US October CPI remained unchanged on a MoM basis, lower than the expected growth of 0.1% and the previous growth of 0.4%; on a YoY basis, it increased by 3.2%, weaker than the expected 3.3% and the previous 3.7%. Core CPI increased by 0.2% on a MoM basis, weaker than the expected and previous growth of 0.3%; on a YoY basis, it increased by 4%, weaker than the expected and previous growth of 4.1%, reaching a two-year low since September 2021.
The unexpected cooling of US inflation has confirmed the market's expectation that the Federal Reserve has completed its rate hikes. The probability of rate hikes in December and January has dropped to zero from 14% and 25% respectively, while the bets on rate cuts in the first half of next year have rapidly increased. The expected timing of the first rate cut in May has been brought forward from July, and the probability of a rate cut in May has increased from 34% to 63%.
Federal Reserve officials are &#34;as always&#34; trying to suppress overly optimistic rate cut trades. This year, Charles Evans, a voting member of the Federal Open Market Committee and president of the Chicago Fed, said that efforts are still needed to combat inflation, and housing inflation will be a key factor. Next year, Thomas Barkin, a voting member of the Federal Open Market Committee and president of the Richmond Fed, also said that he is not sure if inflation is on a steady path to return to 2%, and he is &#34;worried that more tightening actions may be necessary.&#34;
John Johnson, the Republican Speaker of the House of Representatives, said that his proposed incremental spending bill is gaining more and more bipartisan support, which will allow enough time for the Senate to pass the bill, and the US federal government is expected to avoid a shutdown before early Saturday morning.
The preliminary QoQ GDP for the Eurozone in the third quarter contracted by 0.1%, and if the performance continues to be poor in the fourth quarter, it may fall into a technical recession. The wage growth rate in the UK in the third quarter is still close to a record high, and the number of job vacancies has decreased, indicating that the labor market is starting to soften. However, this may not help alleviate the concerns of the Bank of England about inflationary pressures, which has led to weaker gains in the FTSE 100 index on Tuesday compared to other European countries.
The Dow Jones Industrial Average rose nearly 500 points, while the S&amp;P, Nasdaq, and Chinese concept stocks rose by about 2%, and small-cap stocks rose by more than 5%. Microsoft and Nvidia reached new highs.
On Tuesday, November 14th, due to the lower-than-expected and previous US October CPI inflation, futures traders began to predict a 50 basis point rate cut by the Federal Reserve in July next year. US stocks collectively opened more than 1% higher, with the Russell small-cap stocks opening up 3% and Dow futures up 300 points before the market opened:
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Within the first 10 minutes of trading, the tech-heavy Nasdaq and the Nasdaq Golden Dragon China Index both rose by 2%. The Nasdaq rose more than 350 points or 2.6% during the day, breaking through the 14,000-point mark and achieving the best performance in about six months, breaking free from the technical consolidation range.
The S&amp;P 500 index rose by nearly 100 points or 2.2%, briefly surpassing the 4,500-point mark. All 11 sectors rose, with the interest rate-sensitive real estate sector rising by over 5%, the best in a year. Consumer discretionary, materials, and utilities sectors rose by over 3%, while telecom and tech stocks rose by 2%.
The Dow Jones Industrial Average rose by nearly 600 points or 1.7%, and the Russell small-cap stocks rose by 5.4% and closed at the daily high, achieving the best performance in a year. The &#34;fear index&#34; VIX fell by nearly 6% and briefly fell below 14, the lowest in two months since September 20th, and the Nasdaq 100 also rose by over 2%.
Tracking the S&amp;P Information Technology sector ETF XLK rose 2% to a historic closing high, the ETF tracking the Communication Services sector reached its highest level since April last year, the Software stock ETF reached its highest level since January last year, mainstream photovoltaic stocks jumped by double digits, and the photovoltaic stock ETF TAN rose by over 10%.
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In the end, the Dow rose for three consecutive days, reaching the highest level in two months since September 14th, the Nasdaq reached the highest level in three and a half months since August 1st, and both the S&amp;P and Nasdaq achieved their best performance since April. The Russell small-cap stocks rose for three consecutive days to the highest level in eight weeks since September 20th:
The S&amp;P 500 index rose 84.15 points, or 1.91%, to 4495.70 points. The Dow rose 489.83 points, or 1.43%, to 34827.70 points. The Nasdaq rose 326.64 points, or 2.37%, to 14094.38 points. The Nasdaq 100 rose 2.1%, and the Russell 2000 small-cap stock index rose 5.4%.
