Morning Wrap: ASX 200 to rise, S&P 500 logs fourth straight week of gains + Gold tops US$2,000

Major US benchmarks finished little changed in holiday-shortened trading last Friday, gold tests US$2,000 for a second time this month, the S&P 500 VIX Index hits the lowest level since January 2020, Adobe Analytics says Black Friday eCommerce spending rose 7.5% year-on-year to record highs and three bullish charts of interest.

Let's dive in.

S&P 500 SESSION CHART

S&P 500 choppy in a relatively uneventful and shortened trading session (Source: TradingView)

MARKETS

• Major US benchmarks were little changed in a shortened Friday trading session

• S&P 500 and Nasdaq cap off fourth-straight week of gains

• S&P 500 is up 8.7% so far in November, the best November since 1957 (ex-Covid)

• S&P 500 VIX Index falls to 12.5, the lowest since January 2020

• US bond yields bounced to 1-2 week highs, with the 2-year almost back at 5.0%

• Gold reclaims US$2,000 level as US Dollar Index nears 3-month low

• Risk sentiment continues to ramp up on easing financial conditions, disinflation momentum, growing soft landing expectations and peak Fed narratives 

• Nasdaq launches zero day options across Treasury and commodity markets (FT)

• Investors sell US dollar at fastest pace in a year (FT)

• Investors stashing cash in money market funds may be bullish sign for stocks (WSJ)

STOCKS

• OpenAI turmoil exposes threat to Microsoft's investment (FT)

• Nvidia will delay new AI chip designed to comply with US export restrictions (CNBC)

• Coinbase shares rally as Bitcoin briefly tops US$38,000 (CNBC)

• Amazon set to win unconditional EU approval for $1.4bn bid for iRobot (Reuters)

• Mastercard SpendingPulse says Black Friday sales rose 2.5% year-on-year (Reuters)

CENTRAL BANKS

• ECB's Villeroy says ECB won't raise rates again, excluding surprises (Bloomberg)

• BoE chief economist Pill warns of vigilance in inflation fight (FT)

GEOPOLITICS

• Israel and Hamas set to begin four-day truce on Friday (FT)

• Israeli intelligence 'dismissed' detailed warning of Hamas raid (FT)

• North Korean rocket stage exploded after satellite launch (Reuters)

• US and EU trade meeting was due to take place next month but now expected to slip to early next year (Bloomberg)

• Argentina's new President Milei quickly toning down aggressive rhetoric toward largest trading partners (Bloomberg)

CHINA

• China likely to wait until early next year to cut policy rates (Bloomberg)

• WHO asks China for information on child pneumonia outbreak (Bloomberg)

• China says multiple pathogens are behind spike in respiratory illness (Bloomberg)

• China's labor market seen as weaker than official data shows (Bloomberg)

• Beijing investigating shadow bank Zhongzhi as it faces US$37bn shortfall (FT)

ECONOMY

• Analysts cut holiday spending estimates on weaker Black Friday traffic (Reuters)

• Resilient consumer spending continuing to support broader US economy (Bloomberg)

• Black Friday ecommerce spending rose 7.5% to record US$9.8bn but sales likely to taper off from here, according to Adobe Analytics (CNBC)

• Japan manufacturing PMI flags deeper contraction, services marginally firmer (Reuters)

• Japan core inflation slightly misses, service prices hit 30-year high (Bloomberg)

• German Q3 GDP slightly shrinks (Reuters) 

• New Zealand retail sales surprise higher (Bloomberg)

• US PMIs steady in November (Reuters)

Sectors to Watch: Gold

US markets continued to grind higher in a relatively quiet and shortened trading session. Most of the above sector ETFs finished slightly higher notably Fintech (+1.1%), Uranium (+0.9%) and Cybersecurity (+0.8%).

The VanEck Gold Miners ETF (+0.2%) logged a smaller overnight gain as gold prices closed above the key US$2,000 level. The ETF has recently marked a higher high and testing key levels such as the 200-day moving average and the $30 level.

Gold is rallying off the back of a falling US dollar, peak yields and rising geopolitical conflicts. The yellow metal is also exposed to secular forces such as rising US government debt, volatile inflation and economic headwinds which make it attractive for the medium-to-long term.

VanEck Gold Miners ETF (Source: TradingView)

Bullish Times Ahead?

Here are three interesting tidbits about recent market drivers: Peak Fed, equity inflows and the strong November.

#1 Peak Fed: "For all of the oddities of this cycle, S&P has basically done exactly what it should have done following the peak of inflation (this analog goes back to the 1950s)," says Goldman Sachs.

Source: Goldman Sachs

#2 Buyers are back: US retail investors bought US$4.8bn of equities last week. This coincides with the peak Fed narrative as well as the sharp pullback in bond yields. Cash is being deployed from safe havens as equities become slightly more attractive.

Source: JPMorgan

#3 A massive November: The S&P 500 is on track for one of its best November gains on record. The Index has gained more than 8% fewer than 10 times since 1928. Of these standout Novembers, all but one had more gains the following year.

ASX corporate actions occurring today:

• Trading ex-div: Red Hill Minerals (RHI) – $0.10, Whitefield Industrials (WHF) – $0.102

• Dividends paid: None

• Listing: None

Economic calendar (AEDT):

No major economic announcements.