1. The feverish post-election stock market rally came to a screeching halt last week. For the week, the S&P 500 fell more than 2%, while the Dow Jones Industrial Average shed more than 500 points or nearly 1.3%. The tech-heavy Nasdaq Composite sank over 3%. Two firm inflation readings and commentary from Federal Reserve Chairman Jerome Powell weighed on markets last week, with growing uncertainty over the Fed’s rate path outweighing previous investor excitement over Trump’s potential policy agenda. Since the Federal Reserve slashed its benchmark interest rate by half a percentage point on Sept. 18, bond yields have ripped higher. The 10-year Treasury yield rose by 80 basis points between that date and the days following the election to trade near 4.5%. That move in rates hadn’t been an issue for the stock market rally until last week. On Wednesday of last week, the “core” Consumer Price Index (CPI), which strips out the more volatile costs of food and gas, showed prices increased 3.3% annually for the third consecutive month during October. On Thursday, the “core” Producer Price Index revealed prices increased by 3.1% over last year in October, up from 2.8% the month prior and above economist expectations for a 3% increase. Later on Thursday, Powell said in a speech the Fed doesn’t need to be “in a hurry” to lower interest rates given the strength of the economy. Schwab CEO and chief investment officer Omar Aguilar told the media that Powell’s comments and the Fed debate add uncertainty and “additional volatility and, therefore, the opportunity for investors to take something off the table and take some profits.”
2. Gold prices are solidly higher and hit a two-week high in midday U.S. trading Thursday. More safe-haven demand is featured on geopolitical tension as the Russia-Ukraine war intensifies. Technical buying has also increased this week as the near-term chart posture continues to improve for the yellow metal. December gold was last up $20.50 at $2,672.20. Technically, December gold bulls and bears are back on a level overall near-term technical playing field. A price downtrend on the daily bar chart has been negated. Bulls’ next upside price objective is to produce a close above solid resistance at $2,700.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $2,600.00.
3. Wall Street analysts are quickly scaling back their forecasts for Corporate America’s earnings growth over the next year, which could pump the brakes on the blistering stock market rally before long. A key indicator known as earnings-revision momentum, a gauge of upward-to-downward changes to expected per-share earnings over the next 12 months for the S&P 500 has slumped into negative territory and is hovering near its second-worst reading in the past year. Corporate earnings have been the cornerstone of the stock market’s rally for most of the past decade. A souring outlook on profit growth may dent a further S&P 500 advance after this year’s run made valuations stretched and positioning elevated. Stocks are being “set up for a reversal,” said Gina Martin Adams, chief equity strategist at BI. “The big issue heading into 2025 is whether the Fed will be able to continue easing policy and if earnings momentum will favor laggards outside of Big Tech.” “As we approach the beginning of the new year, you tend to see a bias to more realistic expectations,” said Matt Lloyd, chief investment strategist at Advisors Asset Management. “Combined with Fed comments about not seeing a clear rate-cut path, the headwinds become more realistic.”
4. The number of Americans filing new applications for unemployment benefits unexpectedly fell last week, suggesting that job growth likely rebounded in November after abruptly slowing last month amid hurricanes and strikes. Initial claims for state unemployment benefits dropped 6,000 to a seasonally adjusted 213,000 for the week ended Nov. 16, the Labor Department said on Thursday. The economists polled had forecasted 220,000 claims for the latest week.
5. Crude oil futures on Friday posted a loss for the week, as a looming supply glut and a strong dollar depresses the market. U.S. crude oil lost nearly 5% this week, while Brent has declined nearly 4%. West Texas Intermediate December contract: $67.02 per barrel, down $1.68, or 2.45%. Year to date, U.S. crude oil has shed more than 6%. Brent January contract: $71.04 per barrel, down $1.52, or 2.09%. Year to date, the global benchmark has lost nearly 8%.
6. EUR/USD recovers some of the intraday losses after posting a fresh almost two-year low near 1.0330 in North American trading hours on Friday. Still, the outlook of the major currency pair is vulnerable as the preliminary HCOB Eurozone Purchasing Managers Index (PMI) report for November has shown that the overall business activity surprisingly contracted. The Eurozone Composite PMI declined to 48.1 while economists expected the economic data to manage to remain near the borderline at 50.0. A figure below the 50.0 threshold is considered a contraction in economic activities.
