The market expects the European Central Bank and the Federal Reserve to accelerate the pace of interest rate cuts. The U.S. November ISM manufacturing data remained in contraction but exceeded expectations, driven by new orders returning to expansion. Both the services and manufacturing PMIs for the eurozone contracted in November, with new orders declining for six consecutive months, and business confidence at its lowest in a year.

In 2024, the ticket committee member and Atlanta Federal Reserve President Bostic stated an open attitude towards policy. Federal Reserve Governor Waller is inclined to support a rate cut in December, but is concerned about inflation progress. The market expects the probability of a 25 basis point rate cut by the Federal Reserve in December to rise from 66% to 74.5%, and anticipates a 31 basis point cut from the European Central Bank in December, totaling 145 basis points by the end of 2025.

French Prime Minister Barnier bypassed Parliament to force through the budget, with both the far-right National Rally and left-wing parties threatening to initiate a vote of no confidence, making the dissolution of the French government almost a certainty. French stocks and the euro both briefly fell over 1%, as investors flocked to German bonds for safety. The yield spread between French and German 10-year bonds expanded by 8 basis points to 89 basis points, marking the largest increase since June and approaching the widest level in twelve years.

Bank of Japan Governor Ueda Kazuho hinted that a rate hike is 'near,' with overnight index swaps indicating a 60% probability of a rate hike in Japan in December and close to a 90% probability of a rate hike before the end of January next year.

On the first trading day of December, the Nasdaq and S&P reached historic highs, while the Dow Jones fell after breaking 45,000 points, distancing itself from the peak. Tech stocks and chip stocks rose broadly, with Apple reaching a new high, and the China concept index up about 1%. Tesla surged over 4%, Intel rose over 5.9% before closing down, and Super Micro Computer briefly increased over 35%.

• Among the three major U.S. stock indices, only the Dow Jones fell. The S&P 500 index rose by 14.77 points, an increase of 0.24%, closing at 6047.15 points. The Dow Jones, closely related to the economic cycle, fell by 128.65 points, a decrease of 0.29%, closing at 44782.00 points. The Nasdaq, which has a large proportion of tech stocks, rose by 185.78 points, an increase of 0.97%, closing at 19403.95 points. The Nasdaq 100 index rose by 1.12%. The Nasdaq Technology Market Cap Weighted Index (NDXTMC), which measures the performance of the Nasdaq 100 tech component stocks, rose by 1.61%. The Russell 2000 small cap index, more sensitive to the economic cycle, fell by 0.02%. The volatility index VIX fell by 1.26%, closing at 13.34.

• U.S. sector ETFs had mixed performances. The semiconductor ETF rose by 2.37%, the global tech stock index ETF rose by 1.19%, while the tech sector ETF, internet stock index ETF, and gf csi all-share index consumer discretionary etf rose by approximately 0.9%. The banking ETF and regional bank ETF fell by about 0.9%, and both the financial sector ETF and energy sector ETF fell by about 1%, with the utilities ETF dropping by 2.15%.

• Among the 11 sectors of the S&P 500 index, most fell while few rose. The telecommunications sector rose by 1.45%, the consumer discretionary sector rose by 1.06%, the information technology/technology sector rose by 1.03%, the consumer staples sector fell by 0.10%, the healthcare sector fell by 0.13%, the materials sector fell by 0.20%, the industrial sector fell by 0.66%, the energy sector fell by 0.85%, the financial sector fell by 0.90%, the real estate sector fell by 1.44%, and the utilities sector fell by 2.08%.
  

• In terms of investment research strategy, jpmorgan predicts that the S&P 500 index is expected to further rise to 6200 to 6300 points before the end of the year, an increase of 3%-4% from last Friday's close of 6032 points. Analyst Andrew Tyler mentioned in the report that the positive macro environment, performance growth, and support from the Federal Reserve are reasons to maintain a bullish outlook, and he recommends utilizing market momentum to favor value stocks and cyclical sectors such as banks, auto manufacturers, transportation companies, and small-cap Russell 2000 index, while continuing to invest in the seven major tech stocks, datacenters, and semiconductors in the technology and telecommunications sectors.

