What's ahead after the year's strongest month? 02/12/2024

HOT stories for today

Stocks on the move:

• MSFT: Wedbush maintains an "Outperform" rating on Microsoft (MSFT), stating that the Federal Trade Commission’s (FTC) antitrust investigation is unlikely to pose significant concerns for investors. Although Microsoft shares dipped roughly 1% in early trading on Friday following news of the probe, the stock has still climbed over 11% year-to-date.
• On Black Friday, Walmart (WMT) shares traded at their highest levels since the company began trading on the New York Stock Exchange in August 1972, closing at $91.88, up 0.62% from the prior day.
• Advance Auto Parts (AAP) saw its stock tumble 7% after Moody’s downgraded its senior unsecured debt to Ba1, a rating below investment grade.
• U.S. semiconductor equipment stocks rallied on reports that the Biden administration might impose less restrictive sanctions on sales of chip equipment and AI memory chips to China than initially proposed. Applied Materials (AMAT) and KLA Corporation (KLAC) each climbed over 3%, while Lam Research (LRCX) surged 5.3%.

Watchlist: AMAT, NVDA, TSLA, MSFT, COIN, HOOD, MRNA
 

Today’s action

• Asia-Pacific markets mainly advanced on Monday as the region began a week filled with key economic reports, focusing on data from nations like Japan, South Korea, and China. Over the weekend, China unveiled its official manufacturing Purchasing Managers' Index (PMI) for November, which climbed to 50.3, the highest since April. This exceeded the 50.2 forecast by economists surveyed by Reuters.
• In the U.S., stock futures remained largely stable in early Monday trading as investors focused on the last month of the year. Dow Jones Industrial Average futures slipped 0.22%, while S&P 500 and Nasdaq 100 futures edged down 0.23% and 0.21%, respectively. Market participants anticipate Monday’s reports on manufacturing and construction spending ahead of highly anticipated labor market data scheduled for later in the week. Additionally, remarks from Federal Reserve Governor Christopher Waller and New York Fed President John Williams are expected to draw interest.

Bitcoin

• Bitcoin (BTC) climbed over 3% to trade at $98,268.10, while MicroStrategy (MSTR), known for its aggressive Bitcoin investment strategy, gained 4%. Ethereum (ETH) saw a more modest increase of over 1%. Despite these gains, both Bitcoin and MicroStrategy are underperforming for the week, with losses of 1% and 5%, respectively. Meanwhile, Ethereum surged nearly 9%, and Coinbase (COIN) added 1.7%. The broader crypto market, tracked by the CoinDesk 20 Index, rose by 6% for the week.
• Robert Kiyosaki, author of Rich Dad Poor Dad, has urged investors to act quickly, warning that Bitcoin’s impending move past $100,000 could price out middle-class investors, leaving the asset accessible mainly to the ultra-wealthy.
  Watchlist: Bitcoin: 90 000-99 590, Ethereum: 3000-3500, Solana: 220-265

Forex

• The EUR/USD pair edged lower toward 1.0530 during Monday’s Asian trading session, pressured by a stronger US Dollar (USD). Eurozone inflation increased to 2.3% year-over-year in November, but a cautious Federal Reserve stance lent support to the USD, acting as a headwind for the Euro. Investors await a speech from European Central Bank (ECB) President Christine Lagarde and the release of the US ISM Manufacturing PMI later in the day, which could influence the pair’s direction.
• Meanwhile, the Japanese Yen (JPY) weakened against the USD, with USD/JPY trading above the mid-150.00s. Rebounding US Treasury yields and a favorable risk sentiment drew flows away from the safe-haven JPY. Strong USD demand, fueled by concerns that potential tariffs from President-elect Donald Trump might increase inflation and lead the Federal Reserve to pause rate cuts, further supported the USD/JPY pair's upward trajectory.
  Watchlist: EUR/USD: 1.0300-1.0650, USD/JPY: 150-157

Basic Materials

• West Texas Intermediate (WTI) crude oil dipped to approximately $68.25 during Monday’s early European session, pressured by a stronger US Dollar (USD). The USD's strength, driven by rebounding Treasury yields, weighed on the USD-denominated commodity. However, improved Chinese economic data and ongoing geopolitical risks may limit WTI's downside. Oil traders are also closely watching the upcoming OPEC+ meeting on Thursday for potential market-moving decisions.
• Gold prices also faced heavy selling pressure on Monday, ending a four-day winning streak. XAU/USD declined to the $2,623–$2,622 range during the Asian session. A robust recovery in USD demand, fueled by concerns that US President-elect Donald Trump’s proposed tariffs could stoke inflation and prompt the Federal Reserve to halt interest rate cuts, drove flows away from gold. The rebound in US Treasury yields further compounded the selling pressure on the non-yielding precious metal.
  Watchlist: GOLD 2530-2790, US Oil: 65.00-73.00

The TEFS Analyst team wishes you a successful day!