A daily market update from FS Insight — what you need to know ahead of opening bell
“Time, for all its smuggling in of new problems, conspicuously cancels others.” — Clara Winston
Overnight
South Korea impeaches acting president, prolonging political upheaval WSJ
Germany’s president dissolves parliament, sets national election for Feb. 23 AP
US holiday retail sales stronger than last year, Mastercard says REU
Dozens dead in airliner crash ‘likely’ caused by Russian air defenses WSJ
Trump’s tariff threats are setting off a global supply chain ‘freakout’ BBG
Wealth of US private capital chiefs boosted by $56bn FT
China ousts two more generals as Xi’s defence purge widens ST
US chief executives are leaving the corner office in record numbers FT
Nippon Steel extends the closing date to acquire U.S. Steel as Biden decides its fate QZ
FTX executives shave serious time off their sentences CNN
China approves world’s largest hydropower dam in Tibet despite public pushback SEM
Former Citigroup chair Richard Parsons dies FT
Bald eagle officially declared US national bird after 250 years BBC
Chart of the Day
| Overnight |
| S&P Futures -24
point(s) (-0.4%
) Overnight range: -25 to +0 point(s) |
| APAC |
| Nikkei +1.8%
Topix +1.26% China SHCOMP +0.06% Hang Seng -0.04% Korea -1.02% Singapore +0.27% Australia +0.5% India +0.27% Taiwan +0.12% |
| Europe |
| Stoxx 50 +0.44%
Stoxx 600 +0.33% FTSE 100 +0.01% DAX +0.25% CAC 40 +0.44% Italy +0.52% IBEX +0.19% |
| FX |
| Dollar Index (DXY) +0.01%
to 108.14 EUR/USD -0.05% to 1.0417 GBP/USD +0.01% to 1.2526 USD/JPY -0.16% to 157.74 USD/CNY +0.02% to 7.2993 USD/CNH +0.03% to 7.3055 USD/CHF +0.17% to 0.9005 USD/CAD -0.03% to 1.4404 AUD/USD -0.19% to 0.6209 |
| Crypto |
| BTC +0.64%
to 96312.32 ETH +1.87% to 3395.62 XRP +1.47% to 2.1933 Cardano +3.88% to 0.8952 Solana +0.5% to 190.31 Avalanche +1.8% to 37.96 Dogecoin +1.88% to 0.3192 Chainlink +2.64% to 23.29 |
| Commodities and Others |
| VIX +4.96%
to 15.46 WTI Crude +0.55% to 70.0 Brent Crude +0.48% to 73.61 Nat Gas +3.5% to 3.85 RBOB Gas +0.5% to 1.956 Heating Oil +0.92% to 2.226 Gold -0.3% to 2625.73 Silver -0.73% to 29.59 Copper flat at 4.072 |
| US Treasuries |
| 1M +0.2bps
to 4.2728% 3M -1.2bps to 4.3072% 6M -1.7bps to 4.2852% 12M -0.6bps to 4.2061% 2Y +0.6bps to 4.3345% 5Y +1.8bps to 4.4507% 7Y +2.3bps to 4.5289% 10Y +2.6bps to 4.6091% 20Y +3.4bps to 4.887% 30Y +3.6bps to 4.8058% |
| UST Term Structure |
| 2Y-3
M Spread widened 1.0bps to -0.4
bps 10Y-2 Y Spread widened 2.2bps to 27.3 bps 30Y-10 Y Spread widened 0.9bps to 19.5 bps |
| Yesterday's Recap |
| SPX -0.04%
SPX Eq Wt +0.16% NASDAQ 100 -0.13% NASDAQ Comp -0.05% Russell Midcap +0.12% R2k +0.9% R1k Value +0.13% R1k Growth -0.15% R2k Value +0.69% R2k Growth +1.1% FANG+ -0.12% Semis -0.18% Software -0.22% Biotech +0.73% Regional Banks +0.48% SPX GICS1 Sorted: Fin +0.21% Healthcare +0.16% REITs +0.14% Tech +0.08% Indu +0.06% Cons Staples +0.03% SPX -0.04% Energy -0.1% Materials -0.18% Utes -0.27% Comm Srvcs -0.36% Cons Disc -0.64% |
| USD HY OaS |
| All Sectors +0.7bp
to 322bp All Sectors ex-Energy +0.7bp to 299bp Cons Disc +0.1bp to 279bp Indu +1.2bp to 239bp Tech +1.7bp to 310bp Comm Srvcs +2.3bp to 505bp Materials +2.9bp to 295bp Energy +0.2bp to 312bp Fin Snr +0.9bp to 281bp Fin Sub +0.4bp to 190bp Cons Staples +0.9bp to 277bp Healthcare -3.8bp to 382bp Utes +0.1bp to 231bp * |
| Date | Time | Description | Estimate | Last |
|---|---|---|---|---|
| 1/2 | 9:45AM | Dec F S&P Manu PMI | 48.3 | 48.3 |
MORNING INSIGHT
Good morning!