7. USD/JPY is trading a touch lower in the 154.30s on Friday as the Japanese Yen (JPY) strengthens against the U.S. Dollar due to the release of higher-than-expected Japanese macroeconomic data, and Tokyo’s announcement of a $250 billion economic stimulus package. In Japan, bets are increasing that the Bank of Japan (BoJ) will raise interest rates in December, when previously investors had not been so sure.
U.S. single-family homebuilding tumbled in October as Hurricanes Helene and Milton depressed activity in the South and permits rose slightly, suggesting that a rebound was likely to be muted by higher mortgage rates. Single-family housing starts, which account for the bulk of homebuilding, plunged 6.9% to a seasonally adjusted annual rate of 970,000 units last month, the Commerce Department’s Census Bureau said on Tuesday. Data for September was revised higher to show homebuilding rising to a rate of 1.042 million units from the previously reported pace of 1.027 million units. Permits for future construction of single-family housing gained 0.5% to a rate of 968,000 units. New construction has regained ground after taking a beating from a resurgence in mortgage rates during the spring. Momentum has, however, been restricted by new housing supply at levels last seen in 2008, hurricanes in the U.S. Southeast as well as still-elevated borrowing costs. The yield on the benchmark 10-year US Treasury note has risen to a 5-1/2-month high and remains not too far from that level. Mortgage rates track the 10-year note.
Avid coin collectors jumped at the chance to get their hands on a rare $20 “double eagle” gold coin at a Southern California auction house Tuesday afternoon, but only one walked away victorious after paying a hefty price. The gold piece, minted in Carson City, Nevada, in 1870 sold for $1.44 million including the buyer’s premium. Only 3,789 of them were produced and an estimated 40 to 50 remain, according to John Kraljevich, who specializes in coin history at the auction house.
As a follow up to a story we’ve covered, an apologetic FTX co-founder was sentenced Wednesday to no time in prison after a prosecutor and a federal judge praised his cooperation against Sam Bankman-Fried and his efforts to recover money for victims of the cryptocurrency fraud. Gary Wang testified for parts of three-days at Bankman-Fried’s trial last year, explaining his role as FTX’s chief technology officer in a fraud that Judge Lewis A. Kaplan described as one of the two or three biggest in U.S. history. Bankman-Fried, 32, is serving a 25-year prison term for a fraud that misappropriated over $11 billion dollars of funds that belonged to customers, investors and lenders. Given a chance to speak, Wang apologized to customers and investors. “I’m deeply sorry to all the people hurt by my actions. There were so many things I could have done differently.”
Volatility should be expected to remain high as investors will be closely watching for hints on the upcoming monetary policy direction. Many investors have redoubled their efforts to ensure that their portfolios are sufficiently diversified in the hope that they will be able to withstand corrections in multiple market sectors. Many of these investors have included physical precious metals as part of their diversification plans, given their long history as a hedge against both inflation and during times of economic turmoil. Remember, the key to profitability through the ownership of physical precious metals is to own the physical product and hold it for the long term. Always remember that you should never overextend your ability to maintain ownership of your precious metals over the long run.
Trading Department – Precious Metals International Ltd.
Friday to Friday Close (New York Closing Prices)
| Nov. 15, 2024 | Nov. 22, 2024 | Net Change | ||
| Gold | $2,562.95 | $2,706.58 | 143.63 | 5.60% |
| Silver | $30.31 | $31.26 | 0.95 | 3.13% |
| Platinum | $940.73 | $969.84 | 29.11 | 3.09% |
| Palladium | $952.60 | $1,017.10 | 64.50 | 6.77% |
| Dow | 43444.86 | 44296.51 | 851.65 | 1.96% |
Previous Year Comparisons
| Nov. 24, 2023 | Nov. 22, 2024 | Net Change | ||
| Gold | $2,001.11 | $2,706.58 | 705.47 | 35.25% |
| Silver | $24.32 | $31.26 | 6.94 | 28.54% |
| Platinum | $934.54 | $969.84 | 35.30 | 3.78% |
| Palladium | $1,075.12 | $1,017.10 | -58.02 | -5.40% |
| Dow | 35390.15 | 44296.51 | 8906.36 | 25.17% |
Here are your Short-Term Support and Resistance Levels for the upcoming week.
| Gold | Silver | |
| Support | 2645/2570/2510 | 30.49/29.38/28.56 |
| Resistance | 2744/2802/2875 | 31.31/32.42/33.24 |
| Platinum | Palladium | |
| Support | 942/930/921 | 951/931/912 |
| Resistance | 963/971/991 | 971/991/1010 |