Markets slide with rate cuts and inflation data in focus

Dow dropped 234 (session lows), decliners over advancers about 5-2 & NAZ fell 134.  The MLP index added 1+ to 303 & the REIT index was flat in the 418s.  Junk bond funds hardly budged in price & Treasuries were sold which raised yields.  Oil slid back pennies but remained above 70 & gold dropped a very big 51 to 2705 (more on both below).

Dow Jones Industrials 

Adobe (ADBE) shares tumbled for their steepest drop since Mar after the software vendor issued disappointing revenue guidance.  Sales in the fiscal first qtr will be between $5.63-5.68B, ADBE said in its 4th-qtr earnings report.  Analysts were expecting revenue of $5.73B.  While its forecast trailed estimates, the 4th-qtr results exceeded expectations.  Adjusted EPS came in at $4.81, topping the estimate of $4.66.  Revenue in the 4th qtr increased 11% to $5.61B, beating the estimate of $5.54B.  Monetizing generative artificial intelligence, especially in stand-alone offerings such as Firefly image generation or additional offerings across the Creative Cloud, has been central to ADBE's growth strategy.  Analysts at Deutsche Bank maintained their buy rating but lowered their target price from $650 to $600.  “These results and guidance require a bit of faith in the full year next year,” the analysts wrote. Still, they said,  “We see tangible evidence that Adobe is one of few application software companies in our coverage successfully monetizing generative AI today.”  The stock plummeted 75.80 (13%).

Adobe shares plunge 13% on disappointing revenue guidance

The Consumer Financial Protection Bureau (CFPB) announced the final version of a rule limiting banks' ability to charge overdraft fees.  It says the rule will save American consumers $5B annually.  The regulator said that banks could opt to charge $5 for overdrafts, a steep drop from the average fee of around $35 per transaction, or limit the fee to an amount that covers the lenders' costs, or charge any fee while disclosing the interest rate of the loan.  “For far too long, the largest banks have exploited a legal loophole that has drained billions of dollars from Americans’ deposit accounts,” CFPB Director Rohit Chopra said.  “The CFPB is cracking down on these excessive junk fees and requiring big banks to come clean about the interest rate they’re charging on overdraft loans.”  While overdraft fees have been a lucrative line item for the industry, generating $280B in revenue since 2000 according to the CFPB, banks' revenue from the service has been on the decline.  That's because lenders have either reduced the fees or limited the types of transactions that trigger them, while some banks dropped the fee altogether.  The CFPB rule applies to banks & credit unions with at least $10B in assets.  The effort, part of a flurry of activity from the CFPB in the waning days of the Biden administration, faces stiff opposition from US banking groups that have successfully stymied other efforts from the regulator.  For instance, a rule capping credit card late fees at $8 per incident that was set to take effect in May has been held up in federal court.  The CFPB said its overdraft rule will take effect Oct 1, 2025, though the rule's ultimate fate is unclear.

CFPB announces rule limiting bank overdraft fees

US household wealth rose to a fresh record in the 3rd qtr, fueled by a stock-market rally ahead of the presidential election.  Household net worth increased nearly $4.8T (2.9%) from the prior qtr, to $169T, a Federal Reserve report showed.  The value of Americans' equity holdings rose $3.8T.  The value of real estate eased by almost $200B after sizable advances in the first ½ of the year.  In the 3rd qtr, investors benefited from a stock-market rally in anticipation of interest-rate cuts from the Fed & that Donald Trump would return to the White House next year.  Since his victory in the Nov 5 election, the S&P 500 has climbed to new highs amid expectations that the pres-elect will enact pro-business policies.  Households have been the main driver behind robust economic growth in recent years, as healthy balance sheets & strong wage growth have supported resilient consumer spending.  Economists generally expect a moderation in demand against a backdrop of still-elevated borrowing costs & a higher cost of living.  The Fed's report showed that consumers increased their borrowing at a faster pace last qtr, while business borrowing cooled.  Business debt outstanding increased at a 3% annualized rate, while consumer non-mortgage credit rose at a 2.5% pace.  Mortgage debt climbed 3.1% for a 2nd qtr.  In the public sector, state & local gov debt grew at a slower rate.  Household liquidity picked up to a record.  Deposits held by households & nonprofit organizations, which includes savings & checking accounts & money market funds, rose by $379B to $18.9T.

