Dow fell 99, advancers over decliners about 3-2 & NAZ jumped a hefty 347 to a new record. The MLP index added 4+ to the 303s & the REIT index was off 3 to the 418s. Junk bond funds fluctuated & Treasuries saw more selling which raised yields. Oil rose 1+ to go over 70 & gold soared 35 to 2753 (more on both below).
Dow Jones Industrials
The US budget deficit swelled in Nov, putting fiscal 2025 already at a much faster pace than a year ago when the shortfall topped $1.8T, the Treasury Dept reported. For the month, the deficit totaled $367B, 17% higher than Nov 2023 & taking the total for the first 2 months of the fiscal year more than 64% higher than the same period a year ago on an unadjusted basis. The increase came despite receipts that totaled $302B, about $27B more than last Nov. Outlays totaled $668B, nearly $80B more from a year ago. The increase in red ink brought the national debt to $36T as the month drew to a close. On an adjusted basis, the deficit was $286B has totaled $544B YTD, an increase of 19%. Though the Fed has enacted 2 rate cuts since Sep totaling 3 qtrs of a percentage point, interest expenses continue to be a big contributor to the deficit. Net interest expenses totaled $79B on the month & are now at $160B for the fiscal year, outpacing all other outlays except Social Security, Medicare, defense & healthcare. The Treasury Dept expects to pay $1.2T this year in total interest on debt.
Budget deficit swells in November, pushing fiscal 2025 shortfall 64% higher than a year ago
Tesla (TSLA) shares jumped to an all-time high, surpassing their
prior record reached in 2021, sparked by a post-election rally & investers' increased enthusiasm for Elon Musk's electric vehicle company. The
stock rose to an intraday high of $420, $6 above its
previous peak, & closed ahead of its highest finish of
$409 on Nov 4, 2021. TSLA's market value has swelled by about 69% this year, with almost all of those gains coming since Donald Trump's election victory early last month. The stock's 38% rally in Nov
marked its best monthly performance since Jan 2023 & its 10th best
on record. Musk poured $277M into a pro-Trump campaign
effort, according to Federal Election Commission filings, & turned his
support for the Rep nominee into another full-time job ahead of
the election, funding a swing-state operation to
register voters & using his social media platform X to constantly
tout his preferred candidate. The world's richest person, who has seen his net worth swell to more than $370B, according to Forbes,
is set to lead the Trump administration's “Department of Government
Efficiency,” alongside onetime Rep presidential candidate Vivek
Ramaswamy. His new role could give Musk power over federal
agencies' budgets, staffing & the ability to push for the elimination
of inconvenient regulations. Musk said in
Oct that he intended to use his sway with Trump to establish a
“federal approval process for autonomous vehicles.” Currently, approvals
happen at the state level. TSLA stock jumped 23.78 to go over 424.
Tesla shares climb to record, boosted by 64% pop since Trump election victory
Nike (NKE), a Dow stock,has renewed its partnership with the National Football League for
another 10 years after the league briefly opened the bidding process to
competitors & held talks with other companies. Under the terms
of the deal, NKE will continue to be the exclusive provider of uniforms
and sideline, practice & base layer apparel for all 32 NFL teams
through 2038. NKE has been the NFL’s exclusive apparel provider since
2012. “This
partnership renewal is a testament to the strength and success of our
collaboration with the NFL,” NKE's newly appointed CEO Elliott Hill
said. “As we embark on this new chapter, we’re
committed to co-creating cutting-edge solutions that meet the rapidly
changing needs of NFL athletes and fans, while fueling the league’s
growth and development initiatives.” As part of the partnership,
NKE said it will work to expand football's global reach & use its
sports research lab to address lower body injuries & boost footwear
safety. The company said it will continue to support high school & college football & help bring the sport's “most compelling
narratives to life.” “Nike has been an invaluable partner since
2012 and we couldn’t be more excited to have them onboard for years to
come,” NFL Commissioner Roger Goodell said. “In addition
to their products and services for our clubs, players, or fans, Nike is a
strategic partner who will help us grow football internationally,
support youth football and make advances in player safety.” NKE stock rose 2.10.
Nike renews its contract with the NFL after league briefly courted other bidders
Gold gained after an inflation print came in line with expectations, boosting the likelihood of a Federal Reserve rate cut next week, while investors awaited US Producer Price Index (PPI) data tomorrow for further direction on monetary policy. Spot gold climbed 0.9% to $2717 per ounce. Spot prices for bullion hit a record high of $2790 an ounce on Oct 31 & US gold futures settled 1.4% higher at $2756. The US consumer prices rose 0.3% on a monthly basis in Nov, data from the Labor Dept showed. Annually, it climbed 2.7% after increasing 2.6% in Oct. The forecast called for the CPI rising 0.3% & advancing 2.7% year-on-year. Gold is higher on the back of the premise that CPI data coming in benign or certainly in line with expectations, inflation not rising any further but remaining steady will allow the Fed to almost certainly cut rates at the next FOMC meeting. Traders predict a 95% chance of a further 25-basis-point cut at the Fed's Dec 17-18 meeting, compared with an about 86% chance seen before the inflation report.
Gold advances as inflation data fuels Fed rate cut optimism
Crude oil prices headed higher for a 3rd straight session, with China's plans to boost its economy expected to lift energy demand & as talk of potential new US oil sanctions on Russia raised prospects for tighter global supplies. Official US data revealed a weekly fall in domestic crude supplies for a 3rd consecutive week, while major oil producers known as OPEC cut their oil demand growth forecasts for this year and next. West Texas Intermediate crude for Jan rose 59¢ (0.9%) to $69.18 a barrel after settling yesterday at the highest in a week. Feb Brent crude, the global benchmark, climbed by 64¢ (0.9%) at $72.83 a barrel. Support for oil has been tied to the recent pledge by China's Politburo on more aggressive stimulus measures. China's soft economy has been cited as a key factor in crude's weak 2024 performance, with WTI down more than 4% in the year to date & Brent down 6.3% as of yesterday, based on the most actively traded contracts. Oil prices also gained following a report that the Biden administration is considering new sanctions on Russian oil in a effort to weaken Russia's ability to fund its war with Ukraine, before incoming Pres Trump takes office. A US intelligence assessment concluded that Russia may use its lethal intermediate-range ballistic missile against Ukraine again in the coming days.
Crude climbs as U.S. reportedly considers oil sanctions on Russia
US stocks rallied, led by Big Tech, as investors digested another month of sticky inflation data that met expectations & likely pointed to a Federal Reserve interest rate cut next week. Fresh inflation data out today showed consumer prices rose as forecast in Nov, keeping the Federal Reserve on track to lower interest rates again in Dec. Meanwhile safe haven gold is in record territory.
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