Star tech stocks rose together. &#34;Metaverse&#34; Meta rose over 2%, hitting a 22-month high for the eighth consecutive day, Amazon rose over 2% to a 19-month high, Apple rose over 1%, Netflix rose nearly 1%, both reaching a ten-week high, Microsoft rose about 1% to a historic closing high, Google A rose over 1% to a three-week high, and Tesla rose over 6% to a four-week high.
Chip stocks also rose together. The Philadelphia Semiconductor Index rose 3.6%, breaking through 3600 points to a three-month high since August 8th. Intel rose 3% to a 17-month high, AMD rose 2.7% to a five-month high, and Nvidia rose over 2%, rising for ten consecutive days to a historic closing high, tying the longest consecutive rise record since its listing, with a cumulative increase of nearly 22% in the past ten days.
AI concept stocks rebounded for three days. C3.ai rose over 7% to a ten-week high, Palantir Technologies rose over 1% to a three and a half month high, SoundHound.ai rose 7% to a two-month high, and BigBear.ai rose 5.6% to a three and a half month high.
In terms of news, Goldman Sachs reiterated its buy rating on Nvidia ahead of its third-quarter earnings report next week, expecting strong performance and guidance for the fourth quarter. Tesla China raised the prices of the Model 3 and Y rear-wheel drive versions. C3.ai expanded its strategic cooperation with Amazon AWS cloud services to provide enterprises with generative AI solutions.
Popular Chinese stocks followed the strong rise of the US stock market. ETFs KWEB and CQQQ both rose over 2%, and the Nasdaq Golden Dragon China Index (HXC) rose 2.2%, breaking through 6400 points, rebounding for three consecutive days from a new low of over a week and reaching a one-month high.
In the Nasdaq 100 constituents, JD.com rose 3.7%, Baidu rose over 2%, and Pinduoduo rose 1.6%. Among other stocks, Alibaba and Tencent ADR rose about 2%, Bilibili rose 3%. NIO rose nearly 5%, Xiaopeng Motors rose 9.7%, and Li Auto rose nearly 1%.
At the same time, BOSS Zhipin rose over 5%, with third-quarter revenue exceeding expectations, up over 36% YoY, and will distribute dividends for the first time after listing. Thunder fell 4.5%, with third-quarter adjusted net profit down about 39% YoY. Vipshop rose 3.5%, but its net revenue guidance for the fourth quarter was lower than market estimates. Faraday Future fell over 5%, generating revenue for the first time in the third quarter and narrowing its operating loss. It will hold a &#34;Middle East Strategy Launch Event&#34; at the end of the month.
Despite Moody's downgrade of the credit rating outlook for major bank subsidiaries such as JPMorgan Chase and Wells Fargo to negative, bank stocks surged due to hopes of avoiding an economic recession. The industry benchmark, the Philadelphia Stock Exchange KBW Bank Index (BKX), rose 5.6% and closed up 4.7%, reaching its highest level in eight weeks since September 18, with the largest intraday gain in five months since June 6. It had hit a three-year low since September 2020 at the end of October. The KBW Nasdaq Regional Banking Index (KRX) rose 8.6% and closed up 7.5%, reaching its highest level in ten weeks since September 5, and hitting its lowest level since November 2020 on May 11.
Other stocks with significant changes include:
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According to reports, Amazon will allow US Snapchat users to directly purchase advertising products on Amazon from this &#34;disappearing&#34; social media application. Snap, the parent company of Snapchat, rose over 7% to its highest level in four and a half months.
Chemtrade will acquire a 77% stake in the steelmaking coal business of Canada's Teck Resources for $6.93 billion in cash, laying the foundation for the spin-off of its own coal business in two years. Teck Resources, a mining stock, rose over 7%, while Rio Tinto rose 3%, and Vale and Southern Copper rose about 5%.
US home improvement retail giant Home Depot rose over 5% to a seven-week high, with the largest intraday gain in nearly a year. Although its full-year performance guidance narrowed and third-quarter revenue declined 3% YoY, the quarterly report still exceeded expectations. The management stated that the worst period of inflation has passed.
Electric vehicle manufacturer Fisker fell more than 24% to its lowest level since going public, with worse-than-expected losses in the third quarter and poor vehicle deliveries. After the unexpected departure of the CFO, it was revealed that there were significant deficiencies in internal financial controls, and the submission of the 10Q quarterly report regulatory document will be delayed.