• The "seven sister stocks" in technology all rose. Tesla rose by 3.46%, beginning to rollout the latest version of FSD V13.2. Meta platforms rose by 3.22%, microsoft rose by 1.78%, google A rose by 1.5%, and amazon rose by 1.36%. Apple rose by 0.95%, but ubs stated that demand for Apple's AI-functional smartphones is weak, with little market interest. Nvidia rose by 0.27%.

• Chip stocks lead the market. The phlx semiconductor index rose by 2.61%. The industry etf SOXX increased by 2.63%. Nvidia's double-long etf rose by 0.38%. Wolfspeed surged by 15.87%, marvell technology grew by 4.5%, asml holding increased by 3.62%, kla corp by 2.94%, and applied materials by 4.9%. Taiwan semiconductor's ADR rose by 5.27%. Broadcom climbed by 2.73%, qualcomm by 2.84%, on semiconductor by 3.98%, and Arm holdings by 4.51%. AMD rose by 3.56%. Micron technology increased by 0.61%. After surging over 5.9%, intel dropped 0.5% as the board of directors was dissatisfied with progress, leading to the retirement of intel's CEO following increased pressure.

• AI concept stocks had mixed results. SoundHound AI, in which Nvidia holds shares, fell by 3.87%, BigBear.ai dropped by 3.93%, dell technologies decreased by 1.37%, c3.ai declined by 2.66%, palantir fell by 1.03%, oracle dropped by 1.86%, snowflake decreased by 1.36%, bullfrog AI down 1.86%, whereas Serve Robotics rose by 5.17%, crowdstrike increased by 0.24%, super micro computer soared by 28.68%, with the company planning to replace its CFO after the special committee found no wrongdoing.

• Most china concept stocks rose. The nasdaq golden dragon china index increased by 0.98%. The china technology index etf (CQQQ) rose by 1.04%, the china concept internet index etf (KWEB) increased by 1.14%, and the ftse china 3x long etf (YINN) rose by 0.83%. The ftse A50 futures closed the overnight session up 0.08%, at 13274.000 points.
• Among popular china concept stocks, miniso rose by 14.04%. Daqo new energy increased by 6.94%, xpeng motors grew by 5.31%, Bilibili rose by 3.91%, meituan's ADR increased by 3.21%, zhihu rose by 3.06%, new oriental grew by 2.74%, pdd holdings increased by 2.51%, zeekr rose by 2.26%, tiger brokers went up by 1.9%, baidu rose by 1.73%, as baidu's tuotuokuaipao responded to being approved for hong kong's first autonomous driving license and has begun global business expansion. Fangdd network rose by 0.05%, netease increased by 1.59%, trip.com rose by 0.93%, jd.com increased by 0.24%, while nio dropped by 1.79%, vipshop fell by 0.51%, ideal automotive decreased by 3.72%, and alibaba dropped by 1.63%.
• Bitcoin futures at one point fell below 0.095 million usd, leading to a decline in most crypto concept stocks. Bitdeer Technologies fell by 3.01%, canaan dropped by 1.89%, riot platforms declined by 4.35%. The short-sold 'bitcoin holder' microstrategy fell by 1.85%, with the latest filings showing that since november 11, MSTR has purchased over 13.5 billion usd worth of bitcoin and currently holds approximately 38 billion usd in bitcoin. Mercurity fintech dropped by 11.3%, and the crypto 'meme stock' ideanomics fell over 81.8% at the start before rising by 36.36%, while the crypto exchange giant Coinbase increased by 2.09%.
• Most bank stocks fell. The dow jones kbw regional banking index dropped by 0.58%. The phlx kbw bank index fell by 1.22%. Among major wall street banks, jpmorgan and wells fargo & co each fell at least 1.17%, while bank of america, goldman sachs, and morgan stanley dropped by about 1%, and citigroup rose over 0.7%.
• Among other key stocks: (1) The world's third largest traditional automaker Stellantis saw its European and American shares drop over 6%, following news that the company's chief executive officer resigned. (2) Disney closed down 0.26%, with the Disney film "Moana 2" earning $0.221 billion in North America over the Thanksgiving long weekend (spanning five days), setting a new historical high for the same period.

"French political turmoil" weighed down European stocks, which opened collectively lower but ultimately closed higher. The French stock market opened down more than 1.2% but managed to recover, while the German stock index fell 0.12% before closing up about 1.6%, reaching a historical new high.

