Markets struggle as rebels take over Syria, adding to MidEast unrest

Dow fell 240 (session lows), decliners slightly ahead of advancers & NAZ declined 123.  The MLP index fell 4+ to the 302s & the REIT index added 1 to the 426s.  Junk bond funds slid lower & Treasuries had more selling which brought higher yields.  Oil rose 1+ to the 68s & gold jumped 23 to 2682 (more on both below).

Dow Jones Industrials 

Optimism about household finances hit a multiyear high following Donald Trump's presidential election victory in Nov, according to a New York Federal Reserve survey.  Households expecting their financial situation to be better a year from now jumped to 37.6%, an increase of about 8 percentage points from Oct, the central bank's survey of approximately 1300 heads of households showed.  That was the highest reading since Feb 2020, just before the Covid-19 pandemic hit.  In conjunction with the rise of optimism, the level of those who expect their financial situation to get worse moved down to 20.7%, off nearly 2 percentage points from a month ago & the lowest since May 2021.  The results follow Trump's Nov 5 victory, which will send him back to the White House for a 2nd, nonconsecutive term.  He has promised a menu of lower taxes & deregulation to boost growth.  Though the macro economy has shown solid growth thru 2024, consumers remain stymied by price increases that spurred a cumulative increase in the consumer price index inflation gauge of more than 20% under Pres Biden.  Even with the increase in sentiment, consumers' inflation outlook is still cautious, according to the New York Fed survey.  Inflation expectations at the 1-, 3- & 5-year horizons all increased 0.1 percentage point, rising to 3%, 2.6% & 2.9%, respectively.  The Fed targets inflation at 2% but is still expected to lower its benchmark interest rate by a qtr percentage point when it meets next week.  Though Trump has made little mention of attacking the gov's debt & deficit load, the outlook there improved as well.  The median expectation for growth in gov debt was at 6.2%, down 2.3 percentage points from Oct & the lowest level since Feb 2020.

Household finance outlook hits highest level since February 2020 after Trump win, Fed survey shows

Cable CEO Dave Watson told investors that the company expects to lose more than 100K broadband subscribers during the 4th qtr as the market remains “competitively intense.”  Cable broadband growth has been in the middle of an ongoing slump.  While execs have also pinned the drop on the slowdown in the buying & selling of homes, noting that there are fewer people signing up for cable when they get a new house, the ramped-up competition from wireless providers has played a big role.  “Our competition remains competitively intense. That has not changed; it has been pretty consistent throughout the year,” particularly among “price conscious” consumers, Watson said.  He noted that the 4th qtr is likely to reflect the first ½ of the year, when the company lost “just under 100,000” customers per qtr.  Despite the continued cable trends, Watson added that Comcast's (CMCSA) broadband business has remained stable when it comes to its higher-end internet packages.  His warning comes after CMCSA saw a relatively improved 3rd qtr when it comes to losses.  Oct domestic broadband net losses totaled 87K during the 3rd qtr.  However, excluding the losses that stemmed from the end of the gov's Affordable Connectivity Program, which had offered a discount for qualifying low-income households, the company estimated there was a growth of 9K customers.  CMCSA had nearly 32M domestic broadband customers as of Sep 30.  He attributed the 3rd-qtr improvement to seasonality.  The return to school often means improved broadband numbers & noted that NBCUniversal's marketing of the Summer Olympics helped.  The stock dropped 4.10 (9%).

Comcast shares tumble as executive calls broadband ‘intensely competitive’

Cookie & snack giant Mondelez ( MDLZ)has made a preliminary takeover approach for Hershey (HSY), according to people familiar with the matter, a combination that would create 1 of the largest food & beverage businesses in the world.  Shares of the legacy chocolate maker shot up on the news.  Mondelez made a previous takeover bid for HSY in 2016, which the company rebuffed.  HSY hired advisors to help it respond to the interest.  Mondelez made the approach shortly after HSY reported 3rd-qtr earnings that missed expectations last month.  HSY declined to comment on “market rumors and speculation.”  HSY stock soared 18.98 (11%) & MDLZ lost 1.46.

Hershey stock soars on report of another Mondelez takeover attempt

Gold price nudged higher, favored by its safe-aven status amid the increasing uncertainty in the Middle East after the fall of the Bashar al-Assad regime in Syria.  Beyond that, The People's Bank of China announced over the weekend that it resumed gold purchases in Nov after a 6-month pause, which is giving an additional boost to the precious metal.  Data from the US released on Fri revealed that the country's labor market remains solid, but the increasing unemployment rate confirmed expectations that the Federal Reserve would cut rates by 25 bps next week.  This, & a mild risk appetite, are keeping $ upside attempts limited.

Gold advances as geopolitical uncertainty increases, China resumes purchases

Oil prices climbed more than 1% on higher geopolitical risk after the fall of Syrian Pres Bashar al-Assad & as top importer China flagged its first move towards a loosened monetary policy stance since 2010.  Brent crude futures settled $1.02 (1.4%) higher at $72.14 per barrel US & West Texas Intermediate crude futures were up $1.17(1.7%) to $68.37.  Syrian rebels said on state television on yesterday they had ousted Assad, ending a 50-year family dynasty & raising fears of more instability in a region gripped by war.  While Syria is not a major oil producer, it holds geopolitical clout due to its location & ties with Russia & Iran, & mixed with the tensions elsewhere in the region, the regime change has potential to spill into neighboring territories.  In early signs of disruptions in the oil market, a tanker carrying Iranian oil to Syria turned around in the Red Sea, ship-tracking data showed.  Meanwhile, China will step up "unconventional" counter-cyclical adjustments, focusing on expanding domestic demand & boosting consumption, state media Xinhua reported, citing a readout of a meeting of top Communist Party officials, the Politburo.  China's growth has stalled as a slump in the property market has hit confidence & consumption.  Loosening policy refers to actions by a central bank or gov to boost growth, such as increasing money supply, lowering interest rates & implementing fiscal stimulus.

Oil prices rise as China eyes monetary easing to boost growth

The stocks market slid lower, led by Nvidia (NVDA) shares falling $3.66 amid a Chinese antitrust probe.  Nov inflation is coming later later this week.