US household wealth climbs to record on higher stock values

Gold slipped over 1% as investors booked profits after it briefly reached a 5-week high earlier in the session & squared positions ahead of a US Federal Reserve meeting next week.  Spot gold lost 1.2% at $2684 per ounce, while US gold futures settled 1.7% lower at $2709.  Bullion climbed to its highest level since Nov 6 earlier in the session.

Gold slides from 5-week high, down over 1% on profit-taking

Oil prices were little changed in Asian trade as forecasts of weak demand & a higher-than-expected rise in US gasoline & distillate inventories stemmed gains from an additional round of EU sanctions threatening Russian oil flows.  Brent crude futures were up 14¢ at $73.66 a barrel & US West Texas Intermediate crude futures rose 6¢ to $70.35.  Both benchmarks rose over $1 each yesterday.  OPEC cut its demand growth forecasts for 2025 for the 5th straight month yesterday & by the largest amount yet.  Investors will be closely monitoring the IEA's market balance estimates for 2025, which will reflect OPEC's recent announcement.  In the world's top oil consumer, the US, gasoline & distillate inventories rose by more than expected last week, according to data from the Energy Information Administration.  Weak demand, particularly in top importer China & non-OPEC+ supply growth were 2 factors behind the move.  However, investors anticipate a rise in Chinese demand, after Beijing unveiled plans this week to adopt an "appropriately loose" monetary policy in 2025, which could spur oil demand.  Global oil demand rose at a slower-than-expected rate this month, but has remained resilient.

Oil little changed as demand weakness offsets sanctions-driven supply risks

Pres-elect Donald Trump rang the opening bell this morning as stocks edged lower after fresh inflation data cast doubt on investor confidence for the path of interest rates ahead.  The in-line consumer price index reading cleared 1 of the last remaining risks to easing by the Fed in Dec.  That boosted bets on a qtr-point rate cut in Dec to a near 99% chance, per the CME FedWatch tool.  But the Nov producer price index released today came in hotter than expected, rising 0.4% from the previous month.  Economists had been expecting an increase of 0.2% & that has put the chances of the Fed holding rates steady in Jan in focus, as several officials have voiced a cautious stance on policy.

Markets slide after a warm inflation report and tech shares slip lower

Dow crawled up 16. decliners over advancers better than 3-2 & NAZ slid back 37.  The MLP index added 2+ to the 303s & the REIT index rose 3 to the 421s following recent weakness.  Junk bond funds were mixed & Treasuries had a little selling, allowing yields to slip lower.  Oil dropped 1 to the 69s as IEA sees global market ‘comfortably supplied’ next year & gold sank 55 to 2701.

Dow Jones Industrials

A measure of wholesale prices rose more than expected in Nov as questions percolated over whether progress in bringing down inflation has slowed, the Bureau of Labor Statistics (BLS) reported.  The producer price index (PPI) which measures what producers get for their products at the final-demand stage, increased 0.4% for the month, higher than the estimate for 0.2%.  On an annual basis, PPI rose 3%, the biggest advance since Feb 2023.  However, excluding food & energy, core PPI increased 0.2%, meeting the forecast.  Also, subtracting trade services left the PPI increase at just 0.1%.  The year-over-year increase of 3.5% also was the most since Feb 2023.  In other economic news, the Labor Dept reported that first-time claims for unemployment insurance totaled a seasonally adjusted 242K last week, considerably higher than the 220K forecast & up 17K from the prior period.  On the inflation front, the news was mixed.  Final-demand goods prices leaped 0.7% on the month, the biggest move since Feb of this year.  80% of the move came from a 3.1% surge in food prices, according to the BLS.  Within the food category, chicken eggs soared 54.6%, joining an across-the-board acceleration in items such as dry vegetables, fresh fruits & poultry.  Egg prices at the retail level swelled 8.2% on the month & were up 37.5% from a year ago in a separate report yesterday on consumer prices.  Services costs rose 0.2%, pushed higher by a 0.8% increase in trade.