• The pan-European STOXX 600 index rose by 0.66%, closing at 513.61 points. The euro area STOXX 50 index increased by 0.88%. The FTSE Developed Europe Index rose by 0.71%.
• In individual stocks, wage conflicts escalated, with German unions announcing that approximately 0.066 million Volkswagen workers participated in the strike, leading Volkswagen to close down 0.07%.
• The Italian FTSE MIB index rose by 0.21%. The German DAX 30 index increased by 1.57%. The French CAC 40 index closed up 0.02%. The UK FTSE 100 index rose by 0.31%. The Spanish IBEX 35 index rose by 0.81%. The Netherlands AEX index increased by 0.67%.

Federal Reserve Governor Waller supports a rate cut in December, with the rise in the two-year U.S. Treasury yield narrowing. The French government's financing costs saw a V-shaped reversal, and German bond yields generally fell more than five basis points, as investors concerned about the stability of the French government sought refuge in German bonds.

• U.S. Treasuries: At the close, the yield on the benchmark 10-year U.S. Treasury rose by 1.54 basis points, closing at 4.1839%. At 23:04 Beijing time, it hit a daily high of 4.2420%, then quickly declined, hitting a daily low of 4.1724% at 00:32. The two-year U.S. Treasury yield increased by 2.25 basis points, closing at 4.1734%. Waller stated, "If the data is not unexpected, then it tends to support a rate cut in December. If the data is unexpected, then consider standing pat," after which it plummeted from 4.2% and hit a daily low.

• European Bonds: In the European market's late trading, the benchmark German 10-year treasury yield fell by 5.4 basis points, declining for the eighth consecutive trading day, reported at 2.034%. The 2-year German treasury yield dropped by 5.3 basis points to 1.899%. The UK 10-year treasury yield decreased by 2.9 basis points. The 2-year British treasury yield fell by 2.6 basis points. The French 10-year treasury yield rose by 2.2 basis points, reported at 2.918%, initially rose, then fell, and rose again at the end of the trading day. The Italian 10-year treasury yield fell by 1.0 basis point.

The US ISM manufacturing index exceeded expectations, boosting the USD index by over 0.6%. Rate hike expectations pushed the yen toward 149, while concerns about stagnation in the eurozone and the collapse of the French government led the euro to drop more than 1.1% at its lowest point. The offshore RMB fell more than 460 points and breached 7.29 yuan. Bitcoin futures dropped to 0.095 million USD, while XRP gained over 85% in the last five calendar days.

• USD: The USD index DXY rose by 0.62%, reported at 106.388 points, opening high and steadily climbing throughout the day, approaching the 107-point mark by 23:47 Beijing time. The Bloomberg Dollar Index increased by 0.49%.

• Non-USD currencies: The euro fell by 0.73% against the dollar to 1.05, having dipped to 1.0461 at 00:04 Beijing time, testing the November 22 low of 1.0335. The pound dropped by 0.61% against the dollar to 1.2656. The dollar rose by 0.62% against the Swiss franc to 0.8864. Among commodity currencies, the Australian dollar fell by 0.53% against the USD, and the New Zealand dollar decreased by 0.47% against the USD, while the dollar rose by 0.28% against the Canadian dollar. The Swedish krona fell by 0.86% against the USD, and the Norwegian krone decreased by 0.71% against the USD.
• Yen: At the close, the yen against the dollar was down 0.13%, at 149.58 yen, with a trading range during the day of 150.75-149.08 yen.
• Offshore Renminbi (CNH): The offshore renminbi (CNH) against the dollar fell 373 points at the close, at 7.2864 yuan, with overall trading during the day in the range of 7.2495-7.2956 yuan.
• Cryptos: The largest market cap leader bitcoin futures fell 2.00% at the close, at 96,400.00 USD, refreshing the daily low to 95,270.00 USD at 01:59 Beijing time. The second largest, ethereum, rose 1.07% at the close, at 3,670.50 USD, after refreshing the daily high to 3,816.50 USD at 11:03, it oscillated downwards. XRP (spot) rose 26.9% in the last 24 hours, accumulating over 92.85% since trading ended on November 28.

