Market losing steam from election rally 18/11/2024

HOT stories for today

Stocks on the move:

• Shares of Bloom Energy (BE) surged over 51% during the session, reaching a new 52-week high and setting the stock up for its most significant percentage gain on record. The jump followed an upgrade from Piper Sandler, which raised its rating on the renewable energy company from neutral to overweight.
• Global pharma stocks declined after President-elect Donald Trump named vaccine skeptic Robert F. Kennedy Jr. as health secretary. Moderna (MRNA) and Pfizer (PFE) shares dropped nearly 9% and 5%, respectively, while BioNTech (BNTX), Pfizer's Covid vaccine partner, fell 5%.
• Super Micro Computer (SMCI) shares slipped 2% ahead of a crucial Monday deadline, which could result in the server company's delisting from the Nasdaq.
• Alibaba (BABA) shares dropped more than 2% as the Chinese e-commerce giant reported fiscal second-quarter sales below expectations, reflecting weakening consumer demand in China.

Watchlist for today: TSLA, COIN, SMCI, NVDA, BABA, MRNA, MSFT

Markets & today's action:

• Asia-Pacific stocks mostly rose on Monday, starting what ING describes as a "quiet" week for regional economic data. Key highlights include China’s loan prime rate (LPR), which is expected to remain unchanged when released Wednesday. The one-year rate is 3.1%, and the five-year rate is 3.6%. Japan will release trade data on Tuesday and headline inflation figures for October on Friday.
• In the U.S., stock futures were slightly higher on Sunday night as Wall Street gears up for a major earnings week, following a postelection rally that appears to have lost steam. Futures for the Dow Jones Industrial Average dipped slightly by 16 points (-0.1%), while S&P 500 and Nasdaq 100 futures rose 0.1% and 0.2%, respectively.
• The market’s next major focus will be Nvidia’s earnings on Wednesday. Investors will closely watch guidance on demand for its Blackwell AI chips. Earnings reports from Palo Alto Networks and major retailers like Walmart, Target, and Ross are also expected to draw significant attention this week.

Bitcoin

• Has Bitcoin reached its peak? Options and futures markets suggest otherwise. Bitcoin has set record highs, hitting $93,445 on Wednesday before settling around $90,984 on Saturday, marking a 151% increase over the past year. This surge has drawn heightened investor interest and sparked debates about whether the rally is nearing its end.
• According to Luuk Strijers, CEO of crypto derivatives exchange Deribit, data from the options market indicates bullish, solid sentiment, with traders betting on further upside for the cryptocurrency. While some temporary consolidation is possible, many typical signs of market excess are notably absent, suggesting that Bitcoin's upward momentum may still have room to grow.
  Watchlist: Bitcoin: 85 000-95600, Ethereum: 3000-3250, Solana: 200-246

Forex

• The Japanese Yen (JPY) pares back some of its earlier losses against the US Dollar (USD) amid growing speculation that Japanese authorities may step in to stabilize the currency. However, any significant rebound for the Yen appears limited due to lingering uncertainty over the Bank of Japan’s (BoJ) potential rate hikes. Additionally, improved market risk appetite diminishes demand for the Yen as a safe-haven asset.
• On the other hand, the EUR/USD pair hovers near 1.0550 during Monday’s Asian session, close to its yearly low of 1.0496 hit on November 14. The euro faces increased pressure due to cautious statements from Federal Reserve officials and robust US Retail Sales figures, which have reinforced the strength of the US Dollar and intensified downside risks for the pair.
  Watchlist: EUR/USD: 1.0496-1.0600, USD/JPY: 153.8-156.9

Basic Materials

• Gold (XAU/USD) pares back a portion of its modest intraday gains, remaining below the $2,600 threshold as the European session begins Monday. Anticipation surrounding US President-elect Donald Trump's proposed expansionary policies has fueled expectations of higher inflation while simultaneously curbing the likelihood of additional interest rate cuts by the Federal Reserve. This has elevated US Treasury bond yields, creating a challenging environment for non-yielding yellow metal. The generally optimistic risk sentiment in the market also applies downward pressure on gold prices, limiting its appeal as a safe-haven asset. Despite finding support from multiple underlying factors, gold bulls remain cautious amid the persistent strength of US bond yields.  
• Last week, gold experienced its steepest weekly decline since September 2023, retreating to its lowest level in over two months. The decline was mainly due to a strong rally in the US Dollar, which surged to its highest level in more than a year, further weighing on the precious metal.
  Watchlist: GOLD 2536-2650, US Oil: 66.20-70.00

The TEFS Analyst team wishes you a successful day!