Another typical green day in the markets 12/11/2024

HOT stories for today

Stocks on the move:

• AbbVie (ABBV) shares tumbled 12% after the pharmaceutical company reported disappointing results from its experimental schizophrenia drug trials. The drug failed to demonstrate statistically significant symptom improvements during two Phase 2 studies, raising concerns about its prospects.
• Super Micro Computer's (SMCI) stock dropped 8%, continuing its slide since Ernst & Young resigned as the company’s auditor in late October. The resignation, combined with unaudited quarterly results that showed weaker-than-expected revenue, has weighed heavily on investor sentiment.
• Tesla (TSLA) stock gained 7%, building on last week’s 29% rally. Investors remain optimistic that a Trump administration could benefit the electric vehicle giant and CEO Elon Musk, potentially driving further growth for the company.
• Crypto-related stocks also experienced significant gains as Bitcoin’s momentum continued. MARA Holdings surged 30%, remaining 26% below its February peak. Bitcoin miner Cleanspark rose nearly 30% but is still 29% off its March high. MicroStrategy climbed 25.7%, hitting a 52-week high during intraday trading. Coinbase stock jumped 20% and also reached a new high.

Watchlist for today: HD, LYV, SHOP, ONON, TSN, COIN, TSLA, SMCI

Markets & today's action:

• Asia-Pacific markets mostly declined as the U.S. postelection rally failed to inspire regional confidence. Hong Kong’s Hang Seng index dropped 1.96%, while Japan’s Nikkei 225 fell 0.92%, and the Topix hovered near the flatline. Traders in the region are also analyzing key economic reports, including Australia’s business conditions survey and Indonesia’s September retail sales data. Meanwhile, European markets are poised for a lower open as investors await critical inflation data.
• In the U.S., stock futures saw minor losses early Tuesday. Dow Jones Industrial Average futures slipped 57 points (0.13%), with S&P 500 and Nasdaq 100 futures also edging down 0.1%.  Attention now turns to the release of consumer and producer price index reports later this week following the Federal Reserve’s recent interest rate cut. Earnings from Home Depot and Shopify, set for release Tuesday, will also be closely watched.Will inflation data and corporate earnings provide a new catalyst for global markets, or will uncertainty continue to weigh on investor sentiment?

Bitcoin

• Bitcoin approached $90,000 on Monday, climbing 12% to $89,100, after breaching $80,000 the previous day. Many expect it to hit $100,000 by year-end. While optimism over President-elect Donald Trump’s pro-crypto policies has boosted sentiment, analysts point to the April halving as the primary driver. The halving reduced mining rewards from 6.25 BTC to 3.125 BTC, creating a supply squeeze. “There’s not enough supply at current prices to meet demand,” noted an expert, highlighting the need for price increases to balance the market. 
• Bitcoin ETFs, introduced in January, have further intensified demand, with U.S. ETFs purchasing 13,940 BTC on November 11, compared to just 450 BTC mined. Onramp Bitcoin’s Jesse Myers emphasized that post-halving dynamics are the “main story,” mirroring similar surges after past halvings in 2012, 2016, and 2020. 
  Is Bitcoin’s rise sustainable, or are we on the brink of another speculative bubble?
  Watchlist: Bitcoin: 77 000-90 000, Ethereum: 3000-3180, Solana: 200-225

Forex

• The EUR/USD pair extended its losing streak for a third session, dipping near 1.0640 during Tuesday's Asian trading hours. The euro continues to face headwinds as the European Central Bank (ECB) signals it may pursue more aggressive rate cuts than the U.S. Federal Reserve. Adding to the pressure are concerns over the potential negative impacts of fiscal policies expected under U.S. President-elect Donald Trump on the European economy.
• Meanwhile, the Japanese Yen (JPY) staged an intraday recovery, gaining 50-60 pips against the U.S. Dollar and pulling the USD/JPY pair to the mid-153.00 range in recent trading. The recovery comes as speculation grows that Japanese authorities might intervene in the foreign exchange market to support the yen. While this has lent some support to the currency, its gains remain limited by ongoing uncertainty around the Bank of Japan’s potential rate-hike trajectory. As central bank policies diverge and intervention risks loom, will these trends in the forex market persist, or could shifting economic conditions reverse the momentum?
  Watchlist: EUR/USD: 1.0630-1.0800, USD/JPY: 151-155

Basic Materials

• Gold prices (XAU/USD) remain subdued near a one-month low, trading just above $2,600 during Tuesday’s Asian session. The precious metal faces continued pressure as the U.S. Dollar stays strong at a four-month high, fueled by optimism over U.S. President-elect Donald Trump’s proposed expansionary fiscal measures. Elevated U.S. Treasury yields are also weighing on gold’s appeal as a non-yielding asset. Hopes that Trump’s tariffs and corporate tax cuts will drive inflation further bolster bond markets, adding to gold’s downward momentum. With prices teetering near critical support, will a break below $2,600 signal further losses, or could a shift in market dynamics offer some relief for gold?
• West Texas Intermediate (WTI) crude slipped below $70 per barrel on Monday as Hurricane Rafael weakened, reducing the likelihood of disruptions to U.S. oil production in the Gulf of Mexico. Additionally, oil prices faced pressure from subdued market sentiment over Chinese oil demand. According to Reuters, the latest stimulus package announced by China’s ruling party fell short of expectations, dampening trader optimism. When writing, Brent crude traded at $73.30 per barrel, while WTI was at $69.69 per barrel. Could these developments signal continued weakness in oil prices, or will a shift in global demand dynamics provide support?
  Watchlist: GOLD 2600-2700, US Oil: 65.20-73.20

The TEFS Analyst team wishes you a successful day!