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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


Disclaimer: CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.

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