Daily Market Analysis from ForexMart

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Crisis on the Horizon? Politics and Economics Drown Dow, Nasdaq, Tesla

Profit-Taking Wave: Wall Street Indexes End Day Lower
The key U.S. stock indexes closed lower on Tuesday as investors sought to take profits after the recent rally that began amid the presidential election. Markets are anxiously awaiting fresh U.S. inflation data this week, which could significantly impact future price action.

Post-Election Records: Investors Assess Prospects
Stock indices have been on a tear since the November 5 election, buoyed by new President Donald Trump's promises to cut taxes and loosen business regulations. Market participants have been buying up shares, hoping that these measures will support economic growth and revive the corporate sector.

Inflation Concerns Have Cooled Enthusiasm
However, optimism in the market declined on Tuesday, as investors began to worry that the policies proposed by the Trump administration could trigger a rise in inflation. Amid these concerns, European markets also fell, losing 2%, after statements from the European Central Bank, who warned that higher tariffs from the United States could hurt the global economy.

Tesla and Others Lose Ground After a Jump
Some companies that investors had previously been buying up in anticipation of their rise under the new administration have retreated after reaching peaks. Tesla (TSLA.O) shares fell 6% on Tuesday, despite an impressive 40% gain since the election.

Economic growth is a positive sign, but bonds are under pressure
Karen Karniol-Tambour, co-chief investment officer at Bridgewater Associates, emphasized at the Yahoo Finance Invest conference that despite the risks, U.S. stocks remain attractive assets amid the expected sustainable economic growth in the U.S. She noted that this dynamic is supporting the stock market, although the yield on 10-year Treasury notes has already reached a four-month high, rising amid an expected review of economic policy.

Russell 2000 - from peak to trough
The Russell 2000 small company index (.RUT) fell 1.8%, although on Monday it finished trading at the highest level in the last three years. Meanwhile, rising Treasury yields have added pressure on stocks as bond investors begin to price in the Trump administration's future policies.

Treasuries as a Worry Signal for Stocks
Jack Ablin, chief investment officer at Cresset Capital, described the current situation as a difficult balance, with rising 10-year Treasury yields creating a headwind for the stock rally. "On the one hand, investors are cheering about the stimulus package, but on the other, the bond market is signaling its displeasure," he explained.

Ablin added that tariffs, tax breaks, and immigration restrictions could fuel inflation, something that is not lost on the bond market, which is sensitive to such developments.

Global Impact and Inflation Data Expectations
Ameriprise Financial Chief Economist Russell Price noted that U.S. stocks were also pushed lower by weakness in overseas markets and profit-taking ahead of key U.S. inflation data. The consumer price index is due out on Wednesday, followed by producer price and retail sales data, both of which could shed light on the Federal Reserve's policy outlook.

These data add short-term risks for investors, Price said. "It's likely the anticipation of these numbers that is driving the modest declines we've seen in the markets today," he said.

Wall Street Closes Lower as Major Indexes Slip
The Dow Jones Industrial Average (.DJI) ended the day down 382.15 points, down 0.86% to 43,910.98. The S&P 500 (.SPX) fell 17.36 points, or 0.29%, to close at 5,983.99, while the Nasdaq Composite (.IXIC) lost 17.36 points, or 0.09%, to close at 19,281.40.

Amgen Under Pressure, Sliding Late
The biggest decliner on the Dow was Amgen (AMGN.O), which fell more than 7% amid a sell-off that intensified toward the end of the session. Amgen shares fell after Cantor Fitzgerald said it could cause side effects from its experimental obesity drug MariTide, which showed a 4% drop in bone mineral density.

Materials and Healthcare Down, Communications Gaining
Among the 11 key S&P 500 sectors, Materials (.SPLRCM) saw the biggest decline, falling 1.6%. The second-largest loser was Healthcare (.SPXHC), with Amgen accounting for a significant portion of the losses. In contrast, Communications (.SPLRCL) was in the green, gaining 0.5% on the day.

