Morning Roundup

By Mark Masterson on November 19, 2024

Good morning,

Below are the news items moving markets today:

---

Executive Summary

Markets are reacting this morning to the geopolitical headlines…..

The headlines:

• UKRAINE HITS RUSSIA WITH WESTERN-MADE MISSILES FOR FIRST TIME: REPORT
• RUSSIA PRESIDENT PUTIN APPROVES EXPANDED USE OF NUCLEAR WEAPONS IN DOCTRINE
• RUSSIA CONFIRMS ATACMS MISSILE STRIKE IN BRYANSK REGION: IFX
• UKRAINE MADE THEIR FIRST ATACMS STRIKE INSIDE RUSSIA – RBC UKRAINE
• RUSSIA WARNS OF POSSIBLE RESPONSE TO UKRAINE’S USE OF WESTERN MISSILES: PESKOV HINTS AT NUCLEAR OPTION – TASS
• THE US INDICATES THAT IT WON’T RESPOND TO THE RUSSIAN NUCLEAR DOCTRINE MOVE.
• RUSSIA’S FOREIGN MINISTER LAVROV: RUSSIA’S POSITION IS THAT NUCLEAR WAR WON’T HAPPEN.
• WHITE HOUSE NSC SPOKESPERSON: WE HAVE NOT SEEN ANY REASON TO ADJUST OUR OWN NUCLEAR POSTURE OR DOCTRINE IN RESPONSE TO RUSSIA’S STATEMENTS.

A few articles on the subject…..

• Putin pushes ahead with update Russia’s nuclear doctrine to expand conditions for atomic weapons use (Bloomberg, Reuters)
• Germany’s Scholz declines to send Ukraine long-range missiles (Politico)
• G20 softens stance on Ukraine war amid growing pressure for peace talks (FT)

Given the above headlines, the below economic data and Fed speakers are significantly less important.  None the less, here they are:

• BUILDING PERMITS (TUES.)

• HOUSING STARTS (TUES.)

• JOBLESS CLAIMS (THURS.)

• PHILLY FED MANUFACTURING INDEX (THURS.)

• EXISTING HOME SALES (THURS.)

• SERVICES PMI (FRI.)

• MANUFACTURING PMI (FRI.)

• CONSUMER SENTIMENT (FRI.)

As always, a full docket of Fed speakers this week:

• FOMC MEMBER SCHMID (TUES. 1:10PM)

• FOMC MEMBER COOK (WED. 11:00AM)

• FOMC MEMBER BOWMAN (WED. 12:15PM)

• FOMC MEMBER HAMMACK (THURS. 8:45AM)

• FOMC MEMBER GOOLSBEE (THURS. 12:25PM)

• FOMC MEMBER BARR (THURS. 4:40PM)

• FOMC MEMBER BOWMAN (FRI. 6:15PM)

The latest from Washington as well……

Washington:

• Trump transition team weighs Kevin Warsh for Treasury Secretary, Scott Bessent as NEC Director (Bloomberg, Reuters, FT)
• Trump chooses former Congressman and Fox Business host Sean Duffy as Transportation Secretary (Politico, Reuters)
• Sources say Trump is personally calling senators to press them to confirm former Gaetz to be his AG (Axios)
• Trump confirms deportation strategy will include national emergency and military (LA Times)
• Musk seen as wild card in the tech industry’s effort to find out where Trump will stand on AI regulation (Axios)

---

Articles of Interest:

• Markets:
  • Risk-aversion ramps up after warning from Russia that it has updated nuclear doctrine (Reuters, Bloomberg, Reuters)
  • Wall Street executives say Trump’s preoccupation with the stock market will override his economically dangerous ideas (Bloomberg)
  • S&P sees tight corporate spreads as signal of possible credit bubble (Bloomberg)
  • Long end of the curve extends selloff, 30Y yield hits highest rate since May (Bloomberg)
  • Goldman Sachs’ Kostin sees S&P 500 surging to 6500 by end of 2025 (Bloomberg )
  • Investors betting Japanese yen slide will force a hawkish shift at the BOJ, expecting rate hike next month (Reuters )
  • China and Japan offloaded large pile of Treasuries in Q3 (Bloomberg)
  • Beijing tells Wall Street that it pledges to open up markets, support Hong Kong amid geopolitical concerns (Reuters, Bloomberg )

---

Charts of the day:

With geopolitical tensions rising, gold is rising as well.

It’s at an interesting point.  It sold off enough to get oversold – as you can see below with the yellow highlights.

I thought it might bounce, then sell off further towards the 200 day moving average – following the red line path below.

However, it may just head higher from here as well – the blue arrow.

Time will tell, but either way, gold looks like a solid hold for clients.

---

Quote of the day:

Age is an issue of mind over matter.  If you don’t mind, it doesn’t matter

Mark Twain