22 November 2024
Daily Navigator
Key highlights
Equities: US equities rose following major technology-sector earnings
US equities edged higher on Thursday as investors shifted focus to potential deregulation under President-elect Trump’s administration. The S&P 500 gained 0.5%, led by major banks and industrial stocks, while the Nasdaq Composite traded flat after Nvidia’s earnings. Nvidia shares fluctuated overnight as strong demand for Blackwell chips was offset by less impressive forward guidance. Meanwhile, the Russell 2000 rose 1.7%, benefiting from expectations that Trump’s protectionist policies will favor domestic businesses. In Asia, equities broadly declined as investors digested mixed earnings from major technology companies. Japan’s Topix index fell 0.6%, dipping below its 100-day moving average, while Hong Kong’s Hang Seng index slipped 0.5%, dragged by losses in the technology and real estate sectors. The next technical support for the Hang Seng is at 19,450.
Bonds/Macro: US leading index dropped; consumer sentiment data in focus
US government bond yields rose on Thursday despite dovish remarks from Fed official John Williams, who suggested more room for inflation to ease toward the Fed’s 2% target and hinted at policy rates moving closer to neutral levels. The 10-year yield climbed to 4.42%, while the 2-year yield increased by 3 basis points to 4.35%. In economic data, US existing home sales rebounded 3.4% m/m in October to 3.96 million units, recovering from a downwardly revised -1.3% in September. Tight inventory drove the median sale price up 4% y/y, with expectations of lower mortgage rates boosting optimism among buyers. However, the Conference Board leading index dropped 0.4% in October, weighed down by weak manufacturing orders and negative yield spreads, signaling potential headwinds for economic growth. Attention now turns to the University of Michigan Sentiment Index, which will provide further insights into consumer confidence later tonight.
FX: USD/JPY fell despite lower Japan inflation
The USD/JPY pair dropped 0.6% on Thursday, even as Japan’s October headline inflation eased from 2.5% to 2.3%, the lowest level since January. Core inflation also dipped slightly, from 2.4% to 2.3%, though it came in slightly above market expectations. The prospect of a potential BoJ rate hike in December continues to support the pair, with technical support at the 200-day moving average of 151.9. The US Dollar Index (DXY) rose 0.3% following a decline in US initial jobless claims, though continuing claims came in higher than expected. Focus now turns to US PMI data due today, which could influence the dollar’s direction. The DXY may pull back from overbought territory and test support at 106.1. The EUR/USD pair fell 0.7%, nearing a yearly low, as the stronger greenback weighed on the euro. Investors are now looking ahead to German GDP and Eurozone PMI data for further direction. The pair remains oversold and is likely to stage a modest rebound toward resistance at 1.0610. XAU/USD rose 0.7%, marking its fourth consecutive day of gains as heightened Russia-Ukraine tensions boosted demand for safe-haven assets. The pair is now poised to retest its previous high at $2,790/oz.
Chart of the day
The Conference Board leading index came in below expectations at -0.4% in October
Yesterday’s market moves
Summary table
Technical charts
Technical charts (cont.)
Technical charts (cont.)
Our 12-month asset class views at a glance
Economic and market calendar
The next support for the Hang Seng index is at 19,450
Technical indicators for key markets as of 21 November close
Market diversity remains healthy across most asset classes
Our proprietary market diversity indicators as of 21 November close
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