Fed Focus: Kashkari and Barkin Assess
The markets also took notice of statements from the Federal Reserve. Minneapolis Fed President Neel Kashkari on Tuesday said current U.S. monetary policy remains "moderately restrictive" and is helping to slow inflation and the economy, albeit only slightly. Richmond Fed President Thomas Barkin, meanwhile, said the Fed is prepared to take action if inflation risks intensify or the labor market shows signs of weakening.

Novavax Slips as Revenue Forecast Cuts
Biotech company Novavax (NVAX.O) shares fell 6% after the company announced it was cutting its full-year revenue forecast. The reason was weaker-than-expected sales of its COVID-19 vaccine, which disappointed investors.

Honeywell at its peak: Elliott Investment backs it
Meanwhile, Honeywell (HON.O) shares soared 3.8% to a record high. The rally came as activist investor Elliott Investment increased its stake in the company by more than $5 billion, giving investors confidence in the industrial giant's future growth.

Stocks on the market: More decliners than gainers
Declining stocks were significantly outnumbered on the New York Stock Exchange, with a ratio of 3.48 to 1. Meanwhile, the NYSE recorded 328 new highs and 101 new lows. Declining stocks also outnumbered advancing ones on the Nasdaq, with 3,012 of the 4,336 shares trading down and 1,328 gaining. The S&P 500 posted 55 new 52-week highs and 16 new lows, while the Nasdaq Composite added 193 new highs and 129 new lows.

Volumes on the rise, Asian stocks under pressure
Total trading volume on U.S. exchanges reached 15.29 billion shares, above the 20-session average of 13.17 billion. Meanwhile, Asian stocks also fell on Wednesday, as a sharp rise in U.S. bond yields fueled worries ahead of key inflation data that could impact the Federal Reserve's monetary policy decisions.

Short-term bond yields rise, dollar strengthens
Short-term U.S. Treasury yields rose sharply on Tuesday, hitting their highest since late July. The move also helped the dollar strengthen, hitting a more than three-month high against the Japanese yen as the market reopened after the Veterans Day holiday.

Trump Policy and Inflation Expectations
Since Donald Trump was elected president, rising bond yields have been a clear trend as market participants anticipate that promised tax cuts and tariffs could lead to a larger budget deficit and more government borrowing. Such a scenario, analysts say, would also fuel inflation, making it harder for the Fed to cut interest rates further.

Tug of War: Stocks and Bonds
Against this backdrop, the U.S. stock market enjoyed a record rally, but that optimism quickly turned to caution as bond yields began to rise. Kyle Rodda, senior financial markets analyst at Capital.com, noted that the move remains part of the so-called "Trump trade," which is based on the idea of more deficit spending. "However, as we have seen before, higher risk-off asset rates are starting to put pressure on equity valuations, creating a tug-of-war between the bond and equity markets," he added.

Bitcoin Returns to Record High: Betting on Trump's Crypto-Friendly Policy
Bitcoin is slowly but surely moving towards its all-time high, approaching the $90,000 mark. Its price is currently hovering around $88,195, reflecting market participants' expectations inspired by Trump's promise to turn the US into a global crypto hub. Investors are hoping that possible regulatory easing will give the cryptocurrency a new boost.

China in Focus: Commodity Market Weakening
Meanwhile, global commodities have come under pressure as traders are worried about China's economic outlook, which may have to contend with new trade tariffs from the US. The economic stimulus measures announced by Beijing have not yet inspired confidence in the ability of market participants to quickly recover the largest Asian economy.

Asian Markets Tumble
Asian markets are also down, with Hong Kong's Hang Seng Index (.HSI) down 0.9%, while the mainland China Property Index (.HSMPI) fell 1.3%. Chinese blue chips (.CSI) were unchanged. Japan's Nikkei (.N225) and South Korea's Kospi (.KS11) fell 1.1% and 1.2%, respectively, while Australia's (.AXJO) also fell 1.1%, weighed down by commodity stocks.

US Futures and Bond Yields: Sustained Tension
S&P 500 futures are down 0.1%, continuing their gains after an overnight 0.3% drop. Meanwhile, the yield on two-year Treasury notes hit 4.34%, the first time it has risen to 4.367% since late July. The 10-year yield remains at 4.43%, not far from the four-month high of 4.479% set immediately after Trump's landslide election victory.

