A potentially dangerous situation is unfolding in the southern Red Sea, a critical maritime chokepoint in the global shipping supply chain.

The British military’s United Kingdom Maritime Trade Operations Center (UKMTO) announced Friday morning that a commercial vessel is “listing astern” in the Bab el-Mandeb Strait about 105 nautical miles northwest of Al Hudaydah, Yemen. 

“A military source indicates that a merchant vessel is listing astern and poses a hazard to shipping in the Bab el-Mandeb Strait,” UKMTO wrote on X, adding, “The crew has been evacuated by coalition forces to Djibouti.” 

UKMTO said all commercial vessels transiting the maritime chokepoint have been cautioned and asked to report any “suspicious activity.” 

UKMTO has not provided any information on what caused the ship to “list astern.” This could result from a cargo shift, adverse weather conditions, or a potential attack by Iran-backed Houthis.

Earlier this week, US Central Command confirmed two US Navy destroyers intercepted missiles and drones targeting three US merchant vessels in the Gulf of Aden near the Bab al-Mandab Strait. 

US Warships “Successfully” Combat Missile Attack On Merchant Vessels In Critical Maritime Chokepoint https://t.co/rJb3zZI1sO

— zerohedge (@zerohedge) December 2, 2024

The Washington Institute’s Noam Raydan reported in October that Houthi rebels launched 80 attacks on commercial ships in the critical maritime chokepoint in the southern Red Sea, sinking two ships and killing four sailors. This has since sparked a global supply chain crisis, pressuring container rates higher. 

*This is a developing story.

Authored by T.J.Muscaro via The Epoch Times,

The National Aeronautics and Space Administration (NASA) confirmed that its first manned flight of the Artemis Moon program won’t launch until April 2026, and the following mission—the first landing on the Moon since 1972—won’t happen until mid-2027.

This is the second time NASA has delayed the launch of Artemis II.

It was previously scheduled to launch in November 2024, and it was then pushed back to September 2025. NASA was targeting a 2026 launch for Artemis III.

NASA Administrator Bill Nelson announced the new schedule during a press conference on Dec. 5, emphasizing that it was received with unanimous support from the administration’s executive council and keeps the U.S. space program on track to beat communist China’s goal of landing by 2030.

However, he also stressed that the decision was made out of safety.

“The safety of our astronauts is always first in our decisions,” he said. ”It is our North Star. We do not fly until we are ready. We do not fly until we are confident that we have made the flight as safe as possible for the humans on board.

“We need to do this next test flight, and we need to do it right, and that’s how the Artemis campaign proceeds.”

The new launch schedule comes after a lengthy investigation was conducted into unexpected char and erosion discovered on the heat shield of Artemis I’s unmanned Orion capsule upon its return.

The capsule selected for Artemis II has an identical heat shield. But NASA’s leadership told reporters that its investigation showed that it was still reusable so long as the re-entry trajectory is adjusted.

That re-entry into Earth’s atmosphere slows the spacecraft down from near-25,000 mph to about 325 mph before parachutes are deployed, generating an exterior heat of nearly 5,000 degrees Fahrenheit, according to NASA.

An updated heat shield will be installed on Orion capsules, starting with Artemis IV.

NASA officials chose to alter the re-entry for Artemis II and III because ripping off the current heat shield and installing a new one would set the Moon landing back nearly another full year.

There are other issues with the capsule still being sorted as well, specifically with the life support system.

However, officials confirmed the heat shield decision allows the Moon rocket to start getting stacked together at NASA’s vehicle assembly building at Kennedy Space Center in Florida in anticipation of the spring 2026 launch.

On top of the investigation, Nelson reminded reporters that the timeline of the Artemis program is dependent upon a vast supply chain of international and commercial partners.

The European Space Agency (ESA) is building Orion’s service module, which is being built by Lockheed Martin.

Boeing is tasked with building the behemoth launch vehicle known as the Space Launch System.

SpaceX and Blue Origin are building the lunar landers.

New spacesuits are coming from Axiom Space, and Japan’s space agency JAXA is providing the next lunar rover.

“We must have a shared sense of urgency among all these partners, and I think we have that,” Nelson said, with that urgency focused on landing human beings on the Moon’s south pole—a region known to have water—before the CCP.

