This Week
Tuesday’s Nonfarm Payrolls and the unemployment rate will provide more cues for the Fed’s rate-cutting path next year and will impact market sentiment. There is likely to be increased focus on stock just ahead of the Christmas period amid hopes that a “Santa Claus” rally may take place. The highlight of the week will be the US CPI Inflation data, set for release on Thursday. In Europe, the ECB (no change expected) and the Bank of England (25 basis points cut expected) will also meet on Thursday. On Monday, talks between the US and Ukraine are set to continue on a possible peace deal.
Stocks
WALT DISNEY
Walt Disney’s stock price surged 6.26%, climbing to a one-month high on Friday after the announcement of a groundbreaking tie-up. Disney outlined a $1 billion partnership with OpenAI, licensing Disney characters for Sora AI video generation. Analysts see the move as a step towards leveraging AI to enhance business performance. In November, the company stated that theme park attendence were broadly higher and that the Disney+ streaming service was growing well.
VISA
Visa’s stock price jumped 4.54%, rising to a six-week peak at the end of the week amid solid consumer spending data from the US and on the prospect of more rate cuts, boosting the company’s payments outlook. The main catalyst for Friday’s rise was likely Bank of America’s upgrade from “Neutral” to “Buy”, citing the company’s business strength and valuation. News that Visa had settled a long-standing legal battle (MDL litigation) with US merchants also supported the stock.
Commodities
Crude Oil
Crude oil prices sank 4.5% to a near two-month low amid reports that OPEC and non-OPEC output continues to rise, offsetting falling US inventory levels. Monthly reports from OPEC and the EIA did little to support the commodity amid mixed projections for future demand growth next year. The US administration pushed on with its peace plans for Russia and Ukraine, wanting a deal to be reached before Christmas.
Gold
Gold prices rose 2.3% as the dollar weakened against its rivals, following the Fed’s decision to cut rates. Expectations that President Trump’s economic advisor, Kevin Hassett, will become Fed Chair once current Fed Chair Powell completes his term next year, could be boosting the precious metal since President Trump is known to be determined to lower interest rates.
PLATINUM
Platinum prices soared 6.62% to post a multi-year high as supply shortages continued to plague the market, with South African mining output operating below expected levels. Reports suggest that investment demand for the metal has increased sharply this year. Data from China, which showed an increase in physical exports for auto production and jewelry, were also cited as catalysts. Industrial demand has also remained supportive.
EUR/USD
The EUR/USD climbed 0.84% by the close of business on Friday and tested a two-month high on Thursday as a weaker dollar pulled back against its peers. The Fed rate cut and expectations of two further rate cuts next year, alongside the prospect of a more dovish Fed leadership shift, pressured the greenback. ECB officials, meanwhile, have signaled that the bank may keep rates at current levels, providing support to the Euro.
Recap
Last week, the S&P 500 declined 0.6%, the Nasdaq dropped 1.6% and the Dow Jones advanced 1.1%.
Most US stock indices pulled back last week after traders rotated away from tech stocks and towards industrials, despite a 25-basis point Fed rate cut and better-than-expected earnings results from AI-linked firm Broadcom. In geopolitics, the US and Ukraine met on Sunday and reported progress on a potential peaceful solution to the Russia-Ukraine conflict. Meanwhile, Russia reportedly attacked Ukrainian ports and hit Turkish-owned ships after earlier Ukrainian strikes on the Russian shadow fleet of oil tankers.
Crude oil prices declined to multi-week lows, while traders took profits on natural gas, pushing prices lower. Silver prices pushed to record peaks, and gold prices tested a near two-month high. Platinum prices hit a fourteen-year high, while Palladium prices also jumped at the end of the week.