Wholesale prices rose 0.4% in November, more than expected

The economy is doing "exceptionally well" as Pres-elect Donald Trump gets ready to enter the White House, according to Moody's Analytics chief economist Mark Zandi.  Zandi, speaking at the Consumer Federation of America's financial services conference, noted some of the glowing areas: Gross domestic product has been growing at around 3%, productivity & business formation rates are strong & the stock market is up.  "The economy can weather a lot of storms," Zandi added.  But, he added, "I do think there are some potential storms coming" next year under the new administration.  Zandi expects Trump to act quickly on deporting immigrants & implementing tariffs, 2 moves that could have profound impacts on the US economy.  "I believe President Trump is going to do what he said he'll do on the campaign trail," Zandi continued.  "He's going to be quite aggressive in pursuing the policies."  Immigration has played a big role in the economy's strength, Zandi said.  Others agree.  "Recent immigrants have flowed disproportionately into the parts of the labor force that were particularly tight in 2022, contributing to labor supply in places where it was most badly needed," Goldman Sachs analysts wrote in May.

Economy faces 'some potential storms' in 2025, Moody's chief economist says

Americans this holiday season say they are seeing a ghost of Christmas past: inflation.  The CNBC All-America Economic Survey finds inflation is still haunting the buying public, leading to what's shaping up to be just an average season for retailers.  Just 16% of respondents say they will spend more, down 2 points compared to last year & 48% said that they'll lay out the same amount for holiday gifts, up 5 points.  At the same time, 35% say they'll spend less, down 2 points as well.  The survey of 1002 Americans nationwide was conducted Dec 5-8 by Hart Research in conjunction with Public Opinion Strategies, the Rep pollsters for the survey.  It has a margin of error of +/- 3.1%.  When it comes to prices, 64% say they are higher this year compared to last for their holiday gifts, with 34% saying they are much higher.  More than a qtr of participants say they are about the same & just 4% are seeing lower prices.  The result: average spending per person comes in at $1014, about typical for the past several years, but down from a large outlying number of $1308 in 2023.  Older & lower-income Americans & women aged 18-49 are those most likely to say they’ll spend less.  At 36%, inflation tops the list of reasons cited by those spending less.  More than 1 in 5 say it's because they have less income & 20% report it's because they have trouble paying their bills.  In all, 46% of Americans say they have arrived at the holiday season with a some or a lot of debt & they also plan to spend less than most.  Among those spending more are younger Americans aged 18-34, as well as those living in urban counties & Latinos.  Of those who are spending more, 37% say it’s because their incomes are higher, but that's followed by 25% who cite higher prices.  “Inflation is still really on people’s minds,″ said Jay Campbell, partner at Hart Research, who served as the Dem pollster for the survey.  He said the data show, “To the degree inflation has an effect, it is a pushing down spending more than pushing up spending.”  Another factor for shoppers to negotiate this season: Thanksgiving fell on Nov 28, the latest date possible, meaning a shorter season.  The survey found that about ½ of Americans have done less than ½ or none of their shopping when the poll was taken.  A 3rd said they had done none at all.

Only 16% of holiday shoppers plan to spend more this season, CNBC survey shows

Investors received a piece of the inflation puzzle today, an update on wholesale prices, after the latest consumer inflation data invigorated stocks yesterday.  The PPI raised investors' concerns about a rate cut at the Fed's meeting next week.

Markets attempt to advance as Nasdaq tops 20,000 for the first time

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.

Markets wobble after inflation report meets expectations

Dow was off 29, advancers over decliners about 5-4 but NAZ jumped 285.  The MLP index recovered 2+ to 301 & the REIT index fell 2+ to 418.  Junk bond funds eased higher & Treasuries had modest selling which increased yields.  Oil went higher in the 69s as the US reportedly considers oil sanctions on Russia & gold surged 36 to 2754.

