CPI data in the spotlight 11/12/2024

HOT stories for today

Stocks on the move:

• General Motors (GM): Shares of GM climbed nearly 3% after the company announced it would cease funding Cruise's robotaxi development. Instead, GM plans to prioritize advanced driver assistance systems and autonomous features in personal vehicles.
• Dave & Buster’s Entertainment (PLAY): The stock dropped 9% following a third-quarter loss of $0.84 per share on $453 million in revenue, falling short of expectations.
• Skillsoft (SKIL): The learning platform’s shares rose 8% after reporting third-quarter revenue of $137.2 million, exceeding the consensus estimate of $130 million and raising its full-year revenue guidance.
• GE Vernova (GE): According to FactSet, the energy equipment company fell 3% after issuing full-year revenue forecasts for 2024 and 2025, which exceeded analysts' expectations.

Today’s action

• Asia-Pacific markets showed mixed performance on Wednesday following declines in major U.S. stock indices ahead of crucial inflation data, which could shape the Federal Reserve’s upcoming interest rate decision. China is reportedly commencing its annual economic work conference on Wednesday, setting the stage for next year’s economic policies and growth targets. Hong Kong’s Hang Seng index opened 0.66% higher, while mainland China’s CSI 300 index remained flat. 
• Meanwhile, U.S. stock futures hovered near unchanged levels early Wednesday as investors awaited the release of inflation data. Futures for the Dow Jones Industrial Average, S&P 500, and Nasdaq 100 increased by 0.09% and 0.14%, respectively. Traders are focused on November’s consumer price index, which is expected to indicate little progress in reducing inflation. While inflation may remain elevated, it will unlikely deter the Federal Reserve from lowering interest rates next week. Additionally, the Bureau of Labor Statistics is set to release the producer price index on Thursday, with a projected 0.2% monthly increase in wholesale prices.

Wahtclist: GM, GOOGL, X, SKIL, PLAY, RCKT, COIN, MSFT

Bitcoin

• Bitcoin's (BTC) price displayed a bearish engulfing pattern on the daily chart for the first time since Oct. 21, retesting its support at $95,000 before declining further. While Bitcoin's long-term market structure remains intact, an analyst highlighted key price levels to monitor in the coming days. One striking observation is the limited accumulated supply below $88,000, with minimal support in this range. The next significant accumulation zone is only visible around $70,000 and lower.
• Cointelegraph reported that total crypto liquidations exceeded $1.6 billion on Dec. 9, marking the largest event of its kind since 2021. This included $142 million in Bitcoin long positions being liquidated. Despite this significant leverage flush, Rafael Schultze-Kraft, co-founder of GlassNode, expressed optimism, noting that Bitcoin remains in "good shape" as long as it holds above $88,000. He emphasized that the $96,000 level is critical, as the $96,000–$98,000 range has been a focal point for investor activity.
  Watchlist: Bitcoin: 90 000-104 000, Ethereum: 3000-4090, Solana: 200-265

Forex

• The Japanese Yen (JPY) edged higher on Wednesday, bolstered by stronger-than-expected Producer Price Index (PPI) data from Japan. However, lingering uncertainty over the Bank of Japan’s (BoJ) potential timeline for raising interest rates kept JPY bulls restrained. The US Dollar (USD) maintained its recent strength, providing support to the USD/JPY pair and limiting its pullback from the near two-week high seen on Tuesday. Market attention remains focused on the upcoming US Consumer Price Index (CPI) data, with November's headline and core inflation expected to rise to 2.7% and 3.3% YoY, respectively.
• The Euro (EUR) also faced headwinds as the EUR/USD pair traded near 1.0530 for a fourth consecutive day. Weighed down by expectations of a 25-basis-point rate cut by the European Central Bank (ECB) on Thursday and broader market caution ahead of the US inflation data, the Euro struggled against a resilient USD.
  Watchlist: EUR/USD: 1.0300-1.0650, USD/JPY: 149-157

Basic Materials

• West Texas Intermediate (WTI), the US crude oil benchmark, trades modestly higher near $68.20 during early Asian session on Wednesday. Despite mild gains, the WTI price remains under pressure due to weak Chinese economic data and an unexpected rise in US crude inventories. API reported a 499K barrel increase last week. However, escalating geopolitical tensions in the Middle East may provide some support and limit further declines.
• Meanwhile, gold price (XAU/USD) retreats from a two-week high reached earlier in the day, struggling to hold intraday gains beyond the $2,700 level. This marks the first negative session in three days, likely driven by cautious positioning ahead of the US Consumer Price Index (CPI) release. Bets on a less dovish Federal Reserve and rising US bond yields bolstered the US Dollar, adding downward pressure on gold. Still, geopolitical risks, trade uncertainties, and potential rate cuts could help cushion losses for XAU/USD.
  Watchlist: GOLD 2530-2790, US Oil: 65.00-73.00

The TEFS Analyst team wishes you a successful day!