Market Report.
🇫🇷 Yeserday, the French government agreed to scrap plans to reduce drug reimbursements, in a new concession to Marine Le Pen’s Rassemblement National (RN) party to prevent impeachment of the government. According to RN spokesman Charles Ballard, ‘there are still red lines in the social security budget, particularly on pensions’.
📉 France’s manufacturing sector experienced its steepest decline in new orders since the COVID-19 pandemic, with the HCOB France Manufacturing Purchasing Managers’ Index (PMI) falling to 43.1 in November. This is the twenty-second consecutive month below the 50.0 threshold, indicating contraction. The sector remains in crisis mode, with firms discounting prices despite rising input costs, leading to margin erosion. Employment in the sector continues to fall, with pessimistic expectations for output over the next 12 months.
🇩🇪 Germany’s manufacturing sector remains in contraction territory, with a steady PMI of 43.0, below the 50-point threshold for growth. The decline in output and new orders eased slightly, but employment, output prices, and export sales continued to fall. Big companies planning massive job cuts. Sadly, Business confidence slightly improved, possibly due to the collapse of the ruling coalition and hopes for a new government’s economic turnaround.
📈 Meanwhile, the German Stock Exchange DAX40 reached record highs yesterday.
🇬🇧 British retailers reported lackluster sales in November. The decline was primarily due to the fact that this year’s data did not include Black Friday sales in late November, which will be reflected in the December numbers. Overall, consumer spending on Barclays’ debit and credit cards fell by 0.5% in November, the first decline since July, as factors like easing consumer confidence and expectations of higher inflation and interest rates weighed on spending. However, Barclays said retail and overall transactions on Black Friday increased 9.5% compared to Black Friday 2023, reaching the highest level so far this year.
📊 On CME’s FedWatch Tool, the odds of a quarter-point rate drop by the Fed on December 18 have increased, rising from 66% the day before and 52% the week before to 75% presently.
Market View:
🌍 The US reaches record highs once again. Mini S&P 500 futures have reached new highs in recent hours, touching 6,070 points. Meanwhile, the Nasdaq experienced a strong rally during yesterday’s session, rising decisively above 21,000 points and now standing at 21,230 points.
💵 The dollar index climbed back above 106.50 points, where it is now. The EUR/USD, meanwhile, lost the 1.05 level and is now trading at 1.0488.
📉 European markets followed in the footsteps of the US stock markets, although Europe is experiencing a severe economic situation. PMI data released yesterday showed a contraction in the manufacturing sector in Europe’s two largest economies, Germany and France.
📊 However, the DAX 40 reached new all-time highs yesterday, approaching 20,000 points. It is currently trading at 19,955 points. The EuroStoxx 50 also rose sharply, although it has yet to reach the 5,000-point mark and is currently trading at around 4,875 points.
🛢️ Crude oil prices remain unchanged, with Brent crude oil trading around 72 dollars. Gold continues to consolidate above $2,650, currently trading at $2,670 per ounce.
💻 As for Bitcoin, it remains at high levels, but without significant movements in recent days. The cryptocurrency has not managed to break through the $97,500-98,000 barrier and is currently trading at $95,500.
Geopolitics:
🌐 AfD plans to campaign for Germany to leave the European Union, the Paris Climate Agreement, and abandon the euro before early elections in February. They also advocate for tightening abortion laws, ending economic sanctions against Russia, and repairing the Nord Stream pipelines. The draft program suggests ending permanent bailouts and establishing a new European community.
🤖 Skynet is coming. The German company Helsing, which is well-known for creating AI software for fighter jets and unmanned aerial vehicles, is now creating its own attack drones that are capable of carrying ammunition and navigating without the need for a GPS or human guidance. The business is promoting them to NATO allies and Ukraine, claiming that its technology can address the issue of Russian electromagnetic jamming.
💶 EU: A deal on a new €1.5 billion fund to support Ukraine and the bloc’s defence sector for the next three years is almost finalised. The fund’s negotiations, which are expected to be completed by the end of the year, would permit the purchase of military hardware with up to 35% of its components coming from outside the EU.