Dow Jones Industrials

Inflation ticked higher again in Nov as prices remained stubbornly high for consumers, leaving Federal Reserve policymakers with fresh data to consider ahead of their meeting next week when another interest rate cut may be announced.  The report showed that inflationary pressures in the US economy remain persistent despite progress in bringing inflation closer to the Federal Reserve's 2% target over the past year.  High inflation has created severe financial pressures for most US households, which are forced to pay more for everyday necessities like food and rent.  Price hikes are particularly difficult for lower-income Americans, because they tend to spend more of their already-stretched paycheck on necessities & have less flexibility to save money.  Housing costs accounted for nearly 40% of the headline CPI gain in Nov, as the index for shelter increased 0.3% on a monthly basis.  Shelter prices are up 4.7% from last year.  Energy prices also rose 0.2% in Nov after they were unchanged in the prior month & were down 3.2% from a year ago.  Gasoline prices rose 0.6% on a monthly basis but are down 8.1% from last year.  Electricity costs declined by 0.4% in Nov but are up 3.1% on an annual basis.  Food prices were also higher for the month of Nov, up 0.4% for the month & 2.4% over the last year.  The cost of food at home was up 0.5% on a monthly basis & 1.6% compared with a year ago.  Food away from home rose 0.3% for the month & was up 3.6% from last year.  Prices for meats, poultry, fish & eggs were up 1.7% for the month & 3.8% from a year ago.  Egg prices rose 8.2% in Nov & are up 37.5% from last year due in part to a bird flu outbreak.  Prices for transportation services were flat on a monthly basis but are 7.1% higher than a year ago.  Auto insurance is up 12.7% on an annual basis, though it rose just 0.1% compared with last month.  Motor vehicle repair costs were up 0.5% on the month & are 7.8% higher than last year.  Postage & delivery services are up 9.8% from last year despite a decline of 0.1% in Nov.  Postage costs are up 10.6% while delivery services are up 4.4% on an annual basis.

Inflation rises in November as the Fed weighs another interest rate cut

Mortgage rates fell again last week.  While the drop wasn't huge, it was enough to spur current homeowners to look for some savings.  The surge in refinances was behind a 5.4% increase in total mortgage demand compared with the previous week, according to the Mortgage Bankers Association's (MBA) seasonally adjusted index.  The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766K or less) decreased to 6.67% from 6.69%, with points falling to 0.66 from 0.67 (including the origination fee) for loans with a 20% down payment.  That was the 3rd straight weekly decline.  Applications to refinance a home loan surged 27% week to week & were 42% higher than the same week 1 year ago.  The percentages are large, likely because the base volume is still so small.  Most borrowers today have mortgages with rates well below what is now being offered.  From 2020 through the first ½ of 2022, rates were below 4%.  Mortgage rates last week were 40 basis points lower than they were the same week 1 year ago.  The refinance share of mortgage activity increased to 46.8% of total applications from 38.7% the previous week.  Applications for a mortgage to purchase a home fell 4% for the week & were 4% higher than the same week 1 year ago.  Demand from homebuyers had been gaining over the last several weeks, as more inventory came on the market.  “Purchase applications remained relatively strong and have shown annual gains in all but one week over the past three months. In addition to lower rates, purchase activity continues to be supported by sustained housing demand and inventory that continues to grow gradually in many markets,” wrote Joel Kan, an MBA economist said.  “There’s no question that Wednesday morning’s CPI data is the last significant piece of the puzzle that the Fed will receive before deciding ‘to cut or not to cut’ next week,” wrote Matthew Graham, COO at Mortgage News Daily.  “The market knows this, of course. As such, a big deviation from forecasts would definitely be enough to get things moving.”

Mortgage refinance demand surges 27%, as interest rates drop for the third straight week

Treasury yields fell slightly after Nov's consumer price index data matched expectations.  The 10-year Treasury yield dipped 2 basis points to 4.21% & the 2-year Treasury declined 5 basis points to 4.10%.  Yields & prices have an inverted relationship & 1 basis point is equivalent to 0.01.  Inflation insights above are some of the last key economic data points due to be released before the Fed's monetary policy meeting next week.  The central bank is set to announce its next interest rate decision as well as share guidance about the policy & economic outlook on Dec 18.  Traders increased their bets for a rate cut from the Fed next week, pricing in a near 100% chance for a reduction.

