MARKET WRAPS
Watch For:
Flash PMI for EU, U.K., France, Germany; EU ECB Executive Board Member Isabel Schnabel speaks at Porto Business School anniversary dinner, ECB accounts of its last monetary policy discussions; U.K. Consumer confidence survey; Germany Deutsche Bundesbank financial stability review; France business sentiment index; trading updates from FirstGroup, Currys, Intertek Group
Opening Call:
Stock futures were broadly lower amid light trading with the U.S. and Japan closed for a holiday. Asian stock benchmarks were mixed; the dollar weakened; while oil futures declined and gold advanced.
Equities:
European stock futures were broadly lower ahead of regional flash PMI data and the U.S. Thanksgiving holiday.
Some investors think beaten-down corners of the market could have room to run, at least in the near term.
“The year-to-date losers, the ones that have not participated nearly as much so far this year, we do think they can continue to perform well into the end of the year,” said Zachary Hill, head of portfolio management at Horizon Investments.
Forex:
The U.S. dollar weakened early Thursday ahead of the U.S. Thanksgiving holiday and in the absence of U.S. economic data for the rest of this week.
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The yen strengthened against most other G-10 and Asian currencies early Thursday.
Japan’s CPI data will likely be in focus on Friday, said Saxo Markets’ APAC Strategy Team.
A higher-than-expected CPI reading would likely spur speculation of a policy tweak by the Bank of Japan and lead to JPY appreciation, the team added.
Bonds:
Investors should be wary of holding U.K. assets such as sterling and gilts as the U.K. policy mix will become more convoluted, Neil Mehta, portfolio manager at RBC BlueBay Asset Management said.
The medium-term growth outlook and fiscal situation remain “very challenging,” he said.
“If polling doesn’t pick up in 1Q next year, we would expect further desperation from the government and unpredictable behavior heading into the full budget in April,” he added.
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The U.S. bond market is closed Thursday for the Thanksgiving holiday and will shut early on Friday.
U.S. Treasury yields finished mixed in choppy trading on Wednesday.
Energy:
Oil futures declined early Thursday after the Organization of the Petroleum Exporting Countries delayed its summit due to be held on Sunday by four days to resolve a disagreement over the production of African nations.
Several members are reportedly unhappy about their production targets for next year, levels which were unveiled in June, ING commodities strategists said.
Bill Weatherburn, commodity analyst at Capital Economics, still expects Saudi Arabia to extend its voluntary production cut into next year but said the rest of the OPEC group is unlikely to lower production.
Metals:
Gold gained in Asia supported by prospects of lower Treasury yields and USD.
Lower yields and USD have been a clear benefit for gold prices, thanks to softer U.S. economic data that has brought forward the case for the Fed’s first rate cut in 2024, Matt Simpson, market analyst at City Index and https://urldefense.com/v3/__http://forex.com__;!!F0Stn7g!DuX09R9NH__3M1RMHwNMQia5Uhpa6AgH4ItFnPMTx89GUuv7VM3Z8h3MuN1yGb0qMIHY9vX6TNeQv7HSw-_qfBSZCslF9EHBhKT9M3MCVTE$ said.
However, with an effective four-day weekend looming in the U.S., gold currently lacks the impetus to break clearly above the $2,000/oz mark, Simpson added.
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Copper prices edged higher after falling overnight.
Softer economic activity in developed countries and geopolitical risks keep the base metal on a weaker footing, ANZ analysts said.
However, as the supply shortage of copper mines continues and demand from the new-energy sector grows, copper prices have more upward momentum in the long term, Huafu Securities said.
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Iron ore prices fell after China regulators said they would step up market oversight.
The joint statement from regulators Thursday came in response to recent sharp rallies in iron ore prices.
The regulators urged companies not to play up price increases or hoard iron ore and asked that they refrain from speculating or manipulating the futures market.