While the CCP plans to establish its own presence on the Moon does not specifically target the same landing area, NASA’s administrator does not want to take a chance on them claiming the location for themselves.

He referenced the CCP’s recent aggressive actions against the Philippines over territorial claims in the South China Sea.

“I wish that China could be someone that we could cooperate with, and maybe there will be an opportunity in the future,” he said.

“I hope so. But given the fact of the history of how the Chinese government has operated up until, including recently, I don’t want that to occur on a very important part of the moon.”

Artemis II will be a fly-by mission to the moon crewed by NASA astronauts Reid Wiseman, Victor Glover, and Christina Koch, as well as Canadian astronaut Jeremy Hansen.

It will complete the necessary objectives ahead of Artemis III.

Meanwhile, landing capabilities are dependent upon the success of Elon Musk’s SpaceX Starship.

NASA officials said the Starship needs to fly several times before it’s deemed ready for Artemis, including completion of an unmanned Moon landing and a refueling demonstration in Earth orbit.

Wiseman expressed his optimism about the SpaceX starship and the Artemis program during the press conference, recounting how he felt watching the starship successfully launch and return to the launch tower.

“I had just seen our booster,” he said.

”I had just seen the Orion spacecraft. I’m now watching Starship Six test flight. All the elements are there for humans on the Moon, and all the elements are there to push us onto Mars in the very future, near future. And I just felt it in my soul.”

Nelson also expressed confidence in SpaceX’s progress and the program as it is passed to a new administration and new NASA administrator, Jared Isaacman.

Nelson said he spoke to Isaacman on Dec. 4 congratulating him on his nomination, and that he looked forward to meeting with him.

Isaacman did not respond to The Epoch Times by publication.

Something unprecedented just happened in the NATO and EU member country of Romania – a top court on Friday annulled the first round of the country’s presidential election. Essentially there will now be a ‘do over’ election.

The Constitutional Court made the decision even as voting is still underway in the diaspora. “The electoral process for the election of the President of Romania will be resumed in its entirety, with the Government required to set a new date for the election of the President of Romania as well as a new calendar program for carrying out the necessary actions,” the court said in a statement.

The court decided “to annul the entire electoral process for the election of the President of Romania… to ensure the correctness and legality of the electoral process” – in a controversial ruling which has simply never happened.

Calin Georgescu, the widely dubbed ‘far-right’ contender, came out on top in a first round of voting in a ‘shock’ outcome which left political opponents claiming Russian election interference.

Apparently the ‘smoking gun’ is related to mere social media posts on platforms like TikTok. “The Constitutional Court’s unprecedented decision — which is final — came after President Klaus Iohannis declassified intelligence on Wednesday that alleged Russia ran a sprawling campaign comprising thousands of social media accounts to promote Calin Georgescu across platforms like TikTok and Telegram,” The Associated Press details.

Georgescu emerged top of the ballot after the Nov.24 first round vote, despite declaring no campaign spending, and was set to enter a run-off originally scheduled for Sunday against reformist Elena Lasconi of the Save Romania Union party.

Contributing to the dossier examined by the court on the alleged Russian election interference included the Romanian Intelligence Service, the Foreign Intelligence Service, the Special Telecommunication Service and the Ministry of Internal Affairs, AP has noted further.

Georgescu’s nationalist rhetoric has proven ultra popular as social media videos featuring him have racked up millions of views. But at least much of this would likely be genuine and organic, given that the vast majority of the population leans ultra-conservative.

Also Romania has one of the highest church attendance rates in Europe, with the dominant religion being the very traditional Romanian Orthodox Church, which is also in communion with the Russian Orthodox Church.

This is the wildest thing I’ve ever seen. The EU-NATO establishment is on a putschist spree. https://t.co/IXzvptl8Qg

— Thomas Fazi (@battleforeurope) December 6, 2024

Russia on Friday vehemently denied that it is interfering in Romania’s election. This as Western media is already labelling Georgescu as “pro-Russian”. Similar controversy has lately engulfed politics in Georgia as well, where pro-EU street protests have continued.

“The campaign for the Romanian presidential election… is accompanied by an unprecedented outburst of anti-Russian hysteria,” Russian foreign ministry spokeswoman Maria Zakharova told the press in response to the reports. “More and more absurd accusations are being made by local politicians, officials and media representatives…,” she said. “We firmly reject all hostile attacks, which we consider absolutely groundless.”