Dollar on the cusp: Yen strength raises expectations of intervention
The dollar hit 154.94 yen for the first time since late July before falling back to 154.56 yen. That brings the dollar/yen pair closer to the important 155 yen threshold, which many analysts see as a potential point at which Japanese policymakers could intervene verbally to prevent the yen from weakening further.

Japanese policymakers ready to act
Last week, Atsushi Mimura, head of the Japanese Ministry of Finance's foreign exchange bureau, stressed that Japanese policymakers are prepared to act quickly if there are significant exchange rate movements, raising market expectations of possible intervention.

Dollar Index at Spring Highs
The U.S. dollar index, which tracks the currency against a basket of six major currencies including the yen and the euro, settled at 105.92, just off Tuesday's high of 106.17 — the highest since early May.

Fed Rate Cut Prospects: Chances Dim
The chance that the Federal Reserve will cut rates by a quarter point at its next meeting on Dec. 18 is now 60%, down from 77% a week ago, according to CME Group's FedWatch tool.

The release of U.S. consumer price index (CPI) data later Wednesday could further weigh on those expectations. Economists are forecasting a 0.3% monthly increase in the core measure, which could dampen hopes for a rate cut.

Euro at one-year low
The euro is trading at $1.0625 after slipping overnight to $1.0595, its lowest in 12 months, reflecting the dollar's resilience amid expectations of a stronger US economy.

Europe under attack: Trump's tariffs will impact
As in China, concerns about US trade policy are growing in Europe. Trump said earlier that the EU would "pay a heavy price" for not importing enough US goods, putting the bloc's economy at risk and adding uncertainty to trade relations.

Copper prices fall: Demand weakens
On the London Metal Exchange, copper prices fell 2% to their lowest in two months. The drop reflected weakening demand for the metal, much of which comes from China, where the economy is also under pressure from global tariffs and domestic problems.

Oil remains under pressure: OPEC forecasts are cut
The global oil market is also going through difficult times. On Tuesday, OPEC revised down its forecasts for global oil demand growth, noting the slowdown in the Chinese economy and weakness in some other regions. Against this background, Brent crude futures rose by 0.2%, reaching $72 per barrel, and American WTI also rose by 0.2%, to $68.26, but remained close to monthly lows.

Gold tries to recover
On the precious metals market, gold strengthened slightly, adding 0.4% and reaching a price of about $2,607 per ounce. This small increase was an attempt by the metal to recoup losses after falling to a nearly two-month low in the previous session, caused by the strengthening dollar.
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Gold ends the week with the worst performance in three years

Gold ends the week with a drop, reaching the lowest level in the last three years. The market value of the precious metal has been declining throughout the week and has lost more than 4% of its value. Spot gold is currently trading at $2,561 per ounce.

Experts believe that the decline in the value of gold is due to a strong dollar and expectations of a stricter US monetary policy under Trump. Also, high interest rates make gold less attractive to investors.

Comments by Fed Chairman Jerome Powell, in which he stressed the need for caution in rapidly lowering rates, also affected market sentiment.

Perhaps the price of gold will rise in the future and reach the $ 2,600 mark again, but the coming week will show how the market will be affected by reports on retail sales in the United States and statements by representatives of the Fed.
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Oil is growing amid the aggravation of the geopolitical situation

Oil prices started the week with an increase caused by the aggravation of the geopolitical situation over the weekend. At the same time, concerns about the demand for oil in China, the largest consumer, and forecasts of an abundance of it in the world are holding back price growth.

Brent futures rose 0.34% to $71.67 per barrel, while WTI contracts rose 0.31% to $67.50 per barrel.

The decision of President Biden's administration to allow Ukraine to use American weapons for strikes on Russian territory has become a serious turn in US policy. This event may lead to an increase in the so-called «geopolitical risk premium» in the oil market, as it increases tensions in the world.

