[Chart courtesy of MarketWatch.com]

1. Moving the market

The markets experienced a slight pullback, likely due to profit-taking after a strong November, during which the S&P 500 climbed over 5%. The Nasdaq suffered the most, partly because Nvidia’s stock fell by more than 3.5%.

The latest Personal Consumption Expenditure (PCE) price index, the Federal Reserve’s preferred inflation gauge, rose 2.8% year-over-year. This is the highest reading since April, indicating that inflation remains a significant concern.

On the economic front, Durable Goods orders increased by 0.2% month-over-month in a preliminary estimate, which is notably lower than October’s 0.5% increase. Continuing Jobless Claims reached 1.9 million, the highest in three years, although initial claims slightly decreased to their lowest level since April.

Weak economic data led to a decline in bond yields, with the 10-year yield dropping to 4.25%, and the 2-year yield nearly erasing its post-election surge. The most shorted stocks saw early gains but lost them later in the session.

In addition to the major indexes, the Mega Cap basket also declined as the dollar fell, though it remained well above its post-election highs.

Gold posted modest gains, crude oil fell for the third consecutive day, but Bitcoin was the standout performer, reversing its recent downtrend to surge past the $97,000 mark again.

The markets will be closed tomorrow, and there will be a shortened session on Friday. I will be taking the rest of the week off and will return on Monday for the next market commentary.

Happy Thanksgiving!

Read More

[Chart courtesy of MarketWatch.com]

1. Moving the market

Despite an early dip, the Dow managed to recover, and all three major indexes maintained the bullish sentiment from the previous day, with the Nasdaq leading the charge. However, Small Caps diverged and closed in the red.

Traders were grappling with the implications of Trump’s announcement of 25% tariffs on products from Mexico and Canada, along with a smaller 10% levy on Chinese goods. There are lingering questions about whether these tariffs will be implemented and, if so, at what stage in the product creation chain they will take effect.

As a result, the dollar rallied, but American automakers Ford and GM suffered sell-offs. The import tariffs are expected to impact not only foreign cars but also domestic ones, due to the importation of several vital parts.

Several macroeconomic data points, such as slowing home price growth, collapsing new home sales, and a contracting manufacturing index, contributed to the drop in the Citi Economic Surprise Index. These factors could not be offset by the post-election improvement in consumer confidence.

The Mega Cap basket surged higher after finally finding some stability, despite slightly rising bond yields. Bitcoin remained in a correction phase, heading down towards $90k, while gold managed to edge higher after yesterday’s sell-off, even in the face of a strong dollar.

Currently, we are in a strong seasonal pattern. According to ZH, since 1950, the S&P 500 has risen 80% of the time between the Tuesday before Thanksgiving and the second trading day of the New Year, with an average gain of 2.6%.

Will history repeat itself?

Read More

[Chart courtesy of MarketWatch.com]

1. Moving the market

This morning, the Dow and S&P 500 surged into record territory following President Trump’s announcement of his Treasury secretary nominee, Scott Bessent.

Traders reacted positively to the news, cheering the nomination of the hedge fund manager, who recently suggested that any tariffs proposed by Trump should be implemented gradually.

Despite the potential peace deal between Israel and Lebanon, the markets experienced significant volatility.

Crude oil, Bitcoin, and gold all declined, while stocks rallied, led by Small Caps, which benefited from a continued short squeeze. However, the Mega Cap basket slipped again, with one trader humorously describing it as a “source of funds for buying other stuff.”

Lower bond yields provided support for the major indexes, with the 2-year yield plunging significantly. The dollar followed gold lower after its recent relentless rise.

The options market indicated a strong bullish sentiment, with 65% of all options traded being calls, reaching a level of optimism not seen since December 2021.

Read More

ETF Tracker StatSheet          

You can view the latest version here.

MAJOR INDEXES RECOVER AS BITCOIN NEARS $100K MILESTONE

[Chart courtesy of MarketWatch.com]

1. Moving the market

The major indexes continued their upward momentum, closing the week with gains and recovering from the previous week’s losses, which had seen the post-election rally lose steam. The markets appear to be stabilizing after absorbing the election aftermath and the much-anticipated Nvidia results, which met but did not exceed expectations.

Earnings reports were mixed: The Gap saw a 7% rise, while Intuit fell by 4%, though neither had a significant impact on the market. Traders are closely watching Bitcoin’s surge as it nears the $100,000 mark, alongside Small Caps, which ended the week with a 3% gain.

According to the latest UMich Sentiment survey, long-term inflation has jumped to its highest level since June 2008, while short-term inflation has dropped to four-year lows. It seems clear to me that inflation will be a persistent issue for the foreseeable future.

The dollar surged to its highest level since September 2022, with Small Caps leading this week’s recovery, supported by a squeeze on the most shorted stocks. The rotation out of tech continued, with Nvidia slipping and the Mega Tech basket erasing most of its post-election gains.

Gold recovered from its recent plunge, posting gains every day this week.

However, the standout performer was Bitcoin, which continued its charge towards $100,000, having gained approximately 45% since just before the election results.

As noted by ZH, if current global liquidity trends continue, Bitcoin could reach $135,000 before encountering significant selling pressure.

Read More