Welcome to the Markets Weekly Update, the column committed to delivering essential investing insights for the week and key events that could move markets in the week ahead.
Macro Matters
Fed Chair Jerome Powell Indicates Slower Rate Cuts as Economic Conditions Improve
Federal Reserve Chair Jerome Powell said the economy looks better now than when the central bank began cutting interest rates in September, which means the Fed can move more slowly in reducing borrowing costs.
"We wanted to send a strong signal that we were going to support the labor market if it continued to weaken," Powell said during Wednesday's New York Times DealBook Summit.
According to S&P and ISM PMI numbers released Wednesday, manufacturing and service prices continued to climb in November, according to S&P and ISM PMI numbers released Wednesday, but prices did not climb as much as estimated.
U.S. Manufacturing PMI Sees Improvement in November 2024 Despite Continued Contraction
The ISM Manufacturing PMI for the US increased to 48.4 in November 2024 from 46.5 in October, beating forecasts of 47.5. The reading pointed to another albeit softer contraction in the manufacturing sector. New orders rebounded after seven months of contraction (50.4 vs 47.1) and production (46.8 vs 46.2), employment (48.1 vs 44.4) and inventories (48.1 vs 42.6) contracted less. Also, price pressures eased (50.3 vs 54.8) and the supplier deliveries index indicated faster deliveries (48.7 vs 52). "Demand remains weak, as companies prepare plans for 2025 with the benefit of the election cycle ending. Production execution eased in November, consistent with demand sluggishness and weak backlogs. Suppliers continue to have capacity, with lead times improving but some product shortages reappearing", Timothy Fiore, Chair of the ISM Manufacturing Business Survey Committee said.
U.S. Job Openings Rise in October 2024, Beating Expectations
The number of job openings increased by 372,000 to 7.744 million in October 2024 from a downwardly revised 7.372 million in September and above market expectations of 7.48 million. Job openings increased in professional and business services (+209,000), accommodation and food services (+162,000), and information (+87,000) but decreased in federal government (-26,000). Regarding regional distribution, job openings rose in the South (486,000), and in the West (133,000), but fell in the Northeast (-195,000) and in the Midwest (-52,000). Meanwhile, the number of hires and total separations changed little at 5.3 million. Within separations, quits (3.3 million) and layoffs and discharges (1.6 million) changed little.
Smart Money Flow
Total U.S. Stock Market Cap hits $60 Trillion, almost double that of ALL Asian and European stock markets combined ($33 Trillion)
Bitcoin Soars Past $100,000 on Back of Pro-Crypto Nominations and Comparisons to Gold
President-elect Donald Trump has nominated crypto advocate Paul Atkins as SEC Chair, while Federal Reserve Chair Jerome Powell compared Bitcoin to gold in recent remarks on Wednesday.
These announcements sent Bitcoin soaring past $100,000, marking a more than 5% gain in 24 hours. Cryptocurrency-related stocks also rallied, with MicroStrategy rising over 8% and Coinbase and Riot Platforms both advancing more than 6%.
Bitcoin now outperforming Gold by the largest margin in history
Top Corporate News
Apple Shares Hit Record High, Anticipating Major Product Updates in 2025
Apple shares hit a record $239.59 on Monday, marking a sixth consecutive day of gains. This rally propelled its market capitalization to $3.62 trillion, outpacing Nvidia by about $220 billion. The stock has climbed 25.06% year-to-date.
As 2024 comes to a close, Apple is set to further expand its product line in 2025. Next year, Apple plans to launch major products, including the iPhone SE4, M4 MacBook Air, iPad 11, iPad Air, and a smart display.
Lululemon Raises Full-Year Outlook as International Sales Ease U.S. Market Weakness
Lululemon Athletica Inc. has raised its full-year outlook, driven by robust international sales, indicating that the premium activewear brand is successfully countering emerging competitors and managing slower consumer spending growth.
The company now projects its current fiscal year revenue to be between $10.45 billion and $10.49 billion, up from the previous estimate of $10.38 billion to $10.48 billion. In the third quarter, Lululemon experienced strong comparable sales growth in international markets, contrasted by a decline in the Americas.
Comparable sales rose 4% in the third quarter, reversing a trend of three consecutive quarters of slowing growth. CEO Calvin McDonald is optimistic about reigniting demand by broadening the product range and incorporating more relaxed styles. The company's strategic plan aims for annual revenue to reach $12.5 billion by 2026, driven by accelerated international expansion, increased online sales, and a wider array of men's products.
OpenAI Aims to Attract Investment by Revising 'AGI' Agreement with Microsoft
OpenAI is in talks to revise a clause that currently prevents Microsoft from accessing its most advanced models once the company develops "artificial general intelligence" (AGI). The move is aimed at unlocking potential future investments worth billions of dollars.
As per the existing agreement, Microsoft's access to OpenAI's AGI—defined as a "highly autonomous system that outperforms humans at most economically valuable work"—would be nullified. The determination of achieving AGI would be made by OpenAI's board.
Sources familiar with the discussions indicate that the start-up is considering eliminating this clause from its corporate structure. This change would allow Microsoft to continue investing in and accessing all OpenAI technologies, even after the development of AGI. No final decision has been reached yet, and various options are still being considered by the board.
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