- Equity Pullback: US equity futures declined sharply during today’s session, pressured by escalating geopolitical uncertainty and diminishing prospects for near-term interest rate cuts.
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Geopolitical Friction: Speculation is mounting regarding a potential US intervention in Iran in the coming days; reports suggest certain US units in Qatar have received orders to vacate their bases.
- Precious Metals Surge: Amid the flight to safety, gold has breached the $4,600 per ounce threshold, while silver trades above $90 per ounce. Despite rumors of physical supply constraints, COMEX silver inventories remain near record highs.
- Index Performance: The US500 fell by more than 1%, while the tech-heavy US100 slumped 1.6%.
- Banking Disappointments: Despite most major lenders reporting earnings that beat expectations or showed positive momentum, bank stocks retreated. Bank of America fell over 5%, and Citigroup dropped more than 4%, with more moderate losses seen in Wells Fargo and JPMorgan. Goldman Sachs is scheduled to report tomorrow.
- Energy and Risk-Off Sentiment: Growing anxiety over a potential US-Iran conflict has not only bolstered oil prices but also triggered a broad retreat from US equities.
- Inflationary Pressures: PPI data surprised to the upside, with the annual headline rate hitting 3% and the monthly reading at 0.1%. More concerningly, Core PPI jumped to 3.0% year-on-year—thwarting expectations of a drop to 2.7%—following a sharp 0.3% monthly increase.
- Resilient Consumption: November retail sales exceeded forecasts, rising 0.6% against the anticipated 0.4%. While the annual growth rate moderated from 3.47% to 3.3%, the data reinforces a narrative of economic resilience.
- Currency and Central Bank Rhetoric: EURUSD attempts at a recovery were stifled by the robust US data and hawkish commentary from Fed officials Bostic and Kashkari, both suggesting that imminent rate cuts are unlikely.
- Judicial Uncertainty: The Supreme Court once again deferred its ruling on the legality of Donald Trump’s tariffs. With no set publication date, the market remains on high alert for an announcement around 4:00 PM (CET) daily.
- AI IPO Prospects: AI giants Anthropic and OpenAI are reportedly following the lead of SpaceX by taking preliminary steps toward initial public offerings.
- Energy Sector Write-downs: BP shares declined following news of a potential £5bn fourth-quarter impairment, largely tied to its energy transition businesses.
- Pharma M&A Strategy: After losing out in the bidding for Metsera, Novo Nordisk has signaled a readiness to pursue aggressive acquisitions within the obesity treatment space.
- Growth Outlook: The Atlanta Fed’s GDPNow model indicates that fourth-quarter economic growth could reach as high as 5.3%.
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