Market Uncertainties Could Clear Ahead of Thanksgiving

A daily market update from FS Insight — what you need to know ahead of opening bell

“The most perfect technique is that which is not noticed at all.” — Pablo Casals

Over the Weekend

Biden authorizes Ukraine to use long-range US weapons in Russia CNN

Spirit Air files for bankruptcy following failed JetBlue tie-up BBG

Organic carrots recalled in US after deadly E. coli outbreak BBC

Trump expands search for Treasury secretary FT

Trading assets at US banks cross $1tn for first time since financial crisis FT

Netflix said a record 60 million households worldwide tuned in for Jake Paul versus Mike Tyson fight CNBC

Bullet strikes Southwest Airlines plane without injuries at Dallas airport AP

KKR and Bain’s $4bn takeover battle set to open up M&A in Japan FT

Boeing issues layoff notices to 400-plus workers as it begins drastic cuts AP

Singapore oil trader sentenced to 17 years for ‘cheating’ HSBC over $112mn FT

Netanyahu aide investigated over 7 October document changes BBC

Trump win boosts Ukrainian bonds SEM

Weary Philippines cleans up after Super Typhoon Man-yi becomes fourth major storm to hit in the past fortnight CNN

Watch given to Titanic hero sells for £1.5m BBC

Chart of the Day

Market Uncertainties Could Clear Ahead of Thanksgiving
Overnight
S&P Futures +4 point(s) (+0.1% )
Overnight range: -5 to +19 point(s)
 
APAC
Nikkei -1.09%
Topix -0.73%
China SHCOMP -0.21%
Hang Seng +0.77%
Korea +2.16%
Singapore -0.32%
Australia +0.18%
India -0.34%
Taiwan -0.86%
 
Europe
Stoxx 50 -0.34%
Stoxx 600 -0.19%
FTSE 100 +0.25%
DAX -0.14%
CAC 40 -0.03%
Italy -1.28%
IBEX +0.04%
 
FX
Dollar Index (DXY) -0.0% to 106.68
EUR/USD +0.08% to 1.0548
GBP/USD +0.02% to 1.262
USD/JPY +0.42% to 154.95
USD/CNY +0.2% to 7.2442
USD/CNH +0.16% to 7.2483
USD/CHF -0.05% to 0.8872
USD/CAD flat at 1.409
AUD/USD -0.08% to 0.6457
 
Crypto
BTC +3.05% to 91865.34
ETH +1.88% to 3120.06
XRP +8.33% to 1.1407
Cardano +7.73% to 0.7581
Solana +4.45% to 248.1
Avalanche +2.71% to 35.66
Dogecoin +4.72% to 0.3724
Chainlink +6.84% to 14.58
 
Commodities and Others
VIX +3.47% to 16.7
WTI Crude +0.54% to 67.38
Brent Crude +0.66% to 71.51
Nat Gas +2.27% to 2.89
RBOB Gas +0.76% to 1.964
Heating Oil +1.05% to 2.194
Gold +1.16% to 2592.94
Silver +1.56% to 30.74
Copper +0.48% to 4.084
 
US Treasuries
1M -1.1bps to 4.5479%
3M -1.1bps to 4.48%
6M +0.2bps to 4.4618%
12M -1.6bps to 4.3026%
2Y -0.2bps to 4.3013%
5Y +0.4bps to 4.3104%
7Y +0.8bps to 4.3853%
10Y +1.8bps to 4.4572%
20Y +2.7bps to 4.7485%
30Y +3.1bps to 4.6476%
 
UST Term Structure
2Y-3 M Spread narrowed 0.4bps to -21.2 bps
10Y-2 Y Spread widened 2.0bps to 15.2 bps
30Y-10 Y Spread widened 1.3bps to 18.8 bps
 
Yesterday's Recap
SPX -1.32%
SPX Eq Wt -0.71%
NASDAQ 100 -2.4%
NASDAQ Comp -2.24%
Russell Midcap -0.7%
R2k -1.42%
R1k Value -0.41%
R1k Growth -2.11%
R2k Value -0.94%
R2k Growth -1.88%
FANG+ -2.71%
Semis -3.32%
Software -1.86%
Biotech -5.29%
Regional Banks +0.02% SPX GICS1 Sorted: Utes +1.47%
Fin +0.53%
REITs +0.16%
Energy -0.34%
Indu -0.6%
Materials -0.79%
Cons Staples -0.83%
SPX -1.32%
Cons Disc -1.36%
Comm Srvcs -1.85%
Healthcare -1.88%
Tech -2.49%
 
