Capex
Even though Nvidia fell more than 2% yesterday, the overall
picture of the stock market showed upward movement. The push upwards is due to
a fall in crude oil after the OPEC+ meeting scheduled for this weekend was
postponed. US Weekly Unemployment Claims Came Out Stronger Than Expected US
economic data was released yesterday ahead of today's Thanksgiving holiday.
Both the weekly unemployment claims figure, which was
published a day earlier, and the University of Michigan consumer sentiment
figure for November were stronger than expected.
The weekly unemployment claims figure was 209K compared to
221K expected. The University of Michigan index showed 61.3 as opposed to the
expected 60.4, although lower than 63.8 the previous month.
The University of Michigan's inflation expectations also
showed no improvement with 1-year expectations rising to 4.5% from 4.2% the
previous month.
In short, these figures do not follow the same line of
slowdown of the economy or decline in inflation as recently published data.
Investors are Keen to See the Result of the Personal
Consumption Expenditure Next Week
The market’s reaction to this data has been minimal, partly
because it has to do with highly volatile economic figures. This kind of data
can vary significantly in subsequent publications. Another reason for this mild
reaction is the fact that the market has already assumed that the Federal
Reserve has reached the end of its interest rate hike cycle. The most important
figure in this sense will be that of the Personal Consumption Expenditure. It
is the inflation data preferred by the Fed and it will be published next week.
Treasury Yields Rebounded and the Stock Market Performed
Well
Treasury yields rebounded slightly yesterday from the
previous day's lows when Fed minutes were released. The minutes showed that Fed
officials were understood to assume an end to rate hikes. The 10-year bond was
trading 3 bps higher at 4.43%. The stock market performed well despite the rise
in market interest rates and the decline of the technology company Nvidia. Even
though the company beat analyst estimates in yesterday's earnings release, it
warned about the weakening of its sales in China. Its stock ended up falling
more than 2%.The Nasdaq index advanced nearly 1% and the S&P500 0.50%. One
of the reasons for this more optimistic sentiment was the drop in the price of
crude oil.
WTI Crude Oil Fell More Than $3 on Rescheduling of OPEC+
Meeting
WTI crude oil fell more than $3 during the session. This
fall came after the announcement that the OPEC+ meeting scheduled for this
weekend was postponed until the end of next week. Some industry analysts
expected an announcement of additional production cuts that would push up the
price of oil. The meeting’s delay is interpreted as a lack of concern on the
part of the producing countries about the current price level. This, together
with an EIA inventory figure published yesterday much higher than expected
(8.7M vs 1.1M), ended up putting downward pressure on the price of crude oil.