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European stocks rose across the board, with all country indices except the UK rising more than 1%. The pan-European Stoxx 600 index closed up 1.34% to a one-month high, with the basic resources sector up 3.7%, retail stocks up over 3%, and interest rate-sensitive real estate stocks up 7% to an eight-month high. Goldman Sachs predicts that with the strengthening of household consumption capacity and the easing of economic slowdown threats, the European Stoxx 600 index will rise 7% next year.
<h2>US Treasury Yields Plummet by Double Digits, 2-Year to 10-Year Yields Drop Over 20 Basis Points, Benchmark Yield Hits 7-Week Low</h2>
The CPI cooling off more than expected has confirmed the market's expectation that the Fed has ended its current round of interest rate hikes. US Treasury yields have collectively dropped by double digits, with the 10-year benchmark yield falling below 4.45% and the 3 to 7-year intermediate bond yields dropping over 20 basis points.
Morgan Stanley's long position in US Treasury bonds has reached its highest level since 2010, and Bank of America's fund manager survey also shows that investors' bullishness on bonds is at its highest level since the financial crisis.
The 2-year Treasury yield, which is more sensitive to monetary policy, fell 23 basis points to 4.81%, reaching its lowest level in over a week. The 10-year benchmark yield dropped 20 basis points intraday, rebounding over 22 basis points from its daily high to 4.43%, marking a seven-week low since September 22nd and the largest single-day decline since the collapse of Silicon Valley Bank in March triggered global financial concerns. The 30-year long bond yield saw the deepest intraday decline of 15 basis points and briefly fell below 4.60%, also hitting a seven-week low.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/0e002c3d-086e-46a2-a326-f597df061586.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/0e002c3d-086e-46a2-a326-f597df061586.png"/> Collective Drop of Over 20 Basis Points in 2-Year to 10-Year US Treasury Yields
Eurozone bond yields follow the sharp decline in US Treasury yields. The 10-year benchmark German bond yield in the eurozone fell over 12 basis points, dropping below the 2.6% level for the first time since September 14th, while the peripheral country benchmark 10-year Italian bond yield also fell 16 basis points, hitting a two-month low. The 10 to 50-year UK bond yields collectively dropped over 17 basis points, with the benchmark yield hitting a five-month low.
<h2>Oil Prices Rise Nearly 2% Intraday, Retreat from One-Week Highs, WTI Attempts to Break $80, Brent Approaches $84</h2>
If the Fed ends its rate hikes, it will help boost economic growth and oil demand. The International Energy Agency has raised its oil demand growth forecast for the next two years, echoing yesterday's optimistic OPEC monthly report, which has boosted oil prices by nearly 2% intraday, but retreated from highs in the closing session. WTI December futures closed flat at $78.26 per barrel, while Brent January futures fell $0.05, or 0.06%, to $82.47 per barrel.
WTI crude oil rose as much as $1.51 or 1.9%, briefly surpassing $79 and attempting to break the $80 level, reaching a one-week intraday high since November 7th, but slightly declined in the closing session and approached $78.
Crude oil prices rose by $1.46 or 1.8%, attempting to break through $84 per barrel, also reaching a one-week intraday high, but erasing all gains by the end of the session.
Despite expectations of a slowdown in growth in almost all major economies, the International Energy Agency (IEA) has raised its global oil demand growth forecast for this year from 2.3 million barrels per day (bpd) to 2.4 million bpd, and increased next year's demand growth expectation from 880,000 bpd to 930,000 bpd. However, a small-scale supply surplus is expected in the first half of next year. The US Department of Energy's plan to purchase 1.2 million barrels of oil to replenish strategic petroleum reserves will also help boost short-term demand.
The TTF Dutch natural gas futures in Europe closed slightly higher by 0.1%, while ICE UK futures fell by 0.8%, deviating from the daily high after the release of US CPI data. US natural gas futures fell by over 3%. The simultaneous rise in European and American natural gas prices yesterday was due to concerns that the Texas LNG liquefied natural gas plant in the United States will shut down again, limiting supply during the peak winter heating season.
The US dollar index, measuring against six major currencies, fell by 1.6% and breached the 104 level, while the euro and pound rose by 1.8%, and the yen rose by 1% to approach 150, with the offshore renminbi rising by over 400 points.
The DXY, a basket of currencies measuring against the US dollar, fell by 1.6%, consecutively breaching the 105 and 104 levels, reaching its lowest level in over ten weeks since September 1. The Bloomberg Dollar Index fell by over 1%, marking the largest decline since January 6.
