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Wall Street extends gains ahead of inflation data, Yen and gold decline

Wall Street Christmas

Macro Scenes:  

  • Big tech under pressure despite broad gains: The US stock markets finished higher to kick off the week, extending six-weekly gains. However, most mega-cap tech shares were lower, suggesting potential funds shift to smaller caps. Notably, the US small-cap index, Russel 2000, rose more than 10% on a monthly basis, outperforming the three major averages.  
  • USD strengthens: The US dollar index continued to climb ahead of the US November CPI data as bond yields jumped following last Friday’s strong job data despite a flat close on Monday.
  • Yen weakened: The Japanese Yen weakened as traders reassessed BOJ’s policy path. According to Bloomberg, the bank may not be in a hurry to terminate its negative interest rate this month. However, it might have to normalize its monetary policy to avoid further weakness of the Yen.
  • Gold fell below 2,000: Gold slumped amid a firmed USD. The precious metal continued to retreat from its all-time high level. The downside momentum may take the spot gold to test further potential support of the 100-day moving average around $1,941 per ounce.
  • Bitcoin retreated: The world’s largest token retreated sharply, down nearly 7% in the last 24 hours. Bitcoin fell to close to 40,000 from the recent high of above 44,000. The selloff was most likely due to technical pullbacks, as a bearish divergence had been formed previously.    
  • Asian markets to open higher: The ASX 200 futures rose 0.26%, the Hang Seng Index futures climbed 0.71%, and Nikkei 225 futures were up 0.98%.

Chart of the Day:

NVIDIA, daily – Nvidia’s shares faced channel resistance, pulling back to test the support at the 50-day moving average of about $455. The selling pressure may take it further to test the lower band of the channel support around $400 per share once it breaks down below the level.

Source: CMC Markets as of 12 December 2023

Company News:    

  • Advanced Micro Devices Inc. (NDX: AMD) rose 4% to a nearly two-year high, extending its surge since the chip maker unveiled MI300 AI chips last week. CEO Lisa Su said the company has won a supply of over US$2 billion worth of AI chips. She forecasted that the AI chip industry could reach over $400 billion in 2027. NVIDIA fell 1.9% at the same time.
  • Macy (NYSE: M) soared 21% after the department store received a buyout offer of $5.8 billion, or $21 per share, from Arkhourse Management and Brigade Captial. The takeover will take the retail shop off the public listing.
  • Signa Corp (NYSE: CI) surged 17% after the healthcare and insurance company abandoned rival Humana’s acquisition offer. The merger would have taken the new corporation to a value of over US$140 billion. However, it may face fierce antitrust scrutiny.  

Today’s Agenda:

  • RBA Governor Michele Bullock speaks
  • Australian Westpac Consumer sentiment for December
  • Japanese PPI for November
  • Chinese New Yuan Loans for November
  • US CPI for November

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