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.

Markets ease lower after jobs report is slightly better than expected

Dow dropped 123, decliners over advancers 4-3 & NAZ rose 159.  The MLP index slid 2 to the 307s & the REIT index was off 1 to the 425s.  Junk bond funds inched higher & Treasuries saw a little more buying which reduced yields.  Oil was off 1+ to the low 67s & gold gained 8 to 2656 (more on both below).

Dow Jones Industrials 

Entrepreneurs Elon Musk & Vivek Ramaswamy have an ambitious agenda to cut federal spending with the help of their outside advisory council, the Dept of Government Efficiency (DOGE).  But on their first joint visit to Congress yesterday, the pair also likely saw some of the limits of outside influence on the workings of the legislative branch.  Crisscrossing Capitol Hill together on a marathon day of meetings with lawmakers, Musk & Ramaswamy got warm welcomes from Reps.  Their overall message was popular, too: A smaller federal gov, looser regulations & a private sector approach to the public sector have long been cornerstones of conservative governance.  But there was also an elephant in the rooms they visited: An unspoken understanding that Musk's stated goal of slashing federal spending by $2T is already DOA.  In fiscal 2023, for example, the federal gov spent a total of $6.1T, according to the nonpartisan Congressional Budget Office.  Of that, about $3.8T was already off limits for cuts on day 1, legally obligated to go toward mandatory spending programs like Social Security benefits for retired workers, Medicare coverage & veterans benefits.  After that, roughly $650B was set aside to pay the interest on the national debt.  This left $1.7T for everything else, known as discretionary funding.   $805B of this was spent on national defense, a largely untouchable pot of money.  Finally, the remainder was divided up among the federal departments that perform much of the visible, daily work of gov, agencies like FEMA, NASA & Customs & Border Protection.  While Musk & Ramaswamy went from meeting to meeting, Reps close to the gov funding process, like House Appropriations Committee member Steve Womack said that while some cuts were possible, the $2T that Musk talks about would likely be a bridge too far.  “If you’re going to leave the social safety net programs alone and not touch them, that means you’re going to try to cut hundreds of billions of dollars out of discretionary spending” if you want to achieve massive, DOGE-style reductions, he said.  “It would be very difficult to do that without cutting national security,” said Womack.

DOGE’s Musk, Ramaswamy try to sell Congress on huge spending cuts

Chicago Federal Reserve pres Austan Goolsbee said that economic conditions will determine how fast the Federal Reserve cuts rates from here, but added he hopes the Fed will be homing in on a stopping point by the end of next year.  "I'm hopeful that conditions continue to evolve such that we can get in close to the range" where monetary policy is having a neutral impact on the economy, Goolsbee said.  While he would not specify his estimate of neutral, he said that a level around 3%, well below the current 4.5-4.75% rate & roughly the median that Fed officials projected as a stopping point at their Sep meeting, "doesn't seem crazy to me."  The Fed is expected to cut interest rates by another qtr of a percentage point at its upcoming Dec 17-18 meeting & also update policymakers' projections of where they see the economy and rate policy heading next year.  Goolsbee, who will be a voter on interest rate policy in 2025, laid out his views in an interview, describing an economy that he feels is at or close to full employment & expected to make progress to the Fed's 2% inflation target.  It is a situation where he said the Fed could continue to cut rates at a gradual pace as officials watch the evolution of the economy & settle on a stopping point.  At this point he said it would take an unexpected jump in inflation or a surprise tightening of the job market to push the Fed in a different direction, he added.

Fed's Goolsbee hopes neutral can be in sight by late next year

Consumer sentiment in Dec jumped to its highest level in 8 months.  A closer look at the University of Michigan's consumer sentiment survey shows that how Americans are feeling about the economy depends on their political affiliation.  According to the survey, economic sentiment among self-identified Reps jumped to a reading of 81.6 this month, up from a reading of 69.1 at last check & the highest level since Nov 2020.  Meanwhile, sentiment among Dems tanked to a reading of 70.9 from 81.3 in Nov.  Sentiment among Dems hit its lowest level since Sep 2020.  Sentiment over the last presidential cycle has held firmly along party lines.  The political divide in how Americans are perceiving the economy isn't new, but it could be creating a quandary for the Federal Reserve.  Inflation expectations are a key part of the Fed's calculus on interest rates, with higher anticipated inflation likely pulling forward spending & lower inflation expectations seeing spending delayed.

