ASX 200 to rise, More sideways trade for S&P 500 + Oil hits 5-month low

ASX 200 futures are trading 27 points higher, up 0.38% as of 8:20 am AEST.

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S&P 500 SESSION CHART

MARKETS

• S&P 500 closed around breakeven in a relatively uneventful session
• Almost a third of the S&P 500 has RSIs over 70, according to Goldman Sachs
• Bond yields continue to grind lower, with the US 2-year close to a 6-month low and 10-year at a 4-month low
• Crude oil fell for a 4th straight session to lowest level since July 7
• Market narratives remains unchanged and focused on disinflation momentum, peak Fed, growing soft landing expectations, a rotation from the Magnificent Seven to laggards (small caps, unprofitable tech and growth), big systematic fund buying and a sizeable swing in sentiment

STOCKS

• Birkenstock and other new IPOs finally close above listing price (Bloomberg)
• Apple supplier Foxconn raises growth outlook (Reuters)
• Nio shares climb on smaller-than-expected Q3 loss (CNBC)
• Albemarle downgraded by Piper Sandler to Underweight, citing a ‘“substantial deterioration” in global lithium markets (CNBC)
• Eli Lilly rolls outs weight-loss drug Zepbound at pharmacies while Wegovy faces shortages (CNBC)

CENTRAL BANKS

• Fed cuts possible in 1Q24 on falling inflation and easing job market (Axios)
• RBA keeps rate on hold but conditions further tightening on data and potential risks (Bloomberg)
• ECB hawk Schnabel softens stance, says hikes are done (Reuters)

GEOPOLITICS

• Israel continues to widen campaign against Hamas (NY Times)
• Israel touts high-tech evacuation plan amid rising Gaza death toll (FT)
• Ukraine expects large risk of losing war if US congress delays aid (Reuters)

CHINA

• China services activity rises to 3-month high (Reuters)
• China seen targeting 'ambitious' 2024 growth target of about 5% (FT)
• Moody's downgrades China's credit rating to "negative" to "stable", cites costs to bail out local government and state firms and control its property crisis would weigh on the economy (AFR)

ECONOMY

• US job openings hit near three year low, well below consensus (Reuters)
• US service sector picks up in November (Reuters)
• BofA says signs US economy is slowing, remains positive in outlook (Bloomberg)
• Japan service activity grows at slowest pace in a year in November (Reuters)
• Tokyo core inflation eases but services inflation hits 29 year high (Bloomberg)
• South Korean inflation slows to 3.3%, more than expected (Bloomberg)
• UK services sector expanding at fastest rate since July (Reuters)
• Eurozone PMI stabilises at weak levels and marks the best print in four months (Reuters)
  
  

Be Careful What You Wish For

US job openings came in at 8.7 million, well below consensus expectations of 9.3 million and down substantially from September 9.5 million. This marked a third straight month of declines and the lowest reading since March 2021.

Sectors that flagged the largest decline in job openings include: Healthcare and Social Assistance (-236,000), Finance and Insurance (-168,000) and Real Estate (-49,000).

The underwhelming jobs data continues to feed into Peak Fed and rate cut hopes. But be a little careful for what you wish for.

The Fakeout

The gold chart went from an epic breakout to all-time highs to an equally epic fakeout in a matter of hours on Monday. The spike occurred during an illiquid time period on Monday morning and may reflect a melting pot of stop loss orders and fresh longs.

Copper also experienced a brief trendline break to a 4-month high before whipping back.