A decrease in the capacity of refineries in China and a slowdown in production growth in the country are also causing concern among investors. In addition, uncertainty in global financial markets is related to the pace and scale of interest rate cuts by the US Federal Reserve. In the United States, the number of active oil drilling rigs decreased last week, reaching the lowest level since July.
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Tesla Buzz, Nasdaq Gains, Nvidia Intrigue — Wall Street Events

Nasdaq and S&P 500 Results: Nvidia on the Horizon, Tesla Surprises
The Nasdaq and S&P 500 ended Monday's trading in the "green zone," recouping some of their previous losses. Investors turned their attention to Nvidia's (NVDA.O) earnings call, while Tesla's (TSLA.O) shares rose sharply on expectations of favorable policy changes from the new Trump administration.

Nvidia: AI bets continue
Nvidia is set to report third-quarter financial results on Wednesday, with investors awaiting answers to a key question: whether strong demand for chips is continuing and whether the AI euphoria that has driven growth this year is sustaining the market.

The company, which has accounted for about 20% of the S&P 500's earnings over the past 12 months, is expected to post 25% EPS growth in the third quarter, according to analysts at BofA Global Research. However, Nvidia shares fell 1.3% after reports of new AI chips overheating in server systems.

Expert Comments: Moderate Optimism
"Nvidia is the last of the Magnificent Seven to report quarterly results. While we are seeing revenue and interest pick up, the current level of expectations is not as high as it was a quarter or two ago," said Carol Schleif, chief investment officer at BMO Family Office.

Tesla: Jump on Expectations
Tesla shares have soared, reflecting positive market sentiment about possible policy changes associated with the new administration. Such growth underscores investors' desire to seize opportunities in a rapidly changing environment.

The sentiment around Nvidia and Tesla in the coming days may become an indicator of the future direction of the market, which promises many surprises for traders.

US indices: Nasdaq and S&P 500 in the green, Dow Jones declines
Trading on the US stock market on Monday ended with mixed dynamics of key indices. The Dow Jones Industrial Average (.DJI) lost 55.39 points (-0.13%) to end at 43,389.60. At the same time, the S&P 500 (.SPX) added 23.00 points (+0.39%) to end at 5,893.62, and the Nasdaq Composite (.IXIC) rose 111.69 points (+0.60%) to end at 18,791.81.

Energy and Tesla: Who's Pulling the S&P 500 Up
The energy sector (.SPNY) led the S&P 500, rising 1.05%. Consumer discretionary stocks (.SPLRCD) followed suit, adding 1.04%. Tesla was in the spotlight, with shares jumping 5.6% after Bloomberg's report.

Donald Trump's transition team is reportedly considering loosening regulations on self-driving cars, fueling investor interest.

Meanwhile, industrials (.SPLRCI) were among the laggards, posting the biggest declines among sectors.

CVS Health Gains Strength
In notable corporate news, CVS Health (CVS.N) shares rose 5.4%. The jump was the result of the company announcing it would expand its board by adding four new members as part of a deal with Glenview Capital Management.

Experts Predict Volatility
Carol Schleiff, chief investment officer at BMO Family Office, said, "There could be significant volatility in some sectors right now until we hear more details about the decisions of the new Trump team, which is expected later this month."

Market Takes Stock of the Year
Despite a correction following the sharp post-election rally, sentiment on Wall Street remains positive.

The year 2024 is drawing to a close, demonstrating the resilience of the U.S. stock market, although its future direction will depend on political decisions and new macroeconomic factors.

Stock Market: Holiday Season, Political Uncertainty, and Expectations from the Fed
U.S. stock indexes ended last week with the largest losses in the last two months. Investors are worried about the slowdown in the pace of easing by the Federal Reserve, as well as uncertainty around Donald Trump's appointments to his administration.

Retailers under close scrutiny
The start of the week coincided with an active holiday shopping season, which shifts the market's focus to the largest retail players. Walmart (WMT.N), Lowe's Companies (LOW.N) and Target (TGT.N) are preparing to release their results, which will become an indicator of the state of American consumer demand.

Balance of Power: More Winners on the NYSE
On the New York Stock Exchange, gainers outnumbered decliners 1.71 to 1, with 159 new yearly highs and 88 new yearly lows.

On the Nasdaq, the picture was balanced, with 2,158 gainers and 2,150 decliners. The S&P 500 posted 29 new yearly highs and 13 new yearly lows, while the Nasdaq Composite posted 69 new yearly highs and 265 new yearly lows.

