Market Report.
💼 Ray Dalio, founder of Bridgewater Associates, said he is concerned about the high valuation and market concentration in the artificial intelligence field and believes diversification is “very important.” He will also bet on building power infrastructure. Dalio believes that it is one of the three key ingredients (along with proper education and the rule of law) that the country needs to succeed.
🏘️ Dalio is concerned that the administration’s plan to “re-energize the housing market” through more rate cuts may not be workable, as the Fed’s actions have not directly translated into lower mortgage rates recently. Trump wants lower rates to boost the housing sector, but this could pose risks for the next Fed chair, as forecasters expect resilient growth, sustained consumer spending, and more persistent inflation in 2026.
📉 Cutting rates too far could stoke demand, boost hiring, and make mortgages more affordable, but also lift inflation and make it harder for the Fed to hit its 2% target.
📈 The market seems doubtful about the scope for aggressive easing, as 10-year Treasury yields have risen even as the Fed has cut rates, which is unprecedented. Determining the neutral rate has become more challenging given the economic impacts of Trump’s policies and the potential productivity shock from AI.
💬 A quarter-point rate cut is expected, but the language and economic projections will signal whether the next Fed chair will inherit a body more resistant to further cuts or more open to dovish policies.
🏦 Many Wall Street banks expect fewer Fed interest rate cuts next year due to lingering inflation concerns and expectations of a more resilient U.S. economy. Investors are rotating into intermediate-term Treasuries (like 5-year notes) rather than loading up on long-duration bonds, as the typical strategy of benefiting from rate cuts may not pay off this time, focusing on the intermediate part of the yield curve to balance inflation risks and policy uncertainty.
💶 The European Central Bank (ECB) has urged Italy to reconsider a proposed amendment that would state the Bank of Italy’s gold reserves belong to the Italian people. The ECB warned that this move could jeopardize the central bank’s independence, which is protected under European Union rules. Italy’s ruling party has proposed an amendment to the 2026 budget law that initially stated the central bank’s gold belonged to the state, but has since been revised to say it belongs to the Italian people.
🥇 Italy’s gold reserves are the world’s third-largest and are recorded on the central bank’s balance sheet, with the law stating the Bank of Italy manages them in line with EU rules that forbid using the gold to fund government spending. The ECB said the revised proposal is unclear on its purpose and urged Italy to consult the Bank of Italy to preserve its independence if they feel the need to clarify the legal ownership of the gold reserves.
🇨🇳 China’s trade surplus surpassed $1 trillion for the first time ever in November 2025, despite a steep drop in exports to the U.S. China’s overall exports grew 5.4% in the first 11 months of 2025 compared to the same period in 2024, while imports fell 0.6%, taking the trade surplus to $1.076 trillion.
📦 Exports to the U.S. plunged 28.6% in November, marking the eighth straight month of double-digit declines, even after the U.S.-China trade deal in October. Imports from the U.S. also shrank 19%. However, China’s exports to other major markets like the EU and ASEAN surged, offsetting the drop in U.S.-bound shipments.
🇺🇸 The U.S. trade deficit with China has contracted sharply, down about 21% year-to-date, as U.S. exports hit a record high. Despite the trade truce, U.S. tariffs on Chinese goods remain much higher than on other countries, leading Chinese exporters to utilize facilities in third markets to export to the U.S.
🤝 President Trump announced that Nvidia will be allowed to ship its H200 artificial intelligence chips to “approved customers” in China and elsewhere, on the condition that the U.S. gets a 25% cut of the revenue. Trump said Chinese President Xi Jinping “responded positively” to this proposal, which Trump claims will “support American Jobs, strengthen U.S. Manufacturing, and benefit American Taxpayers.”
💻 The same approach will also apply to other major U.S. chip companies like AMD, Intel, and others, according to Trump. Both Nvidia and AMD had previously agreed to share 15% of their China chip sales revenue with the U.S. government.
💶 By the way, did you know that the EU earned more from fining U.S. tech firms than from taxing all public European tech companies in 2024. EU fines on U.S. tech totaled €3.8 billion, while public European internet tech companies collectively paid only €3.2 billion in income tax.
⚠️ Trump on the EU fining Elon’s X: “Europe has to be very careful.”
