On Monday (November 18th), spot gold slightly rose, trading around 2572.87. The gold price may benefit from the escalation of geopolitical tensions during the day. Over the weekend, the US government has allowed Ukraine to use US weapons to attack targets in Russia, which will push up geopolitical tensions and trigger a rebound in market risk aversion; Crude oil trading is around $66.68 per barrel, with weak demand and a possible slowdown in the pace of interest rate cuts by the Federal Reserve, continuing to drag down oil prices. This week's focus is on the G20 summit.

The Dow Jones Industrial Average fell 0.70% last Friday to 43444.99 points; The S&P 500 index fell 1.32% to 5870.62 points; The Nasdaq index fell 2.24% to 18680.12 points.

Key Focus for the Day: Eurozone's September Quarterly Adjustment of Trade Accounts, Bank of Japan Governor Kazuo Ueda's Speech, G20 Summit Held.

equity market

The major stock indexes in the United States closed down last Friday, with the S&P 500 and Nasdaq experiencing their largest daily declines in two weeks. The market is concerned about a slowdown in interest rate cuts, and investors are reacting to the cabinet candidates of US President elect Trump.

Federal Reserve Chairman Powell stated last Thursday that sustained economic growth, a stable job market, and inflation rates above the Fed's 2% target are all reasons why the Fed can think twice about the pace of future interest rate cuts.

According to the FedWatch tool from the Chicago Mercantile Exchange, traders have increased their bets on the Fed remaining inactive at the December meeting, with an estimated probability of about 42%, compared to about 14% a month ago. They also lowered their expectations for a rate cut in 2025.

The economic data released last Friday showed that the growth rate of US retail sales in October was slightly higher than expected, which strengthened the above viewpoint. Import prices have also rebounded, with data released last Wednesday and Thursday showing high inflation. Vaughan Nelson, Deputy Chief Investment Officer Ad

In the past 48 hours, there have been some significant changes, not only from the election aspect, but also from better than expected economic data and Powell's speech about not having to cut interest rates so aggressively. Market expectations for rate cuts have significantly decreased, and the market is readjusting after a fairly bullish response to the US election

Last Friday's sell-off ended last week's trading, during which market focus shifted from Trump's victory in the US election, seen as a pro business choice, to concerns about the path of interest rate cuts and potential inflation risks of the next government policy.

Last week, the S&P 500 index fell 2.08%, the Nasdaq index fell 3.15%, marking the largest weekly decline in over two months, and the Dow Jones Industrial Average fell 1.24% last week. John Augustine, Chief Investment Officer of Huntington National Bank, said that there was a high volume of transactions last Friday. People are taking profits because they have performed well this month. The US stock market has performed well this month. But there was no comprehensive profit taking, he pointed out that the utility sector rose, "indicating more sector rotation

The stocks of vaccine manufacturers and packaged food companies also fell after Trump announced his nomination of Robert F Kennedy Jr. as Secretary of Health and Human Services. The Russell 2000 Index of small cap stocks closed down 1.4%, marking its fourth consecutive trading day of decline. The stocks of defense companies and government contractors also fell, partly due to concerns over the selection of the new head of the government's efficiency department by Trump earlier last week.

Among the 11 major sectors of the S&P 500 index, the information technology sector experienced the largest decline, falling by 2.5%. In addition, the Philadelphia Stock Exchange Semiconductor Index fell sharply by 3.4%, with Applied Materials plummeting by 9.2%, as the US chip manufacturing equipment manufacturer's first quarter revenue forecast was lower than Wall Street's expectations.

Moderna fell 7.3%, Pfizer fell 4.7%, dragging down healthcare stocks to close down 1.88%. The sector fell for the fifth consecutive day, hitting a new low since May during trading. The index of essential consumer goods stocks was also affected by the cabinet nomination news, closing down 0.8%.