Trading Activity Beats Averages
Trading volume on U.S. exchanges totaled 14.94 billion shares, exceeding the 20-day average of 14.12 billion. This activity indicates that traders are paying close attention to market events.

Global sentiment: Stocks rise, dollar falls
Global markets were positive on Monday, with stocks rising while the US dollar slipped, although it remains close to its yearly peaks. Investors moderated expectations about the Federal Reserve's next move, easing some of the pressure on the currency.

The holiday season is coming, and its outcome is expected to add clarity to the overall picture of the US economy.

Trump appointments and economic uncertainty: focus on key positions
US President-elect Donald Trump is busy building his team, filling important positions in the areas of health care and defense. However, key appointments for financial markets – the Treasury Secretary and the Trade Representative – remain open, adding uncertainty to the outlook.

New policies: taxes and tariffs in focus
The incoming Trump administration is expected to focus on two priorities: tax cuts and higher tariffs. Economists say such measures could trigger higher inflation, limiting the Federal Reserve's ability to cut interest rates.

Bond Yields: A Red Flag?
The U.S. Treasury yield market has seen yields fall amid heightened volatility. The benchmark 10-year note has lost 1 basis point to 4.416%.

"The 10-year yield reflects budget and deficit concerns, and signals underlying inflation risks if new tariffs are imposed," said Wasif Latif, president and chief investment officer at Sarmaya Partners.

Inflation: Back on the Table
The structure and scale of tariffs that the new administration may initiate have inflationary potential, according to Latif. "The bond market is sending a clear signal. The stock market may have paused last week, but today it seems to be riding a wave of optimism again," he said.

Markets: Balancing Expectations and Risks
Investors continue to balance optimism over economic stimulus measures with concerns that new tariffs and rising inflation could complicate the Fed's monetary policy. In the coming weeks, attention will focus on filling key positions and the details of the Trump administration's economic strategy.

European Markets Under Pressure: Real Estate and Utilities in the Red
European stock markets ended the day lower, led by weakness in the real estate and utilities sectors. The pan-European STOXX 600 Index (.STOXX) lost 0.06%, reflecting a cautious investor mood.

Global Markets: Gains on Nvidia Expectations
Sentiment was more positive in global markets, with the MSCI World Index (.MIWD00000PUS), which tracks stocks around the world, rising 0.35% to 845.60. Nvidia (NVDA.O) earnings on Wednesday remain in focus.

Analysts expect strong revenue growth from the company, which continues to dominate the AI chip space. Nvidia shares have nearly tripled this year, becoming a key driver of the S&P 500's record highs.

Dollar and Forex: Strengthening Against the Yen
The U.S. dollar rose 0.29% against the Japanese yen to 154.605. However, the dollar index, which measures the dollar against six major currencies, was down 0.51% at 106.19. Despite the decline, the currency remains close to its one-year high of 107.07, reflecting the overall strength of the U.S. economy.

Oil Market: Prices Rise Sharply
Oil prices have shown a significant strengthening after the news of production suspension at Norway's largest Johan Sverdrup field.

Brent crude futures closed at $73.30 per barrel, up 3.2%. Similarly, WTI crude also gained 3.2%, closing at $69.16 per barrel.

Looking Ahead: What to Expect from Markets
Investors are eagerly awaiting earnings reports from Nvidia and other tech giants, which could set the tone for future market dynamics. The oil sector continues to react to geopolitical events, while currency traders will be watching for cues from the Federal Reserve.

Gold Returns: Prices Rise After a Week of Losses
Gold prices have rebounded after six straight days of declines. Spot gold rose 1.93% to $2,610.73 an ounce, while U.S. gold futures rose 1.7% to $2,614.60. The weakening U.S. dollar was the main driver of the precious metal's gains.

Market Calm: A Pause in News Flow
"Markets should be more stable this week as the flow of macro and policy news from the U.S. slows," said Jim Reed, head of global economics and thematic research at Deutsche Bank. The agenda continues to focus on the appointment of key figures in the new Donald Trump administration.

