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MARKET WRAPS

Watch For:

EU Money supply in the euro area, ECB Executive Board Member Philip Lane delivers lecture at Harvard University seminar; U.K. Bank of England MPC member Jonathan Haskel speaks at University of Warwick; Germany GfK consumer climate survey; France Consumer confidence survey; trading updates easyJet, Naspers, Rolls-Royce Holdings, Infineon Technologies

Opening Call:

Stock futures were broadly lower. Asian stock benchmarks were mixed; Treasury yields rose; the dollar weakened; while oil futures and gold gained.

Equities:

Stock futures were broadly lower as investors await more economic data.

"We've seen the market run up," said Johan Grahn, head ETF market strategist at AllianzIM. "The bigger trades are behind us for the moment."

"We have all this potential bad news on the horizon," said JJ Kinahan, chief executive of IG North America.

"That being said, the market is largely ignoring that and seeing a good end of the year coming."

Investors are focusing on the personal consumption expenditures price index due Thursday, the Fed's preferred measure of inflation, which may set the tone for bonds - and, by extension, stocks - in the short term.

The first revision of third-quarter gross domestic product is due on Wednesday.

Forex:

The dollar likely weakened on possible month-end position adjustments.

The greenback is expected to be heavy this week, Kristina Clifton, senior economist and currency strategist at CBA said.

This was likely to be driven by fund managers adjusting their hedges, expectations for a U.S. soft-landing, and the low-volatility environment, Clifton added.

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The euro could struggle to rise, ING currency analyst Chris Turner said.

Eurozone provisional inflation data for November due on Thursday are likely to show a further slowing in both headline and core annual inflation.

This could support expectations for around 70 basis points of interest-rate cuts by the European Central Bank next year and weigh on the euro, he said.

Bonds:

Treasury yields were higher but some analysts reckon that the markets may be getting ahead of themselves.

"We don't expect the rally on Treasury prices is going to continue," BCA Research's Doug Peta said, adding markets will eventually adopt a more lukewarm outlook on Fed cuts.

He reckons the 10-year peaked at 5% but will remain above 4%, as it has since July.

"Since we think the Fed is going to be fairly measured in cutting, we think there's a floor on the 10-year yield," he said.

Energy:

Oil futures gained in Asia.

Based on the recovery of oil prices from their Monday lows, market participants seem to expect OPEC+ to extend curbs on supplies into 2024, said Fawad Razaqzada, market analyst at City Index and https://urldefense.com/v3/__http://FOREX.com__;!!F0Stn7g!HkKaNYwX1vbJ-pU38q_jBg_Cs-t3BTslVpmT6ypvAZzSK_dMPoIsyVetw0ZvCyUjqJxEiasxIMrQuLdltQ_aLyZ_uRg4iyc1u84exV-bkxs$ .

Saudi Arabia will probably roll over its additional voluntary production cut of 1 million barrels per day into next year, and Russia should extend its output reductions at least until 1Q, the analyst added.

Metals:

Gold edged higher supported by the overnight weakness of the USD, which typically has an inverse correlation with the precious metal.

Gold's latest break above the psychologically important $2,000/oz level has been backed by less hawkish commentary from the Fed and weaker U.S. economic data in recent weeks, Oanda said.

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Copper prices edged higher after falling overnight.

The escalating protests at Panama's port, which is restricting copper supplies from the Cobre Panama, is propping up copper prices, ANZ analysts said.

However, China's weak economic data was capping the gains of the industrial metal.

"The subsequent risk of deflation hurt sentiment across the base metals complex," they added.

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Iron ore prices were lower amid regulatory pressures in China.

The National Development and Reform Commission said last Friday that it recently held a meeting with major port operators to understand iron-ore inventory and storage matters to guard against price speculation, ANZ analysts said.

However, traders remain convinced that China's CNY1 trillion debt issuance announced last month will boost housing demand and lift up prices of the steelmaking material, the analysts said.

TODAY'S TOP HEADLINES

China's Economy to Meet 5% Growth Target, PBOC Says

China's central bank said the economy is expected to realize its 5% growth target this year while calling for an economic transformation as the debt-driven growth model becomes less effective.

The People's Bank of China said there are "significant shifts" in the real estate supply-demand dynamics, which also makes it urgent for the nation to upgrade the economy, according to a quarterly report on its monetary policy released late Monday.