Supported by Chinese manufacturing data and the intensification of tensions in the Middle East, oil prices once refreshed the daily high with an increase of about 1.5% on Monday, but the strong dollar and uncertainty over OPEC+'s oil production policy dragged oil prices down during the session, ultimately stabilizing. Natural gas inventory during the winter heating season in the USA reached the highest level since 2016, and Henry Hub natural gas futures fell by over 4%.

• WTI: January crude oil futures closed up 0.10 USD, an increase of nearly 0.15%, at 68.10 USD per barrel. WTI surged over 1.6% before market open, breaking through 69.10 USD, and dropped over 0.4% reaching as low as 67.70 USD during midday trading.
• Brent: February crude oil futures closed down 0.01 USD, a decrease of 0.01%, at 71.83 USD per barrel. Brent rose nearly 1.5% before market open, pushing close to 72.90 USD, and dropped over 0.4% reaching as low as 71.50 USD during midday trading.
• On the news front, OPEC's crude oil production has increased for the second consecutive month, with an average output of 27.02 million barrels per day in November, up 0.12 million barrels per day month-on-month. The recovery in Libyan output, after the political crisis was resolved, accounted for the main increase, while Iraq has reduced production for the third consecutive month under OPEC's pressure, still slightly exceeding its quota. The UAE's production has increased to 3.26 million barrels per day, well above the limit.
• Natural gas: NYMEX January U.S. natural gas futures closed down 4.46%, at $3.2130 per million British thermal units. European benchmark Dutch TTF natural gas futures rose 2.45%, at €48.460 per megawatt hour. ICE UK natural gas futures rose 1.20%, at 121.000 pence per kilocalorie.

The U.S. dollar and U.S. Treasury yields rose together, causing precious metals and London industrial metals to generally decline, with spot gold dipping nearly 1.2%, weakening the upward momentum from the previous four trading days, although geopolitical uncertainties partially narrowed the decline.

• Gold: COMEX gold futures for February fell 0.73% at the end of the session, at $2661.60 per ounce. Spot gold dipped nearly 1.2% to test $2620 during the session, closing down 0.15% at $2639.08 per ounce.
• Silver: COMEX silver futures for March closed down 0.49% at $30.955 per ounce. Spot silver dipped nearly 1.8% to test $30 during the session, closing down 0.38% at $30.5098 per ounce.
• London industrial metals broadly fell, with nickel and tin prices down over 1%: copper fell $18, at $8992 per ton. COMEX copper futures rose 0.04%, at $4.1415 per pound. Zinc fell $26, at $3076 per ton. Aluminum fell $4, at $2590 per ton. Lead rose $4, at $2076 per ton. Nickel fell $210, down 1.32%, at $15693 per ton. Tin fell $340, down over 1.17%, at $28573 per ton. Cobalt remained flat, at $24300 per ton.
• Robusta coffee fell by about 11%, while New York cocoa once rose above $9,500, setting a new historical high.

The following are updates before 23:30 on December 2nd, Beijing time.

In December's opening, the Nasdaq, S&P, and Apple hit historic highs, while the Dow Jones turned negative after breaking through 45,000 points:

• Among the three major U.S. stock indexes, only the Dow Jones fell. The S&P 500 index once rose over 0.2%. The Dow Jones, closely related to the economic cycle, initially rose over 91 points before falling more than 197 points. The Nasdaq, which is heavily tech-focused, once rose nearly 0.9%.

• Industry ETFs in U.S. pre-market trading showed mixed results. The gf csi all-share index consumer discretionary etf and the semiconductors etf rose over 1%, while the internet stock index etf, global tech stock index etf, and technology industry etf rose by about 0.7% at most, and the energy industry etf fell by over 0.2%.
  

• The "seven sisters of technology" rose uniformly. Tesla once rose nearly 4%, Meta almost 2.5%, Amazon nearly 2.4%, Google A rose over 1.8%, Nvidia rose nearly 1.6%, Microsoft rose over 1%, and Apple rose over 1%.

• Chip stocks rose broadly. The phlx semiconductor index once rose more than 2%. Marvell Technology initially rose over 5.3% before narrowing its gains, Taiwan Semiconductor rose over 4% at one point, Wolfspeed rose over 4.7%, and Arm Holdings rose over 3.6% at its peak.

