Market Thanksgiving Tango: In the midst of a three-month high for global shares, the market hesitates, reflecting caution and consolidation. The MSCI All-World index sees a marginal 0.1% dip for a second day, mirroring Wall Street’s decline after Federal Reserve minutes offered little clarity on the future of U.S. interest rates. While the S&P 500 experiences a brief setback, chipmaker Nvidia reports robust revenue, yet faces a 1.7% share drop due to a cautious China sales outlook.
Nasdaq futures and S&P 500 futures exhibit minor declines in European trading, signaling a subdued market environment. The looming Thanksgiving holiday in the United States is likely to keep trading volumes light throughout the week. Fiona Cincotta, City Index market strategist, notes, “We’re just at that moment where the market is consolidating, and particularly ahead of the Thanksgiving holiday, we wouldn’t expect to see any big moves over the coming days.”
The Federal Reserve’s minutes indicate a pledge to “proceed carefully,” prompting little reaction from traders. The absence of confirmation on ruling out more rate hikes leaves the market in a state of cautious optimism. Cincotta remarks, “That’s where we are in the market – broadly speaking, it’s supportive of stocks and broadly speaking, unsupportive for the U.S. dollar.”
While the dollar index edges up 0.25% for a second session, it heads towards its worst monthly performance in a year, marked by a 2.7% drop. In contrast, the MSCI global shares index showcases an 8.2% surge in November, its most substantial monthly rally since late 2020, reaching its highest point since mid-August.
Also Read: Market Quiescence In Thanksgiving: Dollar Weakens, Tech Titans Lead, and Eyes on Black Friday Sales
Ten-year Treasury yields experience a slight dip, standing at 4.41%. This modest decrease follows a 50 basis points drop since the Fed’s decision to hold rates steady earlier in the month. The futures market reflects a strong conviction that the Fed won’t hike rates again, pricing in approximately 90 basis points of rate cuts through 2024, with a 30% chance of cuts beginning as soon as March.
In the currency realm, the dollar, on a recent descent, gains traction from multi-month lows against various currencies. It edges up against the euro at $1.0897 and sees a 0.5% rise against the yen at 149.13 yen. Analysts predict continued strength for the yen and renminbi, driven by bond yield gaps and a moderating U.S. inflation outlook.
Brent crude futures experience a 0.4% fall to $82.17 a barrel, while copper futures decline 0.5% to $8,404 a tonne after reaching a two-month high on Tuesday. Bitcoin shows resilience, rising 2.2% to $36,573, rebounding from a low of $35,651. Binance chief Changpeng Zhao’s resignation and guilty plea contribute to market dynamics, impacting Binance’s token, which rises 5.3% to $237.30 after a significant slide the previous day.
As British Finance Minister Jeremy Hunt unveils the autumn budget, all eyes are on potential tax cuts for businesses and their impact on the UK’s borrowing plans. The pound sees a marginal decline against the dollar and euro. The market’s nuanced movements offer a snapshot of the Thanksgiving pause, combining cautious optimism, consolidation, and a closer look at currency and commodity dynamics.