Market Report.
🏦 The Federal Reserve’s decision to lower the federal funds rate by a quarter percentage point on Wednesday was the most divisive the central bank has been in more than six years. There were three dissenting votes against the rate cut – Chicago Fed President Austan Goolsbee and Kansas City Fed President Jeffrey Schmid voted for no decrease, while the newest member, Federal Reserve Governor Stephen Miran, called for a half-point cut.
🔁 This is the third dissent in a row for Miran, who has called for a half-point rate cut in the October and September meetings as well. Schmid also called for no decrease in October. The last time there were three dissents during a Fed meeting was in September 2019.
📝 In addition to the three dissenting votes, four other non-voting participants registered “soft dissents”, and seven officials indicated they want no cuts next year.
📉 While the dissents indicate resistance to faster rate cuts, this situation suggests that a new Fed Chair in 2026 and potentially more new Fed officials could mean more interest rate cuts are coming next year, as part of the Trump economic agenda. Jerome Powell nears the end of his second term, a new nominee who favors lower rates is on its way, potentially someone like National Economic Council Director Kevin Hassett.
💵 And as we suggested in our previous report, the Fed announced that it will start purchasing $40 billion in Treasury bills beginning Friday. This effectively expands the money supply, acting as a subtle form of policy easing and providing additional support to financial markets. Benchmark 10-year U.S. Treasury yields fell around 2% as result.
❓ But then, why have the futures of Nasdaq and the markets fallen the last hours?
📉 Oracle’s shares tumbled over 11% after hours, dragging down U.S. stock futures, as the company’s profit and revenue outlook missed forecasts and it flagged higher spending. This weighed on AI-related stocks in Tokyo, with the SoftBank Group holding dropping 5%, as investors question the profitability of AI infrastructure investments.
⚡ Remember when we said in October that the keys to the technological development we were living with would be the development of the energy needed to power the data centers? well, Goldman Sachs has issued a report highlighting the good performance of the energy sector.
📈 According to the report from this firm, several power companies caught the investment bank’s attention in November: Ceres Power (UK) – Gained 38.4% in November following a licensing agreement with Chinese firm Weichai Power. Goldman continues to like the stock as an underappreciated play on data centers. Vestas Wind Systems (Denmark) – Gained 16% in November after reporting strong Q3 results, beating on profits and announcing a buyback scheme. Goldman expects further growth as uncertainties fade. SSE (UK) – Gained 14.8% in November after announcing a £33 billion investment plan for the next 5 years. This provided visibility and clarity on funding, though Goldman later removed SSE from its Conviction List.
🤝 A new deal between the UK government and the Trump administration involves the UK agreeing to increase NHS spending on medicines by around £1.5 billion over the next three years. The goal is to lift NHS spending on branded medicines from 0.3% of UK GDP to about 0.35% by the end of 2028.
📦 This pledge is presented as part of a broader understanding to secure an exemption from threatened US import levies of up to 100% on some branded UK drugs. The reported deal fits into a series of negotiations where the US has pushed European partners to pay more for innovative drugs produced largely by American companies.
⚖️ In parallel, the UK has been preparing regulatory changes to ease drug approvals and raise cost-effectiveness thresholds, which would allow more expensive branded medicines onto the NHS.
🏘️ The latest RICS survey indicates that the UK housing market has cooled in response to the tax-raising measures announced in the government’s recent budget. While house prices are still facing mild downward pressure, with the price balance improving slightly to around -16%, the overall market is struggling to gain momentum.
📉 Surveyors attributed the slowdown to both the new annual tax on high-value homes worth over £2 million, as well as pre-budget media leaks about tax rises, which have dampened activity as buyers and sellers pause decisions.
💱 The Japanese yen has struck a record low against the offshore yuan this week, raising concerns about imported inflation in Japan as the Bank of Japan’s (BOJ) policy normalization remains gradual. The yen has weakened not only against the US dollar and euro, but also against the currencies of key trading partners like China and Australia.