Economic optimism jumps for Republicans, sinks for Democrats

Gold traded higher as treasury yields fell after the US added more new jobs than expected last month.  Gold for Feb was last seen up $10 to $2658 per ounce.  The Bureau of Labor Statistics reported the country added 227K new jobs last month, above expectations for a rise of 214K & well higher than the unusually low rise of 36K jobs a month earlier.  The unemployment rate rose to 4.2% from 4.1% in Oct.  The data shows the the US labor market remains solid, easing pressure on the Federal Reserve to speed up interest-rate cuts.  The central bank is still widely expected to lower rates by 25 basis points at the Dec 18 end of the bank's policy committee meeting despite comments last month from Fed Chair Jerome Powell suggesting the Fed may slow the pace of cuts.  While Powell didn't give a ringing endorsement of a Dec cut, the bar is high for a skip & would take some big data to really upset the cut.  The $ was higher following the jobs data, with the ICE dollar index last seen up 0.36 points to 106.07.  Treasury yields fell, with the 2-year note last seen paying 4.108%, down 4.2 basis points, while the yield on the 10-year note was down 1.3 points to 4.162%.

Gold Trades Higher as Yields Drop After the U.S. Added More Jobs than Expected in November

Oil prices fell, with weak demand in focus after the OPEC+ group delayed a planned increase in supplies & extended deep production cuts until the end of 2026.  Brent crude futures were down 20¢ at $71.89 a barrel & West Texas Intermediate crude futures were down 14¢ at $68.16 a barrel.  For the week, Brent was fell 1.5%, while WTI inched up 0.2%.  The Organization of the Petroleum Exporting Countries & its allies yesterday delayed the start of oil output increases by 3 months to Apr & extended a full phase-out of production cuts by a year to the end of 2026.  OPEC+ is responsible for about ½ of the world's oil output, had planned to begin winding down production cuts in Oct 2024, but slowing global demand, particularly in China, & rising output elsewhere have forced it to postpone the plan several times.  The outcome of the last OPEC+ meeting surprised everybody.  The extension of the production cuts shows that the group remains united & still aims to keep the oil market balanced.  Contrary to market expectations, UBS expects falling oil inventories this year & a balanced market in 2025 to support higher prices in the coming months.  Brent has largely held within a tight range of $70-75 a barrel in the past month, as investors weigh weak demand signals in China & rising geopolitical risks in the Middle East.

Oil Prices Down Slightly on OPEC+ Supply Cuts

Stocks mostly rose as investors digested the last monthly jobs report of the year, a crucial test of the prospects for interest rate cuts in Dec & beyond.  The daily results of the major gauges also reflected their anticipated weekly performances.  The Dow shed 258 for the week.  Markets were pricing in near-90% odds the Fed lowers rates by a qtr percentage point on Dec 18.

Markets are mixed after a better-than-expected jobs report

Dow slid back 48 after a strong opening, advancers barely above decliners & NAZ was up 122.  The MLP index fell 2 to the 307s & the REIT index edged 1+ lower to the 424s.  Junk bond funds were mixed & Treasuries had limited buying, allowing yields to ease lower (more below).  Oil fell 2 to the 67s on supply worries (more below) & gold gained 11 to 2660.