Treasury yields dip as November CPI meets consensus

US stocks mostly rose, 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.  The tech-heavy NAZ jumped as Google parent Alphabet's (GOOG & GOOGL) shares extended gains to hit new record highs.  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.

Markets hesitate as investors wait for key inflation data

Dow fell 154 with selling into the close, decliners over advancers about 3-2 & NAZ went down 49.  The MLP index slid back 2+ to the 299s & the REIT index fell 7+ to the 419s.  Junk bond funds remained weak & Treasuries had limited selling which increased yields slightly.  Oil was even at 68 & gold shot up 31 to 2717 (more on both below).

Dow Jones Industrials 

Boeing (BA), a Dow stock, delivered 13 commercial jets in Nov, less than a qtr of the 56 jetliners it handed over to customers 12 months earlier, the planemaker reported.  Deliveries were down from 14 in Oct, when most of its aircraft production was still shut down during a 7-week-long strike that ended Nov 5.  BA restarted production of its best-selling 737 MAX last week.  The planemaker is trying to increase 737 production to a rate of 38 a month to generate much-needed revenue after it burned Bs of $s in cash during the first 3 qtrs.  However, it has been under heightened oversight by the Federal Aviation Administration since a door plug blew out of a nearly new Alaska Airlines (ALK) 737 MAX 9 during a Jan flight.  The company plans to resume production of its 767, 777 & 777X in Everett “in the days ahead,” BA said.  BA 787 production in South Carolina was not affected by the strike.  BA has said that it is taking a cautious approach to restarting production & has prioritized quality, safety & worker training.  That approach is reflected in the month's lower delivery numbers.  Nov's deliveries included 9-737s, 2-777 freighters & 2-787-9s.  US carrier United Airlines (UAL) took delivery of 3 aircraft, including 2-737 MAXs & 1-787.  By comparison, after BAs last strike ended in Nov 2008, it delivered 4 aircraft that month.  The company booked 49 gross orders during the month with 14 cancellations, including 34 737s & 15 767s for the US Air Force's KC-46 program. Germany-based TUI canceled orders for 14 & will instead lease the planes from BOC Aviation, resulting in a net addition of 20 new 737 MAX orders.  YTD, BA has booked 427 gross orders & 370 net orders after cancellations & conversions.  After also adjusting for accounting standards, BA booked 191 net orders.  BA stock went up 7.11 (5%).

Boeing jet deliveries fall to 13 in November after strike ends

The US reversed its forecast for a crude glut next year & is now calling for a small oil-market deficit.  Global oil consumption should exceed output by 100K barrels a day in 2025, according to a monthly report from the Energy Information Administration (EIA).  That compares with a 300K barrel-a-day surplus forecast last month.  The forecast comes after OPEC & its allies deferred supply increases for 3 months, which the EIA expects will tighten the market.  The US outlook, however, runs counter to that of the Intl Energy Agency (IEA), which last month predicted a 1M barrel-a-day surplus in 2025 despite the OPEC+ decision.  The IEA is due to update its forecast later this week.  The downward revision points to “a market that got too bearish and has since revised away worst-case-scenario outcomes,” said Jon Byrne, analyst at Strategas Securities.  The forecast reversal likely won't have a major impact, since markets have already priced in an OPEC+ production delay, he added.  “We maintain our outlook for a range-bound market in the $65-75 range for WTI,” Byrne said, referring to West Texas Intermediate.  Futures traded just above $68 a barrel today.

US Sees Small Global Oil Deficit in 2025 in Outlook Reversal

Shares of Walgreens (WBA) jumped on a report that the company is in talks to sell itself to private equity firm Sycamore Partners.  WBA Sycamore have been discussing a deal that could be completed early next year.  New York-based Sycamore would likely sell off pieces of WBA's business or work with partners.  WBA, squeezed by the transition out of the Covid pandemic, a leadership shakeup, pharmacy reimbursement headwinds & its wobbly push into health care, has underperformed earnings expectations for 2straight qtrs.  The pharmacy business in particular has been flailing  due to falling reimbursement rates for prescription drugs & several factors pressuring the front of the store, such as inflation & increased competition.  The company is trying to regain its footing with a new CEO, health-care industry veteran Tim Wentworth.  Since stepping into the role in Oct 2023, Wentworth has moved to slash costs at WBA.  In Oct, WBA said it plans to close roughly 1200 of its drugstores over the next 3 years, including 500 in fiscal 2025 alone.  WBA has around 8700 locations in the US, a qtr of which it says are unprofitable.  The company has also scaled back its push into primary care by cutting its stake in primary care provider VillageMD.  WBA stock jumped 1.57 (18%).