• AI concept stocks had mixed performance. Super Micro Computer initially rose nearly 16% before giving back some of those gains, as the company found no inappropriate behavior in its review results and decided to replace its chief financial officer. Serve Robotics once rose over 11.4%, BullFrog AI once rose over 2.3%, while the AI voice company SoundHound AI, which is held by Nvidia, fell over 5%, and Dell Technologies fell over 2.8% at one point.

• Most China concept stocks rose. The Nasdaq Golden Dragon China Index rose more than 1% before giving back most of its gains. Among popular China concept stocks, Miniso once rose over 15.7%, XPeng Motors rose over 9% at one point, Mengniu Dairy ADR rose over 4.8%, Tiger Securities rose over 3.6%, and Bilibili rose over 4.3%.
• Bitcoin futures briefly fell below $0.095 million, and crypto concept stocks mostly declined. The "meme stock" Ideanomics fell nearly 82% at first, but later halved its decline, while Mercurity Fintech fell about 15% at one point.
• In other assets: (1) The euro briefly fell over 1% as Le Pen's party supported a motion of no confidence against the French government. French Prime Minister Barnier pushed through the budget bill, and the government faces the risk of collapse. (2) The spread between the U.S. and German 10-year treasury notes yields may reach the widest closing level since 2019. The yield on U.S. 10-year treasury notes rose nearly 7.0 basis points at one point, hitting a daily high of 4.2381%; the yield on 10-year German bonds fell about 4.0 basis points, reported at 2.051%.

【Updates before 22:00】

ECB committee members hinted at a rate cut in December, leading to a rise in European stocks; AFP reported that the French government made concessions on budget issues, with the French stock market rising 0.18%. The euro continued to decline, while the dollar rose; U.S. treasury yields rebounded, putting pressure on gold.

On Monday, December 2, S&P Global released data showing that China's Caixin manufacturing PMI rose to 51.5 in November, a five-month high, as manufacturing activity improved for two consecutive months with the most significant improvement since June. Buoyed by Chinese data, iron ore prices continued to rise.

Currently, the market is waiting for the non-farm data to be released on Friday, hoping to find clues about this month's interest rate path.

In pre-market trading of U.S. stocks, china concept stocks rose and fell unevenly, with xpeng rising over 3%, ideal auto dropping over 4%, and jd.com rising over 1%. Stellantis fell over 8% in pre-market trading.

European stocks rose and fell unevenly, with the german dax index up 1.16%, france cac40 index up 0.18%, and europe stoxx 50 index up 0.62%.

The yield on the french 10-year treasury notes declined, currently reported at 2.891. The difference in yield between french and german 10-year treasury notes widened by 4 basis points at the open, to 85 basis points.

The euro continued to decline against the dollar, down 0.8% during the day, to 1.0496.

The usd index briefly rose by 0.5%, currently up 0.38%.

Spot gold fluctuated and fell, dropping over 1% at one point, almost erasing the gains from the previous four days, and is currently down 0.86% at 2627.13 dollars per ounce. Iron ore futures rose.

Intel rose over 5% in pre-market trading, announcing that chief executive officer Pat Gelsinger is retiring. Frank Yeary was appointed as the interim executive chairman, and the board of directors is searching for a new chief executive officer.

In pre-market trading, china concept stocks showed mixed results, with Xpeng autos rising over 3%, Li Auto falling over 4%, and jd.com rising over 1%.

Stellantis is down over 8% in pre-market trading following reports that the company’s chief executive officer has resigned.

European stocks are rising, with the german dax index up 1.16%, the uk ftse100 index up 0.37%, the france cac40 index up 0.18%, and the european stoxx 50 index up 0.62%. Previously, the european central bank council member and governor of the bank of greece, Stournaras, stated that the european central bank might continue to cut interest rates in December.

The yield on france 10-year treasury notes has decreased, currently reported at 2.891.

The usd index briefly rose by 0.5%, currently up 0.38%.

The dollar is rising while non-dollar currencies are falling.

Spot gold fluctuated and fell, dropping over 1% at one point, nearly erasing the cumulative gain from the previous four days, and is currently down by 0.86% to 2627.13 dollars per ounce. Several analysts have stated that there is a demand for adjustment in gold prices in the short term but remain optimistic about the long-term trend of gold prices.

Iron ore futures rose by 1.26%.