General Market Analysis – 19/11/24

Tech Stocks Bounce on Tesla and Ahead of Nvidia – Nasdaq Up 0.5%

Tech stocks experienced a brief recovery in trading yesterday, as news of the Trump administration’s support for driverless cars saw Tesla shares surge by over 5%. Meanwhile, traders prepared for Nvidia’s key earnings report due tomorrow. The Dow Jones Industrial Average fell slightly, losing 0.19%, while the S&P 500 and Nasdaq recouped some of their recent losses, closing up 0.22% and 0.48%, respectively.

US Treasury yields edged lower, with the 2-year yield falling by 1.7 basis points to 4.284% and the 10-year yield decreasing by 1.2 basis points to 4.414%. The US dollar also pared back some of its recent gains, as the DXY fell 0.23% to 106.48. In commodities, oil prices rallied strongly, with Brent crude climbing 2.59% to $72.88 per barrel and WTI rising 2.55% to $68.73 per barrel. Gold also saw significant gains, rallying 1.8% to close at $2,008.19 per ounce.

Dollar Takes a Breather – But for How Long?

Markets consolidated yesterday, with the dollar retracing some of its recent gains as traders awaited the next catalyst for its potential move higher. The “Trump trade” has driven the greenback to annual highs, and the relatively quiet event calendar this week has provided an opportunity for pause. However, updates regarding the composition of Donald Trump’s new government have influenced specific sectors. For example, Tesla’s surge yesterday followed the announcement that the administration would review regulations for driverless cars—a move viewed by some as a reward for Elon Musk’s campaign support.

Foreign exchange traders are closely watching forthcoming financial appointments, as these could provide indications of potential inflationary policies. If the market perceives that these appointments might lead to stronger inflationary conditions, the dollar could resume its upward trajectory.

Event Calendar Picks Up for Traders Today

This week has been relatively subdued in terms of macroeconomic updates compared to previous weeks, but key data points and central bank updates could still shape longer-term investor sentiment. Today, the Reserve Bank of Australia’s Monetary Policy Meeting Minutes and the Bank of England’s Monetary Policy Report Hearings will be released. While neither is expected to provoke an immediate strong market reaction, they may offer important insights into the future direction of both central banks, particularly in response to recent economic developments.

Later in the day, the week’s first tier-1 data release, Canada’s CPI figures, is scheduled. This could prompt significant market movements, particularly for the Canadian dollar, which remains just below recent highs.

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