Though some are cautious after > 20% gains in back to-back years, we believe this should not be viewed in isolation, and we should also look at the year preceding that – or 2022.
Click HERE for more.
TECHNICAL
- SPX and QQQ have both rallied back to just shy of resistance.
- Charts of Equal-weighted S&P 500 and DJIA remain quite a bit weaker than QQQ, SPX.
- AAPL’s trend quite bullish, but could face resistance between 260-5.
Click HERE for more.
CRYPTO
The stopgap funding bill passed by Congress last Friday has implications for the crypto market, and so does yesterday’s altcoin price action.
Click HERE for more.
First News
Sir Henry Keswick died recently – November 6, 2024 to be exact. He had been managing director of Jardine Matheson, a long-established Hong Kong-based multinational conglomerate with origins dating back to the 1800s, when it was one of the major opium smugglers of the day. The company’s co-founder, William Jardine, played a large part in Hong Kong’s evolution from a fishing village into not just a global center of commerce, but also a major hub for smuggling. It was Jardine who convinced the British government to begin what is now known as the First Opium War, provided the strategy for the invasion, and suggested that the British should demand Hong Kong after China’s defeat – primarily because he knew Hong Kong would be an excellent port from which to base smuggling operations in Asia.
It still is. Smuggling in Hong Kong has evolved into other areas since Jardine’s lifetime – other illicit drugs, fancy French wines, counterfeit goods, cigarettes and cigars, gold – the list goes on and on. And while William Jardine was seeking to circumvent trade restrictions placed by the Dragon Throne of Beijing, modern-day smugglers increasingly see Hong Kong as the key to thwarting the sanctions and mandates imposed by Washington, DC.
Hong Kong has emerged as the center for the illicit trade in Nvidia’s cutting-edge H1000 chips, which are barred from sale to China. A flourishing trade has emerged in which purported customers based in countries Malaysia and Singapore purchase Nvidia chips and then smuggle them into Hong Kong, where Chinese buyers inspect them for purchase before bringing them into mainland China.
The U.S. Treasury Department has also highlighted Hong Kong’s role as a key link in the smuggling of military-grade technology to Russia (imposed after it invaded Ukraine), with multiple Hong Kong-based entities allegedly participating in various schemes to evade U.S. sanctions. In July, a Russian national was sentenced to three years in prison after pleading guilty to his role in another effort in this regard.
The so-called “Fragrant Harbor” is also active in the smuggling of Iranian oil to China. Numerous front companies and various shippers are alleged to be involved in transporting Iranian oil to its end destination in mainland China, and the port of Hong Kong is one of the transit points often used by Iran’s so-called shadow fleet of tankers.
Jardine Matheson has transitioned into a respected multinational conglomerate with a broad range of legitimate business ventures around the world. Hong Kong’s authorities repeatedly note that “smuggling is a serious offense” punishable by law through large fines and up to seven years in prison. But we suspect the late William Jardine would have been pleased to learn that smuggling remains alive and well in Hong Kong, even 181 years after his death. .
P.S. Fans of the author James Clavell (“Shogun“) might enjoy reading about the fictional trading house largely based on Jardine Matheson in Clavell’s novels Tai-Pan and Noble House.