USD HY OaS
All Sectors +9.9bp to 315bp
All Sectors ex-Energy +10.5bp to 297bp
Cons Disc +6.6bp to 257bp
Indu +13.5bp to 244bp
Tech +13.7bp to 324bp
Comm Srvcs +10.3bp to 516bp
Materials +9.7bp to 295bp
Energy +9.7bp to 300bp
Fin Snr +9.4bp to 277bp
Fin Sub +5.4bp to 194bp
Cons Staples +10.4bp to 297bp
Healthcare +13.0bp to 348bp
Utes +12.6bp to 217bp *
DateTimeDescriptionEstimateLast
11/1810AMNov Homebuilder Sentiment42.043.0
11/184PMSep Net TIC Flowsn/a79.157
11/2110AMOct Existing Home Sales3.943.84
11/2110AMOct Existing Home Sales m/m2.47-1.03
11/229:45AMNov P S&P Manu PMI48.848.5
11/229:45AMNov P S&P Srvcs PMI55.355.0
11/2210AMNov F UMich 1yr Inf Expn/a2.6
11/2210AMNov F UMich Sentiment73.573.0

MORNING INSIGHT

Good morning!

We believe probabilities favor a rally into Thanksgiving, reversing the “slow bleed” lower seen in the past week. There are multiple factors, but the primary driver, in our view, is the clearing of several uncertainties that have acted as overhang.

Click HERE for more.

TECHNICAL

  • QQQ has pulled back to levels that mark support of a trendline extending from August.
  • TSLA looks close to bottoming and should turn back higher towards monthly highs.
  • Copper lies near make-or-break territory and difficult to say that rebounds are imminent.

Click HERE for more.

CRYPTO

Despite CORE’s modest performance relative to BTC in the recent rally, the emergence of a MicroStrategy-like buyer and growing adoption as a BTC scaling solution support maintaining a small position of CORE within one’s portfolio.

Click HERE for more.

First News

Since the days of the Monroe Doctrine, the U.S. has taken a somewhat proprietary view of any and all countries in the Western hemisphere, including Latin America. To be sure, foreign powers have often ignored the doctrine. In the 1800s, Napoleon staked a claim to Mexico, and Britain established territories in Central America. The mid 20th century saw the Soviet Union provoking what we now know as the Cuban Missile Crisis. 

China is testing that doctrine again, and it seems to be doing better than its imperial- and Cold War-era predecessors. Last week, China’s Belt and Road initiative marked a signature accomplishment – the opening of a massive port about 44 miles north of Lima, Peru. The Chancay megaport is arguably the largest deepwater port in South America.

China’s interest in Chancay isn’t just due to trade with Peru – the amount of cargo the port can handle vastly exceeds China’s trade with Peru ($23.16 billion in exports and roughly $12.11 billion in imports). The port is also expected to greatly facilitate China’s trade with South America, allowing cargo to bypass the Long Beach port in Los Angeles. Since 2020, the Middle Kingdom has been the largest trading partner to Central and South America. From there, China imports copper, lithium, iron ore, and petroleum, not to mention agricultural products like soybeans, which for China have increasingly come from Uruguay, Brazil, and Argentina ever since a 2018 U.S.-initiated trade war. In return, China exports large quantities of machinery, textiles, and consumer goods to the region. With this port, and reports that it will help to build rail links from Chancay to Brazil, China is improving its ability to handle another anticipated trade war with the U.S. The port also has security and military implications for the U.S.: some suggest the port is capable of docking Chinese naval vessels, and could also serve as a surveillance point from where it can monitor U.S naval activity

Small wonder, then, that Chinese President Xi Jinping visited Peru for Thursday’s Chancay inauguration, after which he attended the Asia-Pacific Economic Cooperation (APEC) summit. He will then make a state visit to Brazil, while attending the G20 summit in Rio de Janeiro. 

Yet while some countries in South America are wary – if not downright suspicious of – the U.S., there are still fans of U.S. influence. Perhaps the most notable – at least for the incoming Trump administration – is Argentina, which last year elected a big, vocal fan of President Trump in Javier Milei. Though Trump is not due to be inaugurated for another two months, Milei has already visited him at Mar-a-Lago.

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