Walgreens shares pop on report pharmacy chain could sell itself to PE firm Sycamore

Gold prices hit a 2-week high, underpinned by rising geopolitical tensions & expectations of a 3rd US rate cut by the Federal Reserve next week, while the market's gaze shifted to tomorrow's US inflation data.  Spot gold was up 1.3% at $2692 per ounce & US gold futures settled 1.2% higher at $2718.  The spotlight is moving to the US Consumer Price Index (CPI) tomorrow, which is expected to rise by 0.3% in Nov & the Producer Price Index (PPI) on Thurs, both pivotal in shaping the Fed's rate-cut decisions.  With 2 US rate cuts so far this year, traders predict an 86% chance of a further 25-basis-point cut at the Fed's Dec 17-18 meeting, according to the CME FedWatch tool.

Gold hits two-week high in the run-up to US inflation data

Oil prices fell slightly in trade, losing some ground after pledges of more stimulus in top importer China & heightened geopolitical tensions in Syria sparked strong gains.  Anticipation of more economic signals from China & the US in the coming days also kept traders to the sidelines, as did caution over a monthly report from the OPEC.  Brent oil futures expiring in Feb fell 0.2% to $72.00 a barrel, while West Texas Intermediate crude futures fell 0.2% to $67.96 a barrel. Oil prices rose over 1% yesterday after China's top political body announced a shift towards looser monetary policy & flagged plans for more stimulus measures.  Beijing said it will support stock & property markets while "vigorously" supporting local consumption- its most clear signal yet of more targeted stimulus measures.  The announcement sparked a rally across commodity markets, with oil also benefiting from hopes that an improvement in China's economy will boost its appetite for raw materials.  Beyond China, oil markets are bracing for a string of key economic readings & central bank meetings scheduled for the last few weeks of 2024.  Oil prices saw a higher risk premium this week, after rebel forces ousted Syrian Pres Bashar al-Assad & installed a new regime, ending a 13-year civil war.  Syria's new regime is likely to be backed by groups with ties to the Sunni Islamic sect, putting it at odds with Iran.  This could give the US gov more headroom to impose stricter sanctions against Iran.  Syria's oil production was also eroded by over a decade of civil war, but could pick up under a new regime, increasing global oil supplies.  At its peak, the country produced over 600K barrels of oil per day.

Oil Prices Edge Lower With China Stimulus, Syria Tensions in Focus

US stocks wavered as investors wait for consumer & producer price inflation reports seen as key to the path of interest rates.  Hopes are that Nov inflation readings will provide further evidence of a soft landing for the economy, justifying widespread bets on a Federal Reserve rate cut next week.

Markets are little changed as year-end rally pauses

Dow was flat, decliners modestly ahead of advancers & NAZ went up 40.  The MLP index crawled up 1+ to the 303s & the REIT index was off 3+ to the 422s.  Junk bond funds slid lower & Treasuries saw more selling which drove yields higher (more below).  Oil rose fractionally to 69 & gold gained 29 to 2714.

Dow Jones Industrials

Automakerr Stellantis (STLA) & Chinese battery giant CATL announced plans to jointly build a €4.1B ($4.3B), large-scale lithium iron phosphate (LFP) battery plant in Spain.  The 50-50 joint venture could reach up to 50 gigawatt hours, subject to the evolution of the market for electric vehicles in Europe & requisite gov support.  The facility will be built at STLA's’ Zaragoza site in northeastern Spain & is expected to be up & running by the end of 2026.  Dodge maker STLA said the plant will boost the car giant's “best-in-class” LFP credentials in Europe, enabling the company to make more high-quality & affordable battery-electric passenger cars & SUVs.  It comes at a time when Europe's automakers are facing a perfect storm of challenges on the road to full electrification, including a lack of affordable models, a slower-than-anticipated rollout of charging points & the prospect of targeted US tariffs.  “This important joint venture with our partner CATL will bring innovative battery production to a manufacturing site that is already a leader in clean and renewable energy, helping drive a 360-degree sustainable approach,” Chair John Elkann said & he thanked Spanish authorities for their support.  STLA stock rose 19¢.