Dow Jones Industrials

US job growth rebounded in Nov with strong payroll gains after the lackluster Oct jobs report reflected labor disruptions due to hurricanes & union strikes.  The Labor Dept reported that employers added 227K jobs in Nov, beating the prediction.  The unemployment rate ticked higher to 4.2%, up from 4.1% a month ago, also in line with expectations.  The number of jobs added in the prior 2 months were both revised higher, with job creation in Sep revised up by 32K from a gain of 223K to 255K, while Oct was revised up by 24K from a gain of 12K to 36K.  Private sector payrolls added 194K jobs in Nov, just shy of the 200K estimated.  The manufacturing sector saw employment rise by 22K jobs in Nov, including an increase of 32K in transportation equipment manufacturing following the return of workers who were on strike.  That follows a decline of 46K manufacturing jobs in Oct, which the Bureau of Labor Statistics attributed largely to strike activity in the transportation equipment manufacturing sector, as about 33K unionized machinists at Boeing (BA), a Dow stock, were on strike from early Sep to early Nov.  Health care added 53K jobs in Nov, in line with the sector's average monthly gain of 59K over the prior 12 months.  Within the sector, ambulatory health care services added 22K jobs, including 16K jobs in home health care services, while employment also rose in hospitals (+19K) & nursing & residential care facilities (+12K).  Leisure & hospitality employment rose by 53K jobs after it was little changed from the prior month.  That figure is above the average of 21K jobs added per month in the sector over the last 12 months, with most of the gain occurring at food services & drinking places (+29K).  Gov employment rose by 33K jobs, with the growth concentrated in state gov (+20K).  The gov sector's gains were mostly in line with the 12-month average gain of 41K.  The retail sector lost 28K jobs after it showed little net change in employment levels over the past 12 months.  Much of the decline occurred in general merchandise retailers (-15K), while electronics & appliance retailers added 3600 jobs to offset some of the sector's losses.

US job growth beats economists’ expectations after dismal report

Treasury yields traded lower as investors digested key payroll data that kept the door open for another rate cut from the Federal Reserve later this month.  The yield on the 10-year Treasury fell 1 basis point to 4.17% & the 2-year Treasury yield declined less than 5 basis points to 4.1%.  1 basis point is equal to 0.01% & yields & prices move in opposite directions.  Nonfarm payrolls increased by 227K for the month, compared with an upwardly revised 36K in Oct & the estimate for 214K.  The unemployment rate, however, edged higher to 4.2%, as expected.  The unemployment rate rose as the labor force participation rate edged lower & the labor force itself declined.  This report could shape the Federal Reserve's rate decision at its Dec 17-18 policy meeting.  Traders accelerated their bets on a rate cut following the jobs report, with market-implied odds rising above 88% for a qtr percentage point reduction.  Earlier this week, Fed chair Jerome Powell reiterated that the central bank will proceed cautiously with rate cuts, given the strong economy.  “The labor market is better, and the downside risks appear to be less in the labor market. Growth is definitely stronger than we thought, and inflation is coming [out] a little higher. So the good news is that we can afford to be a little more cautious as we try to find neutral,” Powell said.

Treasury yields dip as November jobs report keeps door open for rate cut

The OPEC+ “precautionary” decision to postpone crude production hikes until after the first qtr bides the group time to assess developments in global demand, European growth & the US economy, according to the coalition's chair, Saudi Energy Minister Abdulaziz bin Salman.  Yesterday, the oil producers' alliance agreed to extend several output cuts, with the timeline to start gradually unwinding a 2.2M-barrels-per-day voluntary decline undertaken by a subset of OPEC+ members pushed back by 3 months to Apr.  Several group members are delivering a 2nd voluntary production decline, while the coalition as a whole is also restricting production under its formal policy — both now set to stretch until Dec 31, 2026, rather than the previously penciled end of 2025.  The Saudi energy minister said OPEC+ had to undertake a “reality check” & reconcile supply-demand signals with market sentiment & attend to “the fundamentals, yet put together something that mitigate these negative sentiments within, of course, the contours of what OPEC+ can do.”  OPEC+ faces a spate of variables affecting the supply-demand picture & geopolitical uncertainties, ranging from economic growth amid lowering inflation to conflict in the oil-rich Middle Eastern region & the Jan White House return of Pres-elect Trump — a long-time champion of the US oil industry, who applied protectionist tariffs on China & sanctioned Iran for its nuclear program during his first presidential mandate.

OPEC+ oil output delay a ‘reality check’ as group eyes demand, U.S. outlook, Saudi energy min says

Stocks rose as investors digested the last monthly jobs report of the year, a crucial test of the prospects for interest rate cuts in Dec & beyond.  The report largely matched hopes for a "Goldilocks" reading — strong enough to dampen concerns about the economy but soft enough to keep the Fed's options open on lowering rates this month & into next year.  Markets are pricing in around 91% odds the Fed lowers rates by a qtr percentage point on Dec 18, compared with about 70% before the report.  Meanwhile there is a lot of uncertainty in the oil market.