S&P 500 may rise 10% by end of 2024 amid worries that small-cap stocks 'can't hack' higher rates, says BofA

U.S. stocks will probably keep climbing next year, with S&P 500 companies in a stronger position to adapt to higher interest rates than smaller ones, according to BofA Global Research.

BofA is forecasting that the S&P 500 will end 2024 at 5,000, which is up about 10% from the index's closing level Monday at 4,550.43. The S&P 500 SPX, which tracks U.S. large-cap stocks, has far stronger gains in 2023 than the small-cap-focused Russell 2000 index.

What an OPEC+ 'flood the market' scenario may do to oil prices

A scenario in which a group of major oil producers known as OPEC+ decides to "flood the market" is seen as a long shot, but still something to consider given that history has been known to repeat itself.

The Organization of the Petroleum Exporting Countries and its allies are expected to announce their decision on oil output quotas at a virtual gathering on Thursday - four days after postponing their ministerial meeting that had been previously scheduled for Sunday.

Gaza Is Falling Into 'Absolute Chaos,' Aid Groups Say

A shaky cease-fire between Israel and Hamas has allowed a surge of aid to reach Palestinians in Gaza, but humanitarian groups and civilians in the enclave say the convoys aren't nearly enough to address the needs of the strip's two million people.

Despite the pause in fighting, Palestinians in Gaza are burning door frames and piles of garbage to cook, sleeping crammed into school classrooms and strangers' homes, and scrambling onto trucks bringing aid from Egypt in a desperate grab for supplies, residents say.

Amazon Deal for iRobot May Restrict Competition, European Commission Says

The European Commission said Monday that Amazon's proposed deal to buy Roomba-maker iRobot may limit competition in the robot vacuum cleaner market.

European regulators said that they had informed Amazon of the commission's preliminary view following an investigation of the proposed acquisition.

Tesla Sues Swedish Government in Move Related to Mechanics Strike

Tesla is suing the Swedish Transport Agency to receive new-car registration tags directly, rather than through the mail, in a move related to a mechanics strike in the Scandinavian country.

Transportstyrelsen spokesman Mikael Anderson said Monday that the agency hasn't seen the lawsuit but confirmed it was filed in a district court.

Israel, Hamas Agree to Extend Truce by Two Days

Israel and Hamas agreed on Monday to a two-day extension of their truce in Gaza to allow for the release of more Israeli hostages as part of a fragile agreement that has brought respite from seven weeks of war, according to Egyptian, Qatari and Hamas negotiators.

Hamas released another 11 Israeli hostages Monday night as part of the initial deal. The latest group, which included no Americans, were in Israel, Egyptian officials said. The 11 included six citizens of Argentina, three French citizens and two German citizens, according to Qatari officials.

Fast-Fashion Giant Shein Files to Go Public

Shein, the China-founded online fashion company that won over hundreds of millions of shoppers around the world, has confidentially filed to go public in the U.S. in what could be one of the biggest IPOs in years.

Goldman Sachs, JPMorgan Chase and Morgan Stanley have been hired as lead underwriters on the offering, which could happen in 2024, people familiar with the matter said.

Microsoft Needs a Better Seat at OpenAI's Table

Microsoft played a weak hand rather well in the drama that engulfed OpenAI last week. But the tech giant now has a complicated task ahead: It needs to solidify its relationship with the high-profile startup while also showing it can chart its own course in the vital field of artificial intelligence.

Wall Street has cheered Microsoft CEO Satya Nadella's handling of the situation, which began with the surprise firing of OpenAI Chief Executive Sam Altman by the company's board of directors late on Friday, Nov. 17, and concluded with Altman agreeing four days later to return to his role. In the interim, Microsoft announced plans to hire Altman directly, along with any other OpenAI employees who cared to join.

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Expected Major Events for Tuesday

00:01/UK: Oct Zoopla House Price Index

00:01/UK: Nov Shop Price Index

07:00/DEN: Oct Retail sales index

07:00/GER: Dec GfK consumer climate survey

07:45/FRA: Nov Consumer confidence survey

08:00/SVK: Oct PPI

09:00/ITA: Oct Foreign Trade non-EU

09:00/AUT: Nov Austria Manufacturing PMI

09:00/EU: Oct Monetary developments in the euro area (M3)

10:00/CRO: 3Q Flash Estimate GDP

10:00/CRO: 3Q GDP

10:00/MLT: 3Q GDP

11:00/IRL: Oct Retail Sales Index

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(END) Dow Jones Newswires

November 28, 2023 00:15 ET (05:15 GMT)

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