Stellantis and China’s CATL team up to build $4.3B EV battery plant

Oracle (ORCL) shares slid after the database software company reported fiscal 2nd-qtr results that fell short of estimates & issued a weaker-than-expected forecast.  2nd-qtr sales grew 9% year over year.  Net income increased 26% to $3.1B ($1.10 a share) from $2.5B (89¢ a share) a year earlier.  Revenue in its cloud services business jumped 12% from a year earlier to $10.8B, accounting for 77% of total revenue.  ORCL's biggest growth engine has been cloud infrastructure as businesses move workloads out of their own data centers.  The business is booming due to soaring demand for computing power that can handle artificial intelligence projects.  Revenue in its cloud infrastructure unit soared 52% from a year earlier to $2.4B.  For the current qtr, ORCL expects revenue growth of 7-9%.  At the midpoint of that range, revenue would be about $14.3B & analysts were expecting sales of $14.6B.  The company said it expects adjusted EPS of $1.50 - $1.54 & analysts were calling for EPS of $1.57.  In Sep, ORCL raised its fiscal 2026 revenue guidance to $66B, which was about $1.5B more than what analysts projected.  During that month, ORCL also announced that its cloud unit would start taking customer orders for computing clusters derived from more than 131K Nvidia (NVDA) “Blackwell” graphics processing units, used for AI model training & related tasks.  ORCL stock fell 14 (7%).

Oracle shares slide on earnings and revenue miss, disappointing forecast

Treasury yields rose as investors awaited fresh inflation data due later this week.  The yield on the 10-year Treasury was up more than 3 basis points to 4.238% & the 2-year Treasury also rose more than 3 basis points to 4.166%.  Yields & prices move in opposite directions & 1 basis point equals 0.01%.  Investors are looking ahead to fresh inflation data, which will be the major economic release this week. The consumer price index for Nov will be published tomorrow & the producer price index for Nov will be published on Thurs.  Headline inflation is expected to have risen 0.3% in Nov & 2.7% over the past year.  Investors are keenly anticipating the CPI as it will be the last reading before the Federal Reserve's Dec 17-18 meeting & it could influence interest rate decisions.

Treasury yields rise as investors await fresh inflation data

Stocks were mixed as investors trod carefully on the eve of a closely watched consumer inflation report seen as key to the path of interest rates.  While stocks are faltering, they are still holding not far off record highs as investors wait for tomorrow's update on consumer prices.  Hopes are that the Nov inflation reading will provide further evidence of a "soft landing" for the economy, justifying widespread bets on a Federal Reserve rate cut in Dec.

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.

Markets slide as Nasdaq leads stocks lower when Nvidia falls

Dow slid 116, advancers over decliners about 5-4 & NAZ retreated 125.  The MLP index was off 1 to the 305s & the REIT index hardly budged in the 426s.  Junk bond funds edged lower & Treasuries were sold which raised yields.  Oil was 1+ higher to the 68s, lifted by fall of Syria’s Assad, & gold jumped 31 to 2691.