S&P 500 Forecasts: Growth in Perspective
Goldman Sachs has updated its forecast for the S&P 500 (.SPX), expecting it to reach 6,500 by the end of 2025. This target implies growth of 10.3% from the current value of the index, which closed at 5,893.62.

Morgan Stanley has provided a similar forecast, suggesting that the S&P 500 will reach the same level by the end of next year. The bank bases its expectations on improving corporate earnings, easing of the Federal Reserve interest rate policy in 2024, and a strengthening business cycle.

Market Leaders: The Magnificent Seven Continue to Dominate
Goldman Sachs emphasizes that the key drivers of the index's growth are the companies of the so-called "Magnificent Seven." These are Amazon, Apple, Alphabet, Meta (banned in Russia), Microsoft, Nvidia and Tesla. Experts are confident that these giants will outperform the other 493 companies in the S&P 500 in 2024.

Cautious Optimism
The stabilization of the gold market, optimism about the growth of the stock index and the easing of the Fed policy next year create the basis for favorable conditions. However, markets remain sensitive to any new macroeconomic and political events that could change the current trajectory.

The "Magnificent Seven" continue to lead, but by a narrow margin
The shares of tech giants, known as the "Magnificent Seven", retain their leadership, but their gap with the rest of the S&P 500 index will shrink to 7 percentage points, the smallest in the last seven years, Goldman Sachs concluded in a research note published on Monday.

Macro and Micro: Where are the risks hidden?
"While these companies' strong financial results support their outperformance, the impact of macroeconomic factors such as trade policy and economic growth rates strengthens the position of the other 493 companies in the S&P 500," Goldman analysts emphasized.

The company's forecasts include 11% growth in corporate earnings and a 2.5% increase in real US GDP by 2025.

Tariffs and Bonds: A Double Threat for the Market
Goldman Sachs also warned that the US stock market could face serious risks in 2025. Among them are the possible introduction of new tariffs and rising bond yields, which could put pressure on stocks.

On the other hand, a more accommodative fiscal policy or friendly measures from the Federal Reserve could stimulate further growth.

Economic Policy: Betting on Change
Donald Trump's victory in the US presidential election brought clarity to the key directions of his economic program. Tax cuts and tariff hikes are the main promises that experts believe could accelerate inflation and limit the Fed's room to maneuver with interest rates.

Earnings Outlook: A Realistic View
Goldman expects S&P 500 earnings per share to rise to $268 by 2025. This figure reflects a positive but cautious view of corporate earnings prospects, given possible macroeconomic changes and political risks.

Results: Balancing Growth and Challenges
Investors are closely monitoring market dynamics, trying to find a balance between the opportunities presented by tech giants and the risks associated with changes in economic and trade policies. A difficult road lies ahead, in which it is important to consider both local and global factors.
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The main events by the morning: November 20

The United States will not change its nuclear policy, despite changes in Russian doctrine. According to Bloomberg, a Pentagon spokesman said that the United States has no data indicating that Russia is preparing to use nuclear weapons in Ukraine. The changes in the Russian nuclear doctrine, according to Pentagon officials, did not come as a surprise to Washington.

Biden approved the supply of anti-personnel mines to Ukraine, which are prohibited by an international agreement. The United States made this decision to help Ukrainian troops deter the advance of Russian troops. The shipments include mines that are subject to the prohibitions of the Ottawa Convention, signed by 164 countries, including the United States and Russia.

Japan and China continue to actively sell American government bonds. Japanese investors sold a record $61.9 billion of U.S. bonds in the three months ended September 30, and Chinese funds disposed of $51.3 billion worth of treasuries over the same period. Experts attribute these actions to the expectations of Donald Trump's return to power.

Vladimir Putin will visit India to meet with Prime Minister Narendra Modi. Against this background, Bloomberg noted the failure of US efforts to isolate Russia on the world stage. At the same time, Washington cannot put pressure on India, as it considers it a key ally in the confrontation with China.

Trump may lift sanctions against Russia at the end of the conflict in Ukraine. A representative of the President-elect's transition team commented on the prospect of easing and lifting Washington's sanctions against Moscow, as well as normalizing trade and economic relations between the United States and Russia. He stated that this is «certainly an opportunity if the conflict in Ukraine turns out to be resolved.»
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