The European Commission at the same time says it’s closely monitoring the TikTok platform related to Romania’s election. NATO and Washington are also watching closely, given a Georgescu victory could have huge implications for the future of Western military bases and units inside Romania, on NATO’s so-called Eastern flank:

Romania is a serious military power, which is why the risk that NATO-skeptic, pro-Russia candidate Călin Georgescu will become its president next Sunday is confounding the alliance.

The country of 19 million has been a NATO member for two decades, and is the site of an airbase that is expanding to be the bloc’s biggest in Europe. It borders Ukraine; stares across the Black Sea at Russia-occupied Crimea; has sent arms and ammunition to Kyiv; and hosts a U.S. Aegis Ashore missile defense system in Deveselu, in southern Romania, where both Romanian and U.S. forces are based.

But those international ties are deplored by Georgescu, who has condemned the Deveselu missiles as a national “shame,” campaigned for ending Romanian aid to Ukraine, and called for “Russian wisdom” in shaping foreign policy.

His rhetoric is similar to Hungary’s Viktor Orban or Italy’s Meloni…

This is why they are trying to censor and imprison Călin Georgescu

He is the first presidential candidate in decades whose priority is the well-being of the Romanian people https://t.co/LPUtSBtqti pic.twitter.com/6icQRwQvot

— Daily Romania (@daily_romania) December 5, 2024

But depending on how convincing the alleged evidence in possession of Romanian intelligence is, this is more likely just another example of European officials screaming ‘Russian interference’ when a politician emerges who they don’t like. It is perhaps the next round of election which will be the most telling. It remains unclear whether the ‘evidence’ will be made public, or if it will be convincing to the general Romanian public.

By Irina Slav of OilPrice.com

Chevron has reduced the amount of capital expenditure it will allocate for its operations in the Permian Basin next year, the company said in an update.

The company said it planned to spend between $4.5 billion and $5 billion on production in the Permian, “as production growth is reduced in favor of free cash flow.” Total upstream spending for 2025 is planned at $13 billion, with the company’s total capex budget set in a range of between $14.5 billion to $15.5 billion.

This would be a decline from this year’s capex budget of $15.5 billion to $16.5 billion. When the affiliate capex budget is included, the 2025 budget represents a $2-billion reduction on the 2024 number, Chevron reported.

The company remains focused on its home operations, with the remainder of its U.S. budget to be split between operations in the DJ Basin and the Gulf of Mexico. In the latter area, Chevron said it expected daily production of some 300,000 barrels from its deepwater wells by 2026.

Chevron also said in its update that it will book charges of between $1 billion and $1.5 billion in the fourth quarter, most of it attributable to restructuring costs related to plans for achieving structural cost cuts of $2 billion to $3 billion by 2026.

“We continue to invest in high-return, lower-carbon projects that position the company to deliver free cash flow growth,” chief executive Mike Wirth said, highlighting the priorities of the company.

He also pointed out that “The 2025 capital budget along with our announced structural cost reductions demonstrate our commitment to cost and capital discipline,” hitting the second key point for shareholders in the energy industry.

The update could be seen as the latest piece of evidence that despite President-elect Trump’s plans for a return to a “Drill, baby, drill” mentality in the oil and gas industry, companies are wary of it and remain focused on cash and shareholder returns above production growth.

TikTok is back on the chopping block after a three-judge panel on the US Court of Appeals in Washington DC upheld a new law requiring its Chinese parent company, ByteDance, to sell the video-sharing app by January 19th.

The decision leaves the Supreme Court as the company’s last hope for stopping the law from taking effect.

D.C. Circuit upholds law that will result in @tiktok_us ban unless the app is divested by ByteDance pic.twitter.com/sUg1oUfccL

— Wendy Davis (@wendyndavis) December 6, 2024

President-elect Donald Trump, whose inauguration will take place one day after the ban, has spoken out against the ban – saying that it would mainly benefit Mark Zuckerberg-owned Meta.

The US Government has alleged that TikTok allows Beijing to collect data and spy on users, and that it’s a conduit to spread propaganda. China and the company have denied these claims, while free-speech advocates say the USG is trying to punish a platform they can’t control.

