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US stocks declined with underperformance in the Nasdaq 100 as the Tech sector was weighed on by weakness in Palantir (-8%) post-earnings, which also pressured other AI plays, such as NVDA (-4%). Palantir reported a stellar quarter and raised guidance, although some were concerned by their elevated valuation, whilst also adding to the downbeat picture was Michael Burry's latest 13-F showing him having bought 5mln put options in PLTR, and 1mln puts in NVDA. Given the pullback in PLTR shares after a solid report, other sectors with stretched valuations have also taken a hit, including uranium/nuclear and rare earth stocks. USD strengthened with the DXY surpassing the 100.00 level for the first time since the beginning of August as the reassessment of Fed rate cut expectations remained in the background and amid the risk-off tone across equities. Newsflow from the US was light, as the shutdown matched the longest on record (35 days), while there was a lack of Fed speak, although the data is to return on Wednesday, including ISM Services and monthly ADP jobs. Looking ahead, highlights include New Zealand ANZ Commodity Prices, Philippines CPI, Chinese RatingDog Services & Composite PMIs, Singapore Retail Sales, Supply from Australia & Japan, Indian Holiday Closure. More Newsquawk in 2 steps: 1. Subscribe to the free premarket movers reports 2. Trial Newsquawk’s premium real-time audio news squawk box for 7 days LOOKING AHEAD Highlights include New Zealand ANZ Commodity Prices, Philippines CPI, Chinese RatingDog Services & Composite PMIs, Singapore Retail Sales, Supply from Australia & Japan, Indian Holiday Closure. Click for the Newsquawk Week Ahead. US TRADE US stocks declined with underperformance in the Nasdaq 100 as the Tech sector was weighed on by weakness in Palantir (-8%) post-earnings, which also pressured other AI plays, such as NVDA (-4%). Palantir reported a stellar quarter and raised guidance, although some were concerned by their elevated valuation, whilst also adding to the downbeat picture was Michael Burry's latest 13-F showing him having bought 5mln put options in PLTR, and 1mln puts in NVDA. Given the pullback in PLTR shares after a solid report, other sectors with stretched valuations have also taken a hit, including uranium/nuclear and rare earth stocks. SPX -1.16% at 6,773, NDX -2.07% at 25,436, DJI -0.53% at 47,086, RUT -1.76% at 2,427. Click here for a detailed summary. TARIFFS/TRADE White House aides reportedly strategised on how to reconstitute President Trump's tariff regime if the court rules that he exceeded his authority, while they’re ready to fall back on a patchwork of other trade statutes to keep pressure on US trading partners and preserve billions in tariff revenue, according to Politico. White House said US President Trump feels positively about the relationship with India and trade teams continue to be in serious discussions, while it added that President Trump and Indian PM Modi speak frequently. White House said it is not interested in selling to China at this time regarding NVIDIA (NVDA) Blackwell chips. Nexperia said Chinese entities have stopped operating within the established corporate governance framework, according to Reuters, citing a letter to customers. It stated that the letter should be understood as a formal force majeure notification, in addition to the force majeure notification dated October 22nd, while it cannot guarantee quality, authenticity of chips delivered from China with a week code of 42 and after. Furthermore, it stated that until they gain oversight over the supply chain at the Dongguan site, they cannot see if and when products will be delivered, while they are actively working to re-establish governance over this site and ramp up capacities. European Commission previously stated that it welcomed the constructive approach shown by the Netherlands and China over Nexperia, and said industry indications are that China has been engaging with EU companies to restore a partial flow of chips, while it welcomes the development to prevent a worst-case scenario and creating time to find a solution. Japanese Trade Minister Akazawa relayed strong concern to China on Nexperia issues and asked for suitable steps. China's MOFCOM will host a series of events dubbed "Big market for all: Export for China", while the series aims to make China the best export destination. Chinese Foreign Minister Wang told his Estonian counterpart that China is willing to negotiate the signing of an FTA agreement with the EU. EU Commission said the EU and China are committed to talks about rare earth licensing facilitation measures and general licenses. Brazilian President Lula said negotiators are ready for a new meeting with US officials, and he could travel to the US if required, while he will call US President Trump again if a meeting between Brazilian and US negotiators is not scheduled by the end of COP30. NOTABLE HEADLINES US Transportation Secretary Duffy warned that the US DoT may need to close some airspace if the government shutdown continues. US House Speaker Johnson said they will not be doing a December Continuing Resolution, and that putting the CR into January makes sense. Outlines of a potential deal to end the US government shutdown are reportedly starting to take shape, although the talks are very fragile at this point and there’s still a long way to