Dow Jones Industrials

Nvidia (NVDA) shares were under pressure after a regulator in China said it was investigating the chipmaker over possible violations of the country's antimonopoly law.  The State Administration for Market Regulation opened an investigation into the chipmaker in relation to acquisition of Mellanox & some agreements made during the acquisition, the Chinese gov said.  NVDA acquired the Israeli technology company that creates network solutions for data centers & servers in 2020.   “In recent days, due to Nvidia’s suspected violation of China’s anti-monopoly law and the State Administration for Market Regulation’s restrictive conditions around Nvidia’s acquisition of Mellanox shares ... the State Administration for Market Regulation is opening a probe into Nvidia in accordance with law,” according to a statement.  The news comes as competition heats up between the US & China over chipmaking capabilities, with the Biden administration on Dec 2 announcing a final slew of curbs targeting semiconductor toolmakers  The news could also be a response mounting trade tensions as Pres-elect Trump readies for office in Jan, promising to slap hefty tariffs on foreign goods.  The US has amped up restrictions on chip sales to China in recent years, barring NVDA & other key semiconductor manufacturers from selling their most advanced AI chips in an effort to limit China from strengthening its military.  The company has worked to create new products to sell in China that abide by the US regulations.  The stock dropped 4.79 (3%).

Nvidia shares fall after China opens investigation over possible violation of antimonopoly law

The dramatic toppling of Bashar al-Assad's Syrian regime at the hands of rebel forces this weekend could have far-reaching consequences for the Middle Eastern country, global alliances & markets.  Over the past fortnight, rebel forces led by the Islamist militant group Hayat Tahrir al-Sham carried out a lightning-fast offensive across the country, seizing key cities along the way.  The faction finally claimed the capital Damascus at the weekend, prompting Pres Bashar al-Assad to flee the country & seek refuge in Russia.  The overthrow of Assad was greeted cautiously by Western nations who are wary of the potential for further bloodshed & of a power vacuum in Syria, if a chaotic & contested transition of leadership takes place.  A country driven with 13 years of brutal civil war Syria has seen competing factions, including the terrorist group that styles itself the Islamic State, fight each other as well as Assad's force in recent years, raising the potential for rival power grabs.  For now, however, the fall of the Assad dynasty after over 50 years in power has more immediate global ramifications, with Russia & Iran seen as “losers” from the ousting of the Syrian dictator, while the US, Turkey & Israel are viewed among the main beneficiaries from regime change.  “The rapid collapse of the Assad regime in Damascus will have repercussions well beyond Syria. The great losers are Iran and Russia, without whose support Assad would have lost the almost 14-year civil war long ago,” Holger Schmieding, chief economist at Berenberg Bank, said.  “Iran has likely lost its major route to send weapons to the Hezbollah terror militia in Lebanon. Despite a potential power vacuum in parts of Syria for a while, the Middle East could eventually be a little less unstable as a result,” Schmieding added.  Starting with the US, economists point out that the fall of Assad, & the accompanying weakening of Russia & Iran after the loss of a key ally in the region, will give US Pres-elect Trump & Western powers a welcome boost.  “The new reality is when Donald Trump assumes office on January 20^th 2025 he will be facing a threat board where the opposition looks massively weakened, and how the U.S. holds many of the cards,” market strategist Bill Blain said.  “That doesn’t mean the world is much less dangerous – it’s entirely unclear what kind of new Syria might emerge from Assad’s overthrow – but it feels like power and the global initiative could be shifting back to the West,” he added.

From Trump, to Russia and Iran — Syria’s crisis has huge global consequences

Pres-elect Trump said he will not try to replace Federal Reserve Chair Jerome Powell, whose term runs thru May 2026.  In an interview Trump said, “I don’t,” when asked if he plans to cut short the central bank chief's term.  “The chairman of the Federal Reserve, Jerome Powell, said he will not leave his post even if you ask him to. Will you try to replace Jerome Powell?” was asked during the interview.  “No, I don’t think so. I don’t see it,” Trump replied.  “But, I don’t — I think if I told him to, he would. But if I asked him to, he probably wouldn’t. But if I told him to, he would.”  In the followed up, he was asked: “You don’t have plans to do that right now?”  “No, I don’t,” Trump replied.

Trump says he won’t try to remove Fed chief Jerome Powell

US stocks pulled back as NVDA shares slipped amid a Chinese antitrust probe & as investors prepared for this week's consumer inflation report.  The next test for stocks comes in a consumer inflation report, which will set the stage for the Federal Reserve's final interest rate decision of the year.  The Nov Consumer Price Index on Wed will stress-test the widespread expectation for a qtr-point rate cut on Dec 18 after the latest monthly jobs report failed to shake that conviction.