Chili’s Scores Win With TikTok

Goldman analysts have uncovered a fascinating new trend in the casual dining industry: Cash-strapped consumers (GenZers) are flocking to the American chain Chili’s Grill & Bar. 

Chili’s, Brinker International’s core brand (close to 90% of revenue)—trading on the NYSE under the ticker “EAT”—has outperformed the broader full-service restaurant industry. 

On Thursday, Goldman’s analysts Christine Cho and Teddy Farley told clients that the brand is experiencing a “clear turnaround.” 

The analyst said Chili’s revamped its core menus and offered new pricing strategies, which are now paying off. 

They continued:

Focus on Core Menus and differentiated pricing strategy paying off. Company has reduced roughly quarter of Chili’s menu in the last 2.5 years and shifted focus to the Core 5 SKU categories (Burgers, Crispers, Fajitas, Margaritas, and newly added Triple Dippers) which now comprises 58% of Chili’s revenue.

An unexpected twist in all the new traffic: Chili’s social media team appears to have captured the hearts and minds of GenZers… 

The analysts provided more color on this: 

This has enabled the company to simplify kitchen operations, improve throughput and improve the guest experience. Moreover, successful menu/ marketing strategy has drawn a new generation of younger guests into the stores, who tends to spend more per visit and to visit more frequently

Chili’s is winning the eatery TikTok promo wars:

For instance, Triple Dipper (mix-and-match of 3 appetizers served with dipping sauces) received 200mn views on a viral Tik Tok campaign this year, driving sales up 70% YoY and contributing to c.11% of sales.

Traffic Surge

With Gen Z enamored by Chili’s, foot traffic at its restaurants nationwide has surged in the second half of the year. There is a notable negative divergence in traffic and spending compared to other major FSRs.

Sales growth at Chili’s has also picked up compared with other FSR brands. 

However, GenZers are likely just coming in for the deals. 

Increased sales and foot traffic (thank the TikTok promo) at Chili’s have sent EAT shares parabolic. 

The analysts maintain a “Buy” rating on EAT with a $150 price target. 

Take note other FSRs!

After the October hurricane-driven debacle which sent last month’s payrolls print to the lowest in years, at just 12K, traders were expecting a solid bounce today, with many whispering a print that would come above the consensus estimate of 220K… and they were right: moments ago the BLS reported that in November, payrolls growth surged to 227K, the second highest print since March (after the upward September revision).

Unlike previous month, most of which had all seen downward revision, the previous two months were revised higher, September was revised up by 32,000, from +223,000 to +255,000, and the change for October was revised up by 24,000, from +12,000 to +36,000. With these revisions, employment in September and October combined is 56,000 higher than previously reported.

The rebound reflects swings related to the end of the Boeing strike and the hurricanes that skewed the October data; hiring was led by health care and social assistance, as well as leisure and hospitality and government (see below)

Those looking for a clear indication whether the Fed will keep cutting or halt its easing cycle in two weeks, will have to wait because the rest of the jobs report was mixed: on one hand, unemployment rose from 4.1% to 4.2%, and above the 4.1% estimate (with Black unemployment at 6.4% rising in November, while the jobless rates for adult men (3.9 percent), adult women (3.9 percent), teenagers (13.2 percent), Whites (3.8 percent), Asians (3.8 percent), and Hispanics (5.3 percent) showed little or no change over the month)…

…but hourly earnings also rose, rising 0.4% MoM in November, above the 0.3% estimate, with annual wage growth flat at 4.0%, also above the 3.9% estimate, both indicating that wage growth pressures remain.

We should note that while the Establishment report gain of 227K payrolls was solid, the Household survey indicated a much bigger weakness, with the number of people employed tumbling by 355K to 161.141 million.

Tied to that, both the full-time and part-time series showed a notable drop (since these track the Household Survey), with full-time jobs dropping by 111K and part-time jobs down by 268K.

Taking a closer look at the report we find the following:

• The number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 1.7 million in November. This measure is up from 1.2 million a year earlier. In November, the long-term unemployed accounted for 23.2 percent of all unemployed people.
• The labor force participation rate, at 62.5 percent, changed little in November and has remained in a narrow range of 62.5 percent to 62.7 percent since December 2023. The employment-population ratio, at 59.8 percent, also changed little over the month but is down by 0.6 percentage point over the year.