go, according to Punchbowl, which noted that "Senators and aides involved in negotiations tell us some Senate Democrats are warming to Thune’s offer to open the government and then hold a vote by a date-certain on renewing the extending the expiring Obamacare subsidies." FX USD strengthened with the DXY surpassing the 100.00 level for the first time since the beginning of August as the reassessment of Fed rate cut expectations remained in the background and amid the risk-off tone across equities. Newsflow from the US was light, as the shutdown matched the longest on record (35 days), while there was a lack of Fed speak, although the data is to return on Wednesday, including ISM Services and monthly ADP jobs. EUR gave up ground to the firmer buck and dipped beneath the 1.1500 handle amid a lack of drivers from the bloc. GBP underperformed after UK Chancellor Reeves's pre-Budget speech failed to alleviate fiscal concerns as she refrained from reiterating the election pledge not to put up income tax, VAT or National Insurance. JPY outperformed against its G10 counterparts with the haven currency supported by the broad risk-off mood. SNB President Schlegel said inflation should increase in the quarters ahead. SNB Board Member Tschudin said SNB monetary policy is aimed at ensuring price stability, while interest rates are where they should be, and they will only use negative rates when necessary. FIXED INCOME T-notes saw a mild flight-to-quality bid as stocks were pressured. COMMODITIES Oil prices declined, albeit settled well off earlier troughs with risk-averse sentiment weighing on the complex. US Private Energy Inventory Data (bbls): Crude +6.5mln (exp. +0.6mln), Distillate -2.5mln (exp. -2mln), Gasoline -5.7mln (exp. -1.1mln), Cushing +0.4mln. Saudi Aramco CEO said most of their capital is going into gas growth, while they are looking into lithium and at first processing plants by 2027. Libya's Oil Minister said there is a target to increase oil output to 2mln BPD (currently c. 1.4mln) in the next five years. Chile's Codelco sees 2025 copper production at 1.31-1.34mln metric tons (prev. estimate of 1.34-1.37mln metric tons), while the Codelco CEO said he is optimistic about copper prices and will take three years to normalise operations at the El Teniente mine. GEOPOLITICAL MIDDLE EAST Israeli IDF posted that Hamas has once again violated the ceasefire and that Israeli forces will remain deployed in accordance with the ceasefire agreement and will continue to operate to remove any immediate threat. Israel Broadcasting Corporation reported that Tehran is preparing its proxies in Iraq for the possibility of carrying out operations against Israel if a new conflict breaks out in the region", while it also noted that Tehran has recently been working to shift its military centre of influence from Lebanon, Syria and Gaza to Iraq, according to Sky News Arabia. Iranian government spokeswoman said they will never move towards building a nuclear bomb, according to Sky News Arabia. RUSSIA-UKRAINE Ukraine said its drone hit the Lukoil refinery in Nizhny Novgorod, Russia. OTHER US President Trump’s administration has developed a range of options for military action in Venezuela, including direct attacks on military units that protect President Maduro and moves to seize control of the country’s oil fields, according to NYT citing US officials. The report noted that President Trump has yet to make a decision about how or even whether to proceed, and officials said he was reluctant to approve operations that may place American troops at risk or could turn into an embarrassing failure. However, many of his senior advisers are pressing for one of the most aggressive options of ousting Maduro from power. North Korean Supreme Leader Kim Jong Un is willing to meet US President Trump, with North Korea likely seeking a summit with the US in March, according to Newsis citing South Korean press. ASIA-PAC NOTABLE HEADLINES RBNZ Financial Stability Review stated that loan defaults have picked up, although they remain low compared to during the GFC, while banks remain well placed to manage the current uncertainty. RBNZ said strong lending standards, including LTV limits, have helped to restrict the amount of high-risk lending in the system, as well as noted that as a small open economy, New Zealand would be exposed to any impacts on global economic activity. EU/UK NOTABLE HEADLINES UK Chancellor Reeves said they will make the choices necessary to deliver strong foundations for the UK economy; important choices that will shape the future of the UK for years to come, while she added that inflation has been too slow to come down and they will do what is right, not what is popular. Furthermore, her pre-Budget speech refrained from reiterating the election pledge not to put up income tax, VAT or National Insurance and said she will set out the individual policies at the Budget, while she noted that today is about setting the context for the Budget on November 26th and that "people can see the global challenges". ECB's Lagarde said currency changeovers can produce a temporary uptick in inflation. ECB's Rehn said he will run for ECB vice presidency and noted that inflation risks are two-sided, while uncertainty has eased but is still considerable. Rehn added that Euro-area growth remains sluggish but resilient, and it is crucial to maintain full flexibility in decision-making. Loading...