Non-US currencies surged significantly. The euro rose by 1.8%, consecutively breaking through the 1.07 and 1.08 levels, surpassing the 200-day moving average and reaching the highest level since August 31. The pound rose by 1.8%, consecutively breaking through the three levels of 1.23 to 1.25, reaching a two-month high.
The yen rose by nearly 1%, breaking through 151 and approaching 150, reaching a one-week high, after hitting a one-year low of below 152 yesterday. The offshore renminbi approached 7.25 yuan, rising by nearly 430 points or 0.6% from the previous day's closing price, reaching the highest intraday level in two and a half months since September 1. The commodity currencies, the Australian dollar and the New Zealand dollar, rose by 2% against the US dollar.
Mainstream cryptocurrencies fell across the board. The largest cryptocurrency, Bitcoin, fell by 4% to $35,300, after breaking through the $37,000 level for the first time since May last year last Friday. The second-largest cryptocurrency, Ethereum, fell by over 5% and breached $1,980, moving away from a seven-month high.
Mainstream cryptocurrencies are falling sharply.
Spot gold rose more than 1% to $1970, silver rose nearly 4%, and palladium rose 5%. London copper reached its highest level in a month and a half, and zinc rose nearly 2%.
The sharp decline in the US dollar and US bond yields significantly boosted the price of gold. COMEX December gold futures rose $16 or 0.8% to $1966.50 per ounce, while December silver futures rose 3.5% to $23.13, returning above the $23 mark.
Spot gold rose more than $24 or 1.3% intraday, briefly touching the $1970 mark and recovering most of the decline since November 8. Spot silver rose nearly 4% and returned above $23, while palladium rose 5% and returned above the $1000 mark.
Daniel Ghali, a commodity strategist at TD Securities, believes that the US CPI inflation is significantly weaker than expected, which is quite favorable for precious metals. He also expects that the data in the fourth quarter will deteriorate significantly, further weakening the US dollar and supporting gold. The price of gold may rise to $2100 in the next six months.
London industrial metals have risen for two consecutive days. The &#34;Copper Doctor,&#34; which rose 1.6% yesterday, rose another 0.8% and broke through $8200 to a month and a half high. London aluminum continued to rise from its two-week low, London zinc rose 1.9% to $2600, reaching a new high in a week and approaching the high since early October. London lead rose 1.5% and broke through $2200 to a seven-week high. London nickel rose slightly, but it is not far from its two-and-a-half-year low since May 2021. London tin, which rose 1.3% yesterday, rose more than 1% and broke through $25,000 to a three-week high.
At the same time, Shanghai zinc rose more than 1% in the night session, Shanghai nickel rose 0.8%, and aluminum oxide rose more than 1.5%. Domestic futures for coke, coking coal, and iron ore all rose more than 3% in the night session, while palm oil, hot-rolled coil, and asphalt rose more than 2%.

NVDA

In October, the core CPI in the United States increased by 4% YoY, the weakest in two years, confirming the market's expectation that the Federal Reserve has completed its rate hikes and intensifying bets on the magnitude of interest rate cuts next year. The Dow Jones Industrial Average rose nearly 500 points, reaching its highest level in two months, while the S&P 500 also rose nearly 2%. The Nasdaq rose 2.4%, breaking free from its technical consolidation phase, and the Russell 2000 small-cap stocks rose over 5%, achieving their best performance in a year. Chip stocks rose 3.6%, with Nvidia matching its longest record of consecutive gains since going public, and Tesla rose over 6%. Chinese concept stocks rose over 2%, reaching their highest level in a month after three consecutive days of gains, while XPENG-W rose nearly 10%. US bond yields plunged across the board, with the benchmark bond yield hitting a seven-week low. The US dollar index fell 1.6% and fell below 104, while the Japanese yen rose 1% and approached 150. Offshore renminbi rose more than 400 points and approached 7.25 yuan. Oil prices rose nearly 2% before retreating from a one-week high, with US oil briefly attempting to break through $80. Spot gold rose over 1% to $1970, silver rose nearly 4%, and palladium rose 5%. London copper reached its highest level in a month and zinc rose nearly 2%.

Wallstreetcn

NVIDIA

S&P 500 and Nasdaq had their best performance in April, with Microsoft and Nvidia reaching new highs, while US bond yields dropped more than 20 basis points.