The expiration of stock and index options intensified last Friday's volatility, and Brent Kochuba, founder of SpotGamma, said that part of the reason for the weak stock market last Friday was that investors were not adequately prepared for a pullback.

The BOE volatility index, known as the Wall Street "fear index," hit 17.55 early last Friday, the highest since election day on November 5th. However, the index later reduced its gains and closed at 16.14. The ratio of stocks falling to rising on the New York Stock Exchange is 1.89:1, while on the Nasdaq market it is 2.51:1.

13 S&P 500 constituent stocks hit a 52 week high, while 25 hit a new low; 36 Nasdaq index constituent stocks hit a new high, while 285 hit a new low. The cumulative trading volume of various stock exchanges in the United States is 15.47 billion shares, with an average daily trading volume of 13.94 billion shares over the past 20 trading days.

gold market

Gold prices fell slightly last Friday, marking the largest weekly decline in over three years, as expectations of a Fed rate cut cooled and boosted the US dollar, weakening investors' interest in gold. Spot gold fell 0.1% to $2565.49 per ounce. Last week, gold prices fell more than 4% and hit their lowest point since September 12th last Thursday. US futures closed 0.1% lower at $2570.10. The US dollar has recorded its largest weekly increase in over a month, making gold more expensive for holders of other currencies. At the same time, US Treasury yields widened their gains after data showed retail sales growth in the world's largest economy exceeded expectations last month.

Alex Ebkarian, Chief Operating Officer of Allegiance Gold, said, "All uncertainty, especially short-term uncertainty, has been eliminated. Now gold is just returning to fundamentals." Economists believe that President elect Trump's tariff plan will stimulate inflation and may slow down the Federal Reserve's loose interest rate cycle.

As gold is a non yielding asset, rising interest rates will reduce the attractiveness of holding gold. Federal Reserve Chairman Powell stated in his speech last Thursday that the Fed does not need to rush to cut interest rates. According to the CME Fedwatch tool, the market currently believes that the probability of a 25 basis point rate cut in December is 62%, lower than the previous day's 83%.

Spot silver fell 0.4% to $30.32 per ounce; Platinum fell 0.1% to $939.22; Palladium rose 0.7% to $947.77. All three metals recorded weekly declines.

Oil market

Oil prices closed down more than 2% last Friday as investors were concerned about weak demand and a possible slowdown in the pace of interest rate cuts by the Federal Reserve. Brent crude oil futures fell 2.09% to $71.04 per barrel. US crude oil futures closed down 2.45% at $67.02. Last week, Brent crude oil futures fell about 4%, and US crude oil futures fell about 5%.

The data released by the National Bureau of Statistics of China last Friday showed that due to factory closures and a decrease in operating rates of small independent refineries, the crude oil processing volume of Chinese refineries in October decreased by 4.6% compared to the same period last year, increasing market concerns about demand. Due to the main forecasting agencies pointing out a slowdown in global demand growth, oil prices fell last week.

The retail sales growth in the United States in October was slightly higher than expected, indicating a strong start to the fourth quarter economy. The data has intensified the debate among Federal Reserve decision-makers over the pace and magnitude of interest rate cuts, and investors have further lowered their expectations for the Fed to cut interest rates at its December meeting. Lowering interest rates typically stimulates economic growth and fuels demand.

currencies

The US dollar index traded near a one-year high of 107.07 last Friday, rising nearly 1.65% last week and achieving its best weekly performance since September. The market re evaluates its expectations for future interest rate cuts and believes that President elect Trump's policies may trigger inflation. The market expects that the policies of the Trump administration, including tariffs and tax cuts, may stimulate inflation, thereby reducing the room for the Federal Reserve to cut interest rates and benefiting the US dollar.

Federal Reserve Chairman Powell stated last Thursday that the Fed does not need to hastily cut interest rates, prompting traders to abandon more aggressive bets on rate cuts next month and beyond. Last week, the USD/JPY broke through 156 yen for the first time since July and recorded a weekly increase. The US dollar fell 1.4% against the Japanese yen in late trading to 154.145.

