November 25th Market Overview

Happy Monday everyone.

The market kicks off the holiday-shortened week with a positive response to President-elect Trump's appointment of Scott Bessent as Treasury Secretary.

Remember markets closed for thanksgiving and a half day on Friday. I’m on vacation for the week and will be sending the brief out a little after or before usual send times.


Let’s dig in….

Executive Summary

• Markets respond positively to Scott Bessent’s Treasury Secretary appointment
  

• Bond yields retreat with 10-year Treasury at 4.304% amid rate cut expectations
  

• EU-China EV tariff discussions signal potential trade tension resolution
  

• Notable sector rotation with Consumer Discretionary leading gains

Market Overview (as of 1 pm because I’m on a vacation)

Key Market Drivers

1. Treasury Leadership Transition: Bessent’s appointment brings market optimism, particularly regarding inflation management and fiscal policy direction
   

2. Federal Reserve Outlook: December rate cut probability increases to 56.2%, influencing both equity and bond markets
   

3. International Trade Development: Ongoing EU-China EV tariff negotiations present potential for trade tension resolution

Stock Spotlight

• $AAPL: Indonesia investment rejection impacts iPhone 16 sales trajectory; strategic focus remains on Chinese supply chain relationships

• $AMZN: Launches Quantum Embark initiative, expanding AWS capabilities into quantum computing sector

• $MSTR: Shares decline despite Bitcoin additions amid investment strategy examination

• $NIO: Positions for potential gains as EU-China EV export discussions progress

• $PLTR: Receives price target revision to $75, driven by government sector application growth

Big Name Updates

• $PG: Receives a “Buy” upgrade, buoyed by strong performance in China and organic sales confidence.
  

• $SNOW: “Outperform” rating driven by marketing enhancements and expected AI-revenue growth by FY2026.
  

• $HOOD: Varying analyst views, yet robust revenue outlook gains a “overweight” upgrade from Morgan Stanley.

Other Notable Company News

• $M: Releases preliminary Q3 revenue in line with forecasts but delays full financial results due to new accounting issues.
  

• $RKLB: Secures a government contract aimed at advancing semiconductor output, positioning it as a pivotal player in national industries.

Sector Watch

Bond Market

Bond yields move lower amid Bessent’s favorable economic outlook.

The 10-year Treasury yield stands at 4.304%, while the 2-year is at 4.316%, reflecting market confidence.

Policy Watch

Markets price in a 56.2% probability of a December Fed rate cut. The upcoming PCE price index release will provide key inflation data ahead of the Fed's December meeting.

Treasury yields remain responsive to policy expectations, with the 10-year at 4.304% and 2-year at 4.316%.

What to Watch

1. Thanksgiving Week Schedule and Patterns:

• Markets closed Thursday, November 28 for Thanksgiving

• Friday, November 29: Early closes (Equities 1:00 PM ET, Bonds 2:00 PM ET)

• Historical precedent indicates positive performance in shortened week

• Expect concentrated trading volume in reduced sessions

2. EU-China Trade Negotiations:

• Potential impact on global automotive supply chains

• Market implications for EV manufacturer valuations

• Trade sentiment effects on international markets

3. Federal Reserve Policy Evolution:

• Personal consumption expenditures price index release

• Rate cut probability adjustments

• Treasury market reaction to economic data

Thanks for reading 🙂

- John