could potentially offer ongoing support to the market. Feeder cattle futures witnessed a setback on Wednesday, but the weakness is not expected to lead to further liquidation. The demand for feeder cattle at auctions remains robust.

Unraveling the Dynamics of Livestock Futures

BULL SIDE

There has been no update on the restriction of cattle imports from Mexico, which typically amounts to around 100,000 cattle entering the U.S. each month. This absence of news could potentially have a significant impact on the market. Additionally, cattle futures have been struggling to break above resistance and resume the uptrend, despite the restriction on cattle imports. The sideways trading range in cattle futures is building support, indicating that strong demand may be on the horizon and could support the market in the future.

As we look ahead, the seasonality and the time of year might pose a limit to further gains in cattle futures by the end of the year. However, the current market conditions suggest that there is still potential for growth if the right factors align.

BEAR SIDE

Weekly hog weights averaged 289.1 pounds, which is 1.5 pounds lower than a year ago. This indicates a potential shift in the hog market, and traders are closely monitoring these trends. On the other hand, hog weights have also shown an increase of 0.6 pounds from the previous week, driven by cheap feed. This could have implications for the overall hog market and its future performance.

Increasing daily volatility in the hog market often occurs when a market is nearing its peak. Traders become increasingly nervous and tend to focus on short-term trades, as seen in hogs over the past week. This volatility could lead to more uncertainty in the market and require careful monitoring by market participants.

For our next livestock update, make sure to visit our Midday Livestock comments between 11 a.m. and noon CST. Additionally, stay tuned to our Quick Takes throughout the day for regular updates on the futures markets.

In this year's DTN Ag Summit, we will delve into the state of national farm policy. This includes discussions on the timing of a farm bill, the composition of ag committees, and the new leadership at USDA. Some of the winners of the America's Best Farmers and Ranchers award will share their insights on selling directly to consumers. The DTN markets and weather team will also provide their perspective on what lies ahead in 2025. The DTN Ag Summit is scheduled for Dec. 5-6, 2024. Use this link to sign up: https://dtn.link/…

Robin Schmahl can be reached at rschmahl@agdairy.com.

International derivatives marketplace CME Group has made a significant move by announcing the launch of a 1-Ounce Gold (1OZ) futures contract on January 13, 2025. This decision comes after regulatory review and is set to open up new opportunities for market participants.

Unlock New Investment Horizons with CME Group's 1-Ounce Gold Futures

Gold as a Popular Investment

Gold has long been a favored asset class, attracting the attention of investors worldwide. In recent years, retail interest in gold has witnessed a remarkable surge. As more market participants recognize the importance of portfolio diversification, gold has emerged as a reliable hedge against market uncertainties. CME Group's decision to introduce the 1-Ounce Gold futures contract is in line with this growing trend, providing retail traders with an additional tool to access the gold market.The global benchmark Gold futures contract serves as the foundation for the 1-Ounce Gold futures, ensuring transparency and liquidity in the market. Traders can now benefit from the daily settlement price of this benchmark, which offers a clear reference point for pricing and risk management.

Benefits of 1-Ounce Gold Futures for Retail Traders

The launch of 1-Ounce Gold futures will bring several benefits to retail traders. Firstly, it will broaden their investment opportunities, allowing them to participate in the gold market with a smaller contract size. This makes it more accessible for individual investors who may have limited capital.Secondly, the futures contract provides increased flexibility. Retail traders can take advantage of the liquidity and efficiencies offered by CME Group's futures market, enabling them to enter and exit positions more easily. This flexibility is crucial in today's fast-paced trading environment, where traders need to be able to respond quickly to market changes.Moreover, the 1-Ounce Gold futures contract is financially-settled, providing a clear and transparent settlement mechanism. This reduces counterparty risk and ensures that traders can settle their positions with confidence.

CME Group's Existing Metals Products

CME Group's Micro Gold and Micro Silver futures products have already achieved remarkable success, becoming some of the fastest growing metals products in the market. This year, these products have reached record levels of participation, with average daily volume (ADV) for Micro Gold futures reaching 105,000 contracts and ADV for Micro Silver futures reaching 19,000 contracts.The success of these existing products has laid a solid foundation for the launch of the 1-Ounce Gold futures contract. It demonstrates CME Group's expertise in the metals market and its ability to meet the evolving needs of retail traders.In conclusion, CME Group's launch of the 1-Ounce Gold futures contract is a significant development in the derivatives market. It offers retail traders a new avenue for investing in gold and provides them with the flexibility and liquidity they need. With the global benchmark Gold futures contract as the foundation, this futures contract is set to play an important role in the gold market and contribute to the growth of the derivatives industry.