Morning Wrap: ASX 200 to fall, S&P 500 caps off 8.9% gain in November + Charts of the Week

ASX 200 futures are trading 9 points lower, down -0.13% as of 8:20 am AEDT.

The S&P 500 marked its best monthly gain since July 2022 while the Dow rallied to a fresh year-to-date high, MSCI's world stock index closed the month up ~9% – Its best performance since November 2020, Tesla is finally delivering its Cybertruck to customers, European inflation falls across the board while GDP growth unexpectedly falls and Charts of the Week (it's short and sweet).

Let's dive in.

S&P 500 SESSION CHART

S&P 500 rallies in the last 30 minutes of trade to close at best levels (Source: TradingView)

MARKETS

• S&P 500 rallies in the last 30 minutes of trade to close at best levels

• US 2-year and 10-year yield bounced off respective July and September lows

• S&P 500 finishes the month up 8.9%, marks seventh best month in history and snaps a three-month losing streak where it fell more than 8.5%

• S&P 500 less than 1% away from year-to-date highs and 5% off all-time highs

• Dow surges to fresh 52-week high and within 3% of all-time highs

• November marks the best month for global stocks (MSCI All-World) in three years

• Rally boosted by sharp drop in global bond yields, easing of financial conditions, peak Fed and goldilocks (soft landing) momentum

• Traders bet on Goldilocks scenario: Lower inflation plus rate cuts (Reuters)

• JPMorgan predicts gloomy 2024 for S&P 500 as economy decelerates (Bloomberg)

• Treasuries tracking for best month since 1980s (Bloomberg)

• Junk bond ETFs see record inflows despite rising default forecasts (Bloomberg)

• European real estate stocks set to have best month since 2009 (Bloomberg)

• OPEC+ agreed to an additional 1m bpd plus an extension of the Saudi 1m bpd voluntary cut to shore up markets (Bloomberg)

STOCKS

• Salesforce upgrades guidance on cloud demand, focus on cost control (Reuters)

• Occidental Petroleum in talks to acquire CrownRock (Reuters)

• TD Bank to cut ~3,000 jobs or 3% of workforce after quarterly profit miss (Reuters)

• Tesla begins Cybertruck deliveries (Fox Business)

CENTRAL BANKS

• More Fed officials make case for leaving rates unchanged, with option of hiking further if inflation remains high (Bloomberg)

• Fed Waller says monetary policy is the most restrictive in 25 years and expects the Fed to maintain a restrictive stance for some time (Bloomberg)

• Traders fully price in ECB rate cut in April, money markets see 45% chance of a March rate cut (Bloomberg)

• Bank of Korea on hold as expected, maintains restrictive policy stance (Reuters)

GEOPOLITICS

• Truce in Israel-Hamas war extended by a day (FT)

• China ramping up cyber attacks against Taiwan (Bloomberg)

CHINA

• China manufacturing activity falls deeper into contraction in November (Reuters)

• New home prices in China seen rising this year after policy measures (Reuters)

ECONOMY

• US core PCE, the Fed’s preferred inflation metric, came in at 3.5% for October, in-line with consensus, down from 3.7% in September (Reuters)

• Eurozone inflation falls more than expected to 2.4%, lowest since mid-2021 (FT)

• Japan industrial prod beats, retail sales fall for first time in 4 months (Bloomberg)

• South Korea factory output falls most in ten months in October (Reuters)

• German unemployment surprises with highest rise since 2021 (Bloomberg)

• German retail sales jump as falling inflation boosts consumer (Reuters)

• French inflation falls more than expected to 3.8% but Q3 GDP shrinks (Bloomberg)

• India Q3 GDP grew more than expected at 7.6% (Reuters)

• Canada’s economy unexpectedly shrinks 1.1% in Q3 (Reuters)

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Charts of the Week

This segment of the morning wrap brings you weekly technical commentary on the ASX 200 and some of the more interesting charts in the market. These are not meant as recommendations. They are for illustrative purposes only. Any discussion of past performance is for educational purposes only. Past performance is not a reliable indicator of future return. Always do your own research.

ASX 200 – Gaining momentum?

ASX 200 daily chart (Source: Commsec)

Whilst the index remains bound in a broader, long-term range, it has bounced in the short term, off the 7,000 round number. There is resistance at 7125 but, if the bulls can overcome this point, a move into 7200, and then 7335 could be on the cards.

Bellevue Gold (BGL) – Vue from Above

Bellevue Gold daily chart (Source: Commsec)

Gold stocks are all the rage at the moment and I highlighted this one a while back, talking about a potential break higher. Yesterday that occurred, with the price action pushing and closing above the previous swing high. Volumes have been picking up and the RSI is not yet overcooked – suggesting that there is more room to move.

ASX corporate actions occurring today:

• Trading ex-div: NB Global Corporate Income Trust (NBI) – $0.01 

• Dividends paid: Dicker Data (DDR) – $0.10, Namoi Cotton (NAM) – $0.005 

• Listing: None

Economic calendar (AEDT):

• 12:45 pm: China Caixin Manufacturing PMI (Nov)

• 12:30 am: Canada Unemployment (Nov)

• 2:00 am: US ISM Manufacturing PMI (Nov)

• 3:00 am: Fed Powell Speech