Even though Nvidia fell more than 2% yesterday, the overall picture of the stock market showed upward movement. The push upwards is due to a fall in crude oil after the OPEC+ meeting scheduled for this weekend was postponed.
US Weekly Unemployment Claims Came Out Stronger Than Expected
US economic data was released yesterday ahead of today's Thanksgiving holiday.
Both the weekly unemployment claims figure, which was published a day earlier, and the University of Michigan consumer sentiment figure for November were stronger than expected.
The weekly unemployment claims figure was 209K compared to 221K expected. The University of Michigan index showed 61.3 as opposed to the expected 60.4, although lower than 63.8 the previous month.
The University of Michigan's inflation expectations also showed no improvement with 1-year expectations rising to 4.5% from 4.2% the previous month.
In short, these figures do not follow the same line of slowdown of the economy or decline in inflation as recently published data.
Investors are Keen to See the Result of the Personal Consumption Expenditure Next Week
The market’s reaction to this data has been minimal, partly because it has to do with highly volatile economic figures. This kind of data can vary significantly in subsequent publications. Another reason for this mild reaction is the fact that the market has already assumed that the Federal Reserve has reached the end of its interest rate hike cycle. The most important figure in this sense will be that of the Personal Consumption Expenditure. It is the inflation data preferred by the Fed and it will be published next week.
Treasury Yields Rebounded and the Stock Market Performed Well
Treasury yields rebounded slightly yesterday from the previous day's lows when Fed minutes were released. The minutes showed that Fed officials were understood to assume an end to rate hikes. The 10-year bond was trading 3 bps higher at 4.43%.
The stock market performed well despite the rise in market interest rates and the decline of the technology company Nvidia. Even though the company beat analyst estimates in yesterday's earnings release, it warned about the weakening of its sales in China. Its stock ended up falling more than 2%.
The Nasdaq index advanced nearly 1% and the S&P500 0.50%. One of the reasons for this more optimistic sentiment was the drop in the price of crude oil.
Nvidia one hour chart, November 23, 2023. Source: CAPEX.com WebTrader
WTI Crude Oil Fell More Than $3 on Rescheduling of OPEC+ Meeting
WTI crude oil fell more than $3 during the session. This fall came after the announcement that the OPEC+ meeting scheduled for this weekend was postponed until the end of next week. Some industry analysts expected an announcement of additional production cuts that would push up the price of oil. The meeting’s delay is interpreted as a lack of concern on the part of the producing countries about the current price level. This, together with an EIA inventory figure published yesterday much higher than expected (8.7M vs 1.1M), ended up putting downward pressure on the price of crude oil.
Key Takeaways
- US weekly unemployment claims came out stronger than expected at 209k.
- The University of Michigan consumer sentiment figure showed 61.3 compared to the expected 60.4.
- Investors are waiting for the Personal Consumption Expenditure data next week.
- Yesterday the 10-year bond was trading 3 bps higher at 4.43%.
- Nvidia fell more than 2%.
- The Nasdaq index rose nearly 1% and the S&P500 by 0.50%.
- After OPEC+ moved its meeting to next week, WTI crude oil fell more than $3.
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Sources: Bloomberg, Reuters