🎬 Paramount Skydance Corp. has made a hostile takeover bid for Warner Bros. Discovery Inc., aiming to torpedo Netflix’s planned $72 billion acquisition of Warner Bros. The $40.7 billion equity portion of Paramount’s bid is being backed by a consortium of banks, billionaires, and sovereign wealth funds, including Bank of America, Citigroup, Apollo Global Management, Larry Ellison, Jared Kushner’s Affinity Partners, Saudi Arabia’s PIF, Qatar Investment Authority, and Abu Dhabi’s L’imad Holding.
💰 This financing package is designed to assure the Warner Bros. board of Paramount’s ability to close the deal quickly, with the equity backers agreeing to forgo governance rights. The debt portion of the deal, a $54 billion bridge loan, is being provided equally by Bank of America, Citigroup, and Apollo.
🧐 The involvement of figures close to former President Trump, such as Jared Kushner and Larry Ellison, as well as sovereign wealth funds from the Middle East, is notable and may raise antitrust concerns. The deal is seen as an attempt to block Netflix’s acquisition of Warner Bros., which Trump has already warned could raise antitrust issues.
⚖️ A federal judge has ruled that President Donald Trump’s executive order directing government agencies to stop issuing new leases and permits for wind energy is illegal. The governor on Monday sided with clean energy groups in a dozen states and New York that challenged an executive order that effectively froze approvals for wind energy projects in the United States.
🚗 Ford Motor Co. is partnering with Renault SA to develop and produce affordable electric cars in Europe, as both automakers face rising competition from Chinese EV makers. Renault will help Ford develop and manufacture two Ford-branded electric models in northern France, with the first vehicle expected to hit showrooms in early 2028. The companies also agreed to explore jointly producing vans for both brands, as they seek to share resources and costs to remain competitive.
🏭 This move signals Ford’s further reduction of its own production footprint in Europe, where its market share has fallen from over 7% a decade ago to just over 3% currently. Automakers in Europe are under pressure to offer more affordable electric and hybrid models as Chinese brands like BYD expand in the region with low-cost offerings.
🛢️ Oil prices fell on Monday after Iraq restored production at one of the world’s largest oilfields, Lukoil’s West Qurna 2. Investors are closely watching the peace talks between Ukraine and the leaders of France, Germany and Britain, as the outcome could impact Russian oil supply to the global market. The G7 countries and EU are in talks to replace the price cap on Russian oil with a full maritime services ban, in an effort to further reduce Russia’s oil revenue.
🕊️ Zelenskiy met with the leaders of the UK, France, and Germany, but the talks did not produce a clear path to a peace settlement with Russia that Ukraine can accept. The U.S. has been leading separate peace negotiations with Russia and Ukraine, but European leaders have expressed concern that the U.S. plan makes too many concessions to Russia. The talks in London were followed by Zelenskiy’s visit to Brussels and planned meeting with the Italian Prime Minister, as Ukraine seeks to coordinate its position with its European allies.
💶 After talks with Prime Minister Vladimir Zelenskiy in London, EU leaders expressed confidence they will sign a deal by the end of the year to use frozen Russian assets to secure a 90 billion euro loan to rebuild Ukraine.
🥇 Russia’s gold reserves have just exceeded $300 billion for the first time in the modern era. Gold now accounts for 42% of its national reserves, the highest proportion since 1995.
Market View.
📊 The market saw slight pullbacks during yesterday’s session as traders await tomorrow’s key event: the Federal Reserve’s interest‑rate decision. Mini S&P 500 futures fell nearly 1% before recovering to the current 6,862 points. Nasdaq 100 futures also experienced volatility but remain stable around 25,680 points.
💵 The US Dollar Index (DXY) briefly moved above 99 yesterday and is still holding above that level. This dragged EUR/USD down towards 1.1615, before rebounding to the current 1.1640.
🇩🇪 In Europe, DAX futures reached 24,150 points before pulling back to 24,100, holding clearly above the 24,000 support. A notable 55/200 intraday moving‑average bullish crossover is forming, suggesting that if the Fed is favourable tomorrow, the index could attempt an upside rally. Euro Stoxx 50 futures remain above 5,730 points.
🛢️ Crude oil has fallen more than 2.5% amid expectations of increased supply, as mentioned in the news section. Spot Brent trades around $62.45.
🥇 Gold futures have cooled, now trading near $4,200 versus almost $4,300 reached last week.
💻 Bitcoin continues to struggle with the $92,300 resistance. Yesterday it dropped sharply after touching that zone and is now trading around $90,500.
