Market News

Recall that Bitcoin moved higher with stocks on Wednesday, pushing back above $79,146 and into the old swing area that extends to $81,930. The move gave buyers a shot at taking back more control. To do that, they needed to get through the top of the area and stay above it. The rally stalled within the zone, and the price has since fallen back below $79,146.

Thursday. The risk-off crowd takes over

With the Nasdaq and chip stocks under pressure, Bitcoin has given back the rebound and moved back below its 100-day moving average at $76,950. The price was near $76,600 in the chart snapshot after testing the upper edge of the $74,925–$76,052 swing area. The 38.2% retracement of the summer rally comes in at $76,052, making that level the first…

Shares of Micron have taken an ugly turn today, dropping 12% and breaking support at the July low.

Chip stocks are down heavily as the market re-thinks the pace of the AI build out. There are a few reasons for the change in thinking:

1. The election showed US voters are heavily against data centers, with 40 of 41 direct votes on them failing and many candidates who were pro-data center losing
2. The market initially rewarded the hyperscalers for those votes, showing that stock prices will improve if they slow spending
3. Various reports show it will be impossible to power the pace of building data centers
4. If data centers can be built, public opposition will result in higher costs because companies will have to pledge to build all the power…

• Policy is somewhere around neutral
• The path on policy is straightforward, the issue is pace and gradual "makes sense"
• Do not anticipate inflation will accelerate but also don't see it as falling at this point
• The set of costs pressures of the psat 18 months, starting with tariffs, are broad based and firsm feel they have to pass them along
• Earnings remain strong and that is encouraging firms to invest and hold onto workers
• AI is a big part of current strong demand

Nice to see a Fed official calling it artificial intelligence rather than super intelligence. At least there's still some independence left. Meanwhile, the talk of 'gradual' hikes helps to lock in the December hike view, which is already at 82% but you could argue it means that the 62…

Crude oil futures fell sharply yesterday as traders weighed the chances of an end to the war with Iran. Senate Democratic Leader Chuck Schumer said Democrats would push to end the war and pointed to support from some Republicans. Crude was down close to 8% when I wrote about the move.

The headlines helped drive the selloff. The technicals gave traders a place to lean against. Yesterday, I highlighted three levels within 27 cents of one another. The 50% midpoint of the move up from the July low came in at $86.93, the 100-day MA at $86.81 and the 200-day MA at $86.66. A move below that area that could stay below would give sellers room to roam. A hold would give buyers a shot at a bounce. Yesterday’s crude oil analysis

Today’s low reached…

The Independent reports that Marco Rubio "is on resignation watch from both sides of the Atlantic in the expectation he will quit to lauch a bid to be the next US President".

The report cites "senior party sources in the US and senior figures in the UK government" and notes that he was plotting his exit even before the disasterous midterms. 

Rival JD Vance already distanced himself from Trump by tring to take an anti-war stance and blaming the Iran war for the Republicans loss. It may be tough for him and Rubio to cast themselves as opponents to war after defending it in the first 9 months of fighting.

The Independent said up to five members of Trump's cabinet are considering runs for President. As for Rubio, a source said he needs “distance…

Governor Bailey warned that another 25 bps rate increase could be justified if the conflict in Iran does not come to an end. Bailey stressed that the UK needs to limit the inflationary impact of the conflict, particularly given that domestic inflation pressures were already elevated before the energy shock.

However, he pushed back against suggestions that the BoE has acted too late, arguing that the latest decline in oil prices was encouraging but that policymakers cannot place too much weight on short-term developments without clear evidence of a genuine peace process.

He also refused to commit to a "two and done" outlook for interest rates, highlighting the uncertainty surrounding the conflict and noting that he hopes to have greater…

In the morning video above, I take a look at the three major currency pairs—EURUSD, USDJPY and GBPUSD—from a technical perspective. For each pair, I outline the bias, the risk-defining levels and the targets that would give either the buyers or sellers more control.

The Bank of England raised Bank Rate by 25 basis points to 4.00% as expected. All nine policymakers favored a hike, versus seven expected, but the formal vote on the quarter-point move was 8–1. Catherine Mann wanted a larger, 50-basis-point increase to 4.25%. GBPUSD traded as high as 1.3506 during the session and is now back at 1.3467, little changed on the day. Bank of England decision and minutes

Bank of England Governor Andrew Bailey said today’s quarter-point hike to 4% was…

• Prior was +1.4%
• Unit labor costs -0.7% vs +0.6% expected
• Prior unit labor costs +1.2%

On the face of it, these look strong disinflationary but these numbers are largely ignored by policymakers because they're notoriously volatile and hard to measure.

The US Bureau of Labor Statistics publishes its Productivity and Costs report quarterly. A preliminary estimate comes out roughly five weeks after the quarter ends, followed by a revised estimate about a month later that incorporates updated GDP and labor data.

The headline measure is labor productivity in the nonfarm business sector, defined as output per hour worked. It’s reported as an annualized quarterly rate and as a year-over-year change. Output is derived from GDP, excluding government,…

• Prior week initial claims 194K
• Prior week continuing claims 1.701M

Details

• Initial jobless claims (October 31) fell 6,000 to 189,000. Prior revised to 195,000 from 194,000.

• Initial claims four-week average fell 2,250 to 194,750. Prior revised to 197,000 from 196,750.

• Continuing claims (October 24) rose 23,000 to 1,718,000. Prior revised to 1,695,000 from 1,701,000.

• Continuing claims four-week average rose 1,000 to 1,709,500. Prior revised to 1,708,500 from 1,710,000.

• Insured unemployment rate (October 24) held at 1.1%.

U.S. initial jobless claims fell to 189,000 in the week ending October 31, the Labor Department reported. The four-week average also fell, pointing to fewer new filings even after smoothing out some of the weekly noise.

Continuing…

Hammack voted for a hike at the last meeting so her view is that 'gradual' means every meeting.

Other  comments:

• Gradual rate hikes less disruptive
• Mon pol needs to move to a restrictive stance
• Gradual hikes are best way forward
• Inflation is too high and moving in the wrong direction
• Hard to see USD losing reserve status

Given that she's a hawk, it's not surprise that she is advocating for rate hikes. The dollar is generally flat today and the market sees an 82% chance of a hike on December 9.

Articles:

• What Could Stop the Fed Raising Rates in December?
• Bank of England raises the Bank Rate to 4.00% as expected in a 9-0 vote
• Nasdaq futures rebound nearly 280 points. But buyers now face a crucial test
• Solana rallies as Republicans' midterm loss raises hopes of US-Iran war ending
• Oil prices tumble as Republicans' midterm loss sparks bets on Iran war exit; Trump still has the final say
• Macro pulse: Wall Street's post-election rally reveals a curious divergence
• Ethereum rallies on bets midterm defeat will push Trump towards Iran war exit. What's next?
• European stock market open: Stocks push higher across the board but US tech woes linger
• Gold's key breakout signals a potential trend reversal as Vance's comments fuel de-escalation bets
• Gold…