The euro closed at $1.054025, having fallen to its lowest level since October 2023 last week and recording its second consecutive week of decline. Thierry Albert Wizman, a global forex and interest rate strategist at Macquarie in New York, said, "The Federal Reserve is the main focus today, and I was a bit surprised by Powell's perceived hawkish rhetoric that the euro is strengthening. People may think that given some issues with the appointment of these (US cabinet) candidates, there will be more chaos next year. Therefore, it is understandable why people have generally lost some confidence in Trump's trades and the theme of US exceptionalism

The data released by the US Department of Commerce last Friday showed that retail sales growth in October was slightly higher than expected, but the potential momentum of consumer spending seemed to slow down at the beginning of the fourth quarter. Boston Fed President Collins also stated in a commentary published in The Wall Street Journal last Friday that the earliest possible pause in interest rate cuts could be at the meeting on December 17-18, depending on upcoming employment and inflation data. According to the FedWatch tool from Zhishang Institute, the probability of a rate cut in December has decreased from nearly 82% a day ago to around 61%.

The pound fell 0.38% to $1.2620 in late trading, down about 2.4% last week, marking the largest weekly decline since January 2023. The market reacted coldly to the UK economic data, which showed an unexpected contraction in the UK economy in September and a slowdown in growth in the third quarter. Marc Chandler, Chief Market Strategist at Bannockburn Global Forex in New York, said, "Today was just a consolidation before the weekend; we haven't broken through any key levels

international news 

Federal Reserve's Barkin believes current policy is tight enough

Federal Reserve's Barkin stated that since the interest rate cut, demand data has shown stronger performance, indicating a positive response from the market to monetary policy adjustments. Barkin regards the inverted yield curve of treasury bond as good news, which may mean that the market's expectation of long-term growth is improving. He believes that the current policy is already tight enough, but it is difficult to accurately determine the specific degree of monetary policy restrictions, suggesting that the Federal Reserve may adjust interest rates based on subsequent data. Barkin mentioned that there have been no reports of large-scale layoffs, indicating that the job market remains stable. He hopes that inflation data for the first quarter of next year can decrease, but at the same time points out that it is difficult to predict the final outcome of tariffs at present. Although Barkin expects core personal consumption expenditures to be at a higher level in the second half of the year, he also sees progress in inflation.

US Secretary of Energy: Biden administration suspends natural gas export permit approval before January 2025

US Energy Secretary Jennifer Granholm has hinted that the Biden administration will not make a decision on any natural gas export permits before the end of this presidential term in late January next year.

Japanese polls show support for Ishibashi cabinet drops to 46%

According to the report of Nihon Keizai Shimbun on the 17th, the latest nationwide poll conducted by the organization and Tokyo Television from the 15th to the 17th of this month showed that the support rate of Ishikawa Cabinet was 46%, down 5 percentage points from the poll results of the organization in early October; The disapproval rate is 46%, an increase of 9 percentage points.

The first confirmed case of monkeypox strain infection in California, USA, which can cause more serious diseases

The Centers for Disease Control and Prevention announced on Saturday that California has confirmed its first case of monkeypox strain infection, which can cause more serious illnesses. The new cases are caused by the "clade I strain", which is different from the "clade II strain" that has been prevalent in the United States since 2022

Trump announces nomination of Chris Wright as the next Secretary of Energy

On Saturday local time, US President elect Trump announced his nomination of Chris Wright as the next Secretary of Energy and stated that he will establish a National Energy Commission to drive energy production in the United States. Trump wrote in a statement on the same day: "Wright has always been a leading technology expert and entrepreneur in the energy field, having worked in nuclear, solar, geothermal, oil, and gas fields. Most importantly, he was one of the pioneers who helped launch the shale oil revolution in the United States, promoting energy independence and changing the global energy market and geopolitical landscape." Note: Wright is the CEO of Liberty Energy, an oilfield services company, and has no previous experience working in Washington.