📉 The BOJ’s cautious approach to policy normalization and lingering fiscal concerns are putting pressure on the yen, keeping Japan’s real effective exchange rate near multi-decade lows. This yen weakness may amplify imported inflation pressures, as China is Japan’s largest source of imports, even amid simmering political tensions between the two countries.
⚠️ A weak yen is problematic for Japan as it increases inflation risk.
Geopolitics.
⛴️ US assaults and seizes a Venezuelan oil vessel: The massive oil tanker seized by US forces off the coast of Venezuela has a long history as part of the “dark fleet” that facilitates illicit oil shipments. The tanker, known as the Skipper, was previously named Adisa and was sanctioned by the US in 2022 for its role in “illicit oil shipments” related to Iran.
🛢️ The Skipper exhibits many characteristics of the dark fleet, including sailing under a false Guyanese flag, having opaque ownership, and being older than it should be for continued crude export operations.
🔄 Earlier this year, the Skipper facilitated two at-sea transfers of Iranian crude that were bound for China, before showing up this month to collect Venezuelan oil. The Skipper’s owner and manager are both based in Nigeria and did not respond to requests for comment.
🇺🇸 U.S. President Donald Trump’s latest criticism of Europe has stung the continent, particularly as it tries to demonstrate more decisiveness and authority. Trump described European leaders as “weak” and presiding over a “decaying” region, saying “they don’t know what to do” in response to issues like immigration and the war in Ukraine.
🇺🇦 Trump’s comments came just a day after Ukrainian President Zelenskyy met with European leaders to discuss security guarantees and opposition to Ukraine ceding territory to Russia. Trump’s new national security strategy stating Europe risks “civilizational erasure” and questioning whether European countries can remain reliable allies.
💼 The European Commission has fined Elon Musk’s company X (formerly Twitter) €140 million for allegedly breaking laws requiring social media transparency. The Commission says X broke the law by making its blue verification checkmarks available to anyone, failing to make its advertising repository transparent, and failing to provide researchers with special access to its data.
📜 The Commission insists this decision has “nothing to do with content moderation” and is solely focused on X’s alleged violations of transparency requirements. The transparency requirements cited by the Commission are part of the EU’s Digital Services Act, which aims to hold large online platforms more accountable for the content and services they provide.
⚔️ This could bring a new confrontation between the US government and the EU. Trump warned, replying to a journalist on the fine question to X, that “the EU should be very careful”. On the other hand, its vice president, JD Vance said in October: “I think that Europe is at risk of engaging in civilization suicide. They are unable or unwilling to control their borders. You see them starting to limit the free speech of their citizens”.
Market View.
📉 US futures initially rallied following the Federal Reserve’s comments yesterday, but the optimism faded quickly after Oracle’s earnings results. Gains were retraced, bringing Mini S&P 500 futures back to 6,845 points, while Nasdaq 100 futures have fallen to around 25,525 points.
💵 The US Dollar Index (DXY) has recorded a decline of more than 0.70% since the Fed’s announcement. EUR/USD climbed to 1.1700 before easing slightly to the current 1.1690.
📉 Returns on the US 10‑year Treasury fell more than 2%, a normalisation move that fits with the idea of a more accommodative Federal Reserve.
🇪🇺 In Europe, the reaction has been far more muted. DAX 40 futures have barely moved since Monday and now trade near 24,115 points. Euro Stoxx 50 futures are even trading below Monday’s opening levels, currently around 5,712 points.
🛢️ Crude oil saw gains yesterday, possibly driven by the attack on an oil tanker off the Venezuelan coast, but prices have since adjusted lower. Brent has once again slipped below $62, now trading around $61.80.
🥇 Gold futures remain steady, trading near $4,245 per ounce.
₿ Bitcoin approached $94,500 yesterday but has since pulled back sharply and now trades around $90,240.
