Silver’s Pullback Sees Long Bias Near Extreme Buy Territory

Commodity

Summary:

Markets were mixed as investors awaited PCE data and the Fed meeting. Stocks saw sharp individual moves, commodities stayed steady, and FX remained calm while sentiment shifted slightly across assets.

Indices: Mixed and Little Changed for Most

- U.S. equity index futures rise after a mixed session that saw only small gains for the S&P 500 (+0.1% to 6,857) as investors position for next week’s Fed meeting; Treasury yields climbed again, and market pricing (CME’s FedWatch) shows expectations for a 25bp cut out of the Fed running at roughly 87%

- Japan’s Nikkei 225 (-1.3%) takes a hit as talk of a BoJ rate hike picks up

Stocks: Intel Takes the Volatility Award

- Shares of Nvidia (NASDAQ:NVDA) close 2.1% higher though broader AI sentiment remained mixed, with investors rotating selectively into software names

- Intel (NASDAQ:INTC) (-7.5%) experiences a volatile session, this time dropping as it abandons plans to sell its networking and communications unit

- Meta (NASDAQ:META) shares climb 3.4% by the close following a Bloomberg report it’ll make major cuts on the metaverse front

- Meme stock movers: Kohl’s (-1.7%), Krispy Kreme (-2.8%), Opendoor (+9.2%), AMC (+2.2%), BlackBerry (+1.8%), Nokia (-1.6%), GameStop (-1.1%)

- Mixed session for crypto stocks: Coinbase (NASDAQ:COIN) (-1%), MicroStrategy (NASDAQ:MSTR) (-1.3%), Marathon Digital (NASDAQ:MARA) (-0.2%), Gemini Space Station (+10.2%), Bullish (+4.4%)

- Earnings:

Salesforce (NYSE:CRM): raises Q4 revenue guidance; shares close 3.7% higher

Snowflake (NYSE:SNOW): beats but guides lower on product revenue; shares plummet 11.4%

Five Below (NASDAQ:FIVE): beats on both earnings and revenue; shares climb 3.2%

nCino: beats and raises its guidance for next year, yet shares drop 4.8% by the close

Dollar General (NYSE:DG): beats on both earnings and revenue, and raises full-year guidance; shares jump 14%

Commodities:

Relatively quiet session for gold above $4.2K as traders await Friday’s PCE inflation data and next week’s Fed decision; rate-cut odds near 90% and a softer dollar keep the metal supported even as firmer Treasury yields cap upside, while silver suffered a sell off taking the gold/silver ratio back to a long-term support level

Calm climb for oil prices (WTI) settling in the $59s as stalled Ukraine peace talks, infrastructure attacks, and upcoming U.S. action against Venezuela keep the market undecided; Saudi OSP for January Arab Light to Asia cut to $0.6 over Oman/Dubai average

Commodity traders keep an eye on copper (LME) after its record high

FX/Central Banks/Crypto: All Calm on the FX Front

- Bitcoin hovers near the upper end of its bear channel as the bulls hope it can breach the line and stick; JPMorgan sees potential upside to $170,000 over the next 6–12 months if it trades like gold

- US Dollar Index partially rebounds off the lows but thus far stuck in the 98s with relatively calm movement on the FX front this morning

- European Central Bank’s Cipollone that inflation is basically under control (Bloomberg)

- Bank of England launched a system-wide stress test for the $16 trillion private equity and private credit sector

- Bloomberg report that key members of Takaichi’s government won’t try to prevent a Bank of Japan rate hike this month

Capital.com Client Sentiment: Small Change in Price…Small Change in Sentiment

- Indices: Small and mixed changes in price for key U.S. equity indices sees little notable changes in sentiment though they remain majority long in all four;

- Commodities: Reduce their long bias in gold though still heavy buy (73% from 77% yesterday), while the pullback in silver takes sentiment closer to extreme long territory (76% from 70%); price gains in WTI sees the bias fall out of extreme buy (77% from 85%) while a further climb in natural gas pushes traders further into heavy sell territory (68%)

- FX: Shifts in EUR/USD (slight buy 52% from a slight sell 52%) and GBP/USD (slight buy 54% from a slight sell 52%), and on the verge of doing so in AUD/USD (slight buy 51%)

Data: Mostly Bad

- U.S. weekly initial claims lower at 191K and so too continuing at 1.939m but Challenger’s job cuts for November over 71K and taking this year’s total to 1.17m; factory orders in September up 0.2% m/m below forecast; natural gas inventories fell by 12B

- Canada: Ivey PMI drops to 48.4, pointing to contraction from a previous expansionary 52.4

- UK Construction PMI for November sees a sharp drop to 39.4 from a previous 44.1 as contraction in the sector worsens

- Japanese household spending in October suffers a surprise contraction down 3% (vs +1% forecast)

Today:

- U.S. PCE price index (7pm Dubai time; but for the month of September), UoM’s preliminary consumer sentiment and inflation expectations, weekly rig count data out of Baker Hughes (10pm), consumer credit (12am)

- EZ Q3 GDP (2pm), German factory orders (11am)

Source: investing

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