Fitch Ratings predicts a 3.6% contraction in the Argentine economy

Fitch predicts that Argentina's economy will experience a 3.6% contraction in 2024. This forecast points out the downside risks facing the Argentine economy. The rating agency further predicts that the Argentine economy is expected to achieve 3.9% growth by 2025. This expectation reflects the outlook for the future recovery of the Argentine economy. Fitch emphasized that there is significant uncertainty regarding the expected growth of the Argentine economy, which mainly depends on the effectiveness of its foreign exchange policy. Fitch also mentioned that the improvement in Argentina's foreign exchange dynamics has a self reinforcing characteristic, which enhances market confidence in the ability of the Argentine central bank to maintain exchange rate stability.

Insiders: US government has allowed Ukraine to use US weapons to attack targets in Russia

On November 17 local time, three insiders said that the Biden administration of the United States had lifted restrictions on Ukraine from using weapons provided by the United States to attack targets in Russia, which was a major change in the United States policy in the Russia-Ukraine conflict. Russia has warned that if restrictions on the use of US weapons against Ukraine are relaxed, it will consider this move a "significant escalation". According to sources, Ukraine plans to conduct its first long-range attack in the coming days, which is likely to use the Army Tactical Missile System (ATACMS). It is reported that Ukrainian President Zelensky has been demanding for months that the United States allow the Ukrainian military to use American weapons to strike Russian military targets far from its border.

Domestic news

CCTV: The status of the Yangtze River Delta as a "strong and active growth pole for national development" continues to be highlighted

The "CCTV Finance Yangtze River Delta Economic High Quality Development Index" has been released for the first time. The index for the first three quarters of 2024 was 105.97 points, a year-on-year increase of 5.97%, and the position of the Yangtze River Delta as a "strong and active growth pole for national development" continues to be demonstrated. The total economic output has reached a new level. In the first three quarters, the three provinces and one city in the Yangtze River Delta region achieved a regional GDP of 23.2 trillion yuan, a year-on-year increase of 5.42%, higher than the national average level. The highlights of new kinetic energy are diverse. The total output value of the three leading industries in Shanghai's manufacturing sector increased by 8.6% year-on-year, while the added value of large-scale industries in Jiangsu, Zhejiang, and Anhui provinces increased by 7.9%, 7.8%, and 8.8% respectively. In the first half of the year, the industrial added value of many cities such as Huai'an, Wenzhou, and Shaoxing grew by more than 10% year-on-year.

Director of the Energy Research Institute of the National Development and Reform Commission: Over the next 30 years, the cumulative investment demand will exceed 100 trillion yuan

Lv Wenbin stated that the development of new quality productive forces is a distinctive feature of China's energy transformation. Low carbon, zero carbon, and negative carbon new technologies, equipment, and industries related to energy production and consumption have broad market space and enormous investment opportunities. Taking the demand for energy equipment as an example, the funding demand for wind, solar and other equipment in China will increase from around 2 trillion yuan/year in 2023 to around 6 trillion yuan/year in 2060.

Winter listing difficulties for photovoltaic companies: 15 companies will terminate their IPOs within the year, leaving less than 20 companies in line

Overcapacity and industry losses are causing the photovoltaic industry chain to weather the cold winter. In the downward cycle, the overall profitability of the photovoltaic industry chain has declined, which has become the main reason for the widespread obstacles to IPOs of photovoltaic companies. According to incomplete statistics, at the beginning of last year, nearly 50 photovoltaic industry chain companies were still in line for IPO. So far this year, 15 companies have voluntarily terminated the IPO process, and less than 20 companies are still in line. Compared to the previous wave of photovoltaic companies going public, there have been very few new photovoltaic companies listed since 2023. This year, only three companies in the photovoltaic industry chain have gone public.