TODAY’S TOP HEADLINES
Why stocks’ Thanksgiving-week performance is important to watch
While the U.S. trading week is shortened by the Thanksgiving holiday, it’s important to watch the stock market’s performance to see if the rally of the past month can be sustained through the year-end.
Stocks have rallied in November so far, with the S&P 500 index SPX logging a 8.6% gain month-to-date, while it’s up 18.6% so far this year, according to FactSet data.
OPEC Delays Summit Over Production Spat
The Organization of the Petroleum Exporting Countries delayed its summit as it tries to resolve a disagreement over the production of African nations, according to delegates.
OPEC and a group of Russia-led allies were set to meet on Sunday to discuss production levels next year but the meeting has now been pushed back by four days, they said.
China Regulators to Step Up Oversight of Iron-Ore Market
Chinese regulators pledged to step up oversight of the nation’s iron-ore market and warned traders not to speculate or hype price increases.
The joint statement from regulators Thursday came in response to recent sharp rallies in iron ore prices.
Colt Makes $1.74 Billion Offer for Vista Outdoor, Gate-crashing Rival Deal
Firearms manufacturer Colt CZ Group has made an unsolicited offer to acquire U.S. -based Vista Outdoor that values its equity at $1.74 billion, seeking to block the latter’s proposed merger with a Czech industrial technology company.
Colt has proposed a cash-and-stock merger with the sporting and outdoor-goods company that would value its shares at $30.00 each, Vista said late Wednesday.
Release of Gaza Hostages Is Delayed Until Friday
A planned release of 50 hostages held in Gaza along with 150 Palestinian prisoners and a pause in fighting has been delayed hours before it was set to begin on Thursday, Israeli, U.S. and regional officials said.
“The start of the release will take place according to the original agreement between the sides, and not before Friday,” Israel’s national security adviser Tzachi Hanegbi said Wednesday. Hanegbi said contacts toward the release of the hostages continued.
Binance Penalties Include a Number of Crypto Industry Firsts
U.S. regulators’ settlement with the largest cryptocurrency exchange marked a new era in its enforcement efforts in the nascent sector.
Some of the penalties imposed on Binance are a first for a cryptocurrency company, with regulators employing powerful measures typically used in the past to rein in major financial institutions.
Bankrupt Crypto Lender Genesis Global Sues to Recover $689.3 Million in Digital Assets
Genesis Global has filed a lawsuit to recover about $689.3 million worth of digital assets that a former business partner withdrew from the cryptocurrency lender before it filed for chapter 11 bankruptcy protection.
The lawsuit said Gemini Trust withdrew the assets on behalf of customers in the crypto exchange’s Earn investment program between mid-October and mid-November 2022, at the “nadir” of the crypto market’s turmoil and in a 90-day window before Genesis’s bankruptcy filing.
Elon Musk’s Social-Media Comments Spark Tesla Investor Backlash
The controversy over Elon Musk’s comments on the social-media platform X reached the board of Tesla this week.
Several prominent Tesla investors are speaking out after Musk, the car maker’s chief executive, last week called an antisemitic post “the actual truth.”
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Expected Major Events for Thursday
07:00/NOR: Sep Monthly GDP
07:00/NOR: Oct Credit Indicator C2
07:00/NOR: Sep Labour force survey SA, incl unemployment
07:00/DEN: Nov Business tendency survey
07:45/FRA: Nov Monthly business survey (goods-producing industries)
08:15/FRA: Nov France Flash PMI
08:30/GER: Nov Germany Flash PMI
08:30/SWE: Swedish repo rate announcement
09:00/EU: Nov Eurozone Flash PMI
09:30/UK: Nov Flash UK PMI
11:00/FRA: 3Q OECD trade statistics release
11:00/TUR: Turkish interest rate decision
11:00/IRL: 3Q Labour Force Survey
13:00/POL: Oct Broad money M3
All times in GMT. Powered by Onclusive and Dow Jones.
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This article is a text version of a Wall Street Journal newsletter published earlier today.
(END) Dow Jones Newswires
November 23, 2023 00:15 ET (05:15 GMT)
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