General Market Analysis – 26/11/24

US Stocks Rally Again – Dow Up 1%

It was a busy day in financial markets yesterday as investors reacted to updates on Donald Trump’s Treasury Secretary nominee and the possibility of a ceasefire in the Middle East. Scott Bessent’s nomination was well-received by markets, prompting a rally in stocks. The Dow led the way, closing up 0.99% on the day, followed by the S&P, which gained 0.30%, and the Nasdaq, which rose 0.27%.

Treasury yields fell sharply, with the 2-year/10-year curve inverting for the first time in a month. The 2-year yield dropped by 9.5 basis points to 4.274%, while the 10-year yield fell by 14.1 basis points to 4.269%.

Oil and gold prices experienced significant declines amid discussions of a potential ceasefire in the Middle East. Brent crude fell 2.87% to $73.01, while WTI dropped 2.23% to $68.94. Gold also erased much of last week’s rally, plunging 3.4% to close at $2,619.66 an ounce.

Gold Plunges on Haven Flight

What a difference a day makes in financial markets. Gold prices, which had surged over the past week due to geopolitical concerns, appeared poised to challenge record highs again. However, news yesterday of progress towards a Lebanon ceasefire by Israel sent the precious metal tumbling over 3%, marking its largest daily decline since early June.

The announcement that President-elect Donald Trump has nominated the market-friendly Scott Bessent as Treasury Secretary further calmed investor fears, amplifying gold’s decline. With recent price movements driven by geopolitical developments, traders anticipate further volatility in the days ahead.

Traders Expect More Volatility as Calendar Picks Up

Following a significant start to the trading week, traders are bracing for more volatility as geopolitical developments continue to influence markets and the macroeconomic calendar gains momentum.

Although the first two sessions of the day are relatively light in scheduled events, market participants are likely to focus on news updates. Later in the day, activity could pick up with the release of CB Consumer Confidence data, New Home Sales figures, and the Richmond Manufacturing Index. A key highlight will come towards the end of the session with the publication of the Federal Reserve’s Meeting Minutes.

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