Morning Macro 25th November
Equities continued their bounce (Nasdaq +2.64%, S&P500 +1.5%) as the market now prices 81% chance the Fed cut by 25bp on 10th December. Despite all the volatility the S&P500 sits just 3.4% from its all-time high. But having said that the buying is still retail, professional investors continue dumping U.S. equities, with institutional investors offloading $766 million of stocks last week, (4-week average now at $695 million).
Secondary data remains weak:
1. Dallas Fed mfg. bus. index actual -10.40 (est. -2, last -5.00)
2. U.S. foreclosure rates surge 32% YoY.
3. Apple cuts jobs across its sales organization in rare layoff
Jump Trading just started market making on Kalshi. Prediction markets have something most established venues don’t anymore: structural inefficiency. CME, Nasdaq, and others are building their own products.
Google’s new quantum chip (The Willow Chip) has just cracked a problem scientists have been working on for more than a century, and it did it in two hours. That is around thirteen thousand times faster than one of the most powerful supercomputers on the planet…. Google is now worth more than Amazon & Tesla combined… also news that Meta is now considering Google TPUs for their data centres in a deal worth billions. Google stock jumped 6.3% to new all-time highs while Nvidia sits 14% below its peak.
SoftBank (Japan, one of the most leveraged plays on OpenAI) is down 10.5% today, adding to the -10.9% decline seen on Friday. This takes the drawdown from the October highs to -44%
U.S. Q3 advanced GDP report has been cancelled.
With Oracle and CoreWeave CDS surging, other AI CDS are also nudging higher, nothing concerning for now, especially if the Fed cut 25bp and with seasonal year end buying, but the risks are there, and the market remains (very) concerned about how all this planned AI CAPEX will be funded. (Chart 1, Bloomberg)
There are two types of forecast: bad ones and lucky ones. Anyway, here we go:
- DEUTSCHE BANK SETS 2026 S&P 500 TARGET AT 8,000……….
- Morgan Stanley is now calling for a +1,000 POINT rally in the S&P 500 over the next 12 months, to 7,800.
- Goldman forecast Brent/WTI to $56/$52 averages for 2026, JPMorgan sees $58/$54 but says a global oil surplus COULD push Brent into the $30s by late 2027 if supply isn’t cut.
As Bitcoin falls the whales are buying (Chart 2, Glassnode, Bitwise Europe)
Gold and silver bounce off perfect support line. Silver here targets $54.48 double top breakout level (Chart 3, Bloomberg)
France November consumer confidence 89 vs 90 expected
Data today – U.S. PPI inflation, retail sales, house price index, pending home sales, Richmond fed manufacturing index