• The number of people employed part time for economic reasons changed little at 4.5 million in November. This measure is up from 4.0 million a year earlier.
• The number of people not in the labor force who currently want a job, at 5.5 million, changed little in November. These individuals were not counted as unemployed because they were not actively looking for work during the 4 weeks preceding the survey or were unavailable to take a job.
• Among those not in the labor force who wanted a job, the number of people marginally attached to the labor force, at 1.6 million, was unchanged in November. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months but had not looked for work in the 4 weeks preceding the survey.
• The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, changed little at 396,000 in November.

Taking a look at jobs by sector, we find that employment trended up in health care, leisure and hospitality, government, and social assistance. Employment increased in transportation equipment manufacturing, reflecting the return of workers who were on strike. Despite the onset of the Holiday season, retail trade cut 28,000 jobs the most jobs in a year, while durable goods manufacturing jobs jumped by 26,000 upon the conclusion of the Boeing strike. Yet while overall manufacturing employment rose due to an extra 32,000 transportation equipment roles, the sector was otherwise mixed; the semiconductor and electronic component sector lost 3,500 jobs. Here are some more details:

• Health care added 54,000 jobs in November, in line with the average monthly gain of 59,000 over the prior 12 months. In November, ambulatory health care services added 22,000 jobs, led by a gain of 16,000 in home health care services. Employment also increased in hospitals (+19,000) and nursing and residential care facilities (+12,000).
• Employment in leisure and hospitality trended up in November (+53,000), following little change in the prior month (+2,000). Over the month, employment trended up in food services and drinking places (+29,000). Leisure and hospitality had added an average of 21,000 jobs per month over the prior 12 months.
• In November, government employment continued to trend up (+33,000), in line with the average monthly gain over the prior 12 months (+41,000). Over the month, employment continued to trend up in state government (+20,000).  However, it is notable that there was a 2,000 drop in Federal employees in the month, the biggest drop in two years.

• Employment increased by 32,000 in transportation equipment manufacturing in November, reflecting the return of workers who were on strike.
• Employment in social assistance edged up by 19,000 in November, similar to the average monthly gain of 18,000 over the prior 12 months. Over the month, individual and family services added 17,000 jobs.
• Retail trade lost 28,000 jobs in November, after showing little net employment change over the prior 12 months. In November, employment declined in general merchandise retailers (-15,000), while electronics and appliance retailers added jobs (+4,000).

And visually:

Finally, for those trying to figure out what all this means, here is perhaps the most important chart: after hitting a record high in August, the number of illegal alien workers has tumbled (even as native-born workers remain flat). This suggests that wage growth is about to surge as employers will now be “forced” to hire domestic employees, who unlike their Guatemalan peers, have the ability to negotiate higher wages.

US Spot Ether ETFs just had their biggest single day of inflows in history and a ninth consecutive trading day of positive flows for the rallying cryptocurrency…

Source: Bloomberg

As CoinTelegraph reports, it was the largest daily inflow since the funds launched on July 23, eclipsing the previous record of $333 million on Nov. 29.

The Ether ETFs have been at a daily net positive since Nov. 21 and have accumulated more than $1.3 billion over the past fortnight. 

The massive inflow day brought the total net inflow to over $1 billion, a figure that is steadily increasing now that Grayscale’s Ethereum Trust has slowed its bleed. 

“Spot ether ETFs now with over $1.3 billion net inflows since July launch,” said Nate Geraci, president of the ETF Store.

“They have done this despite nearly $3.5 billion of outflows from ETHE, no staking allowed, no options trading, no in-kind creation/redemption, and very limited access to major wirehouses (plus Vanguard).”

The BlackRock iShares Ethereum Trust contributed the lion’s share of the day’s inflows with a record $295.7 million, bringing its total inflow to $2.3 billion. 

Fidelity’s Ethereum Fund inflow reached $113.6 million on the day, while Grayscale’s Ethereum Mini Trust had $30.7 million and the Bitwise Ethereum ETF recorded $6.6 million. 

Grayscale’s Ethereum Trust registered an outflow of $15.1 million and the rest of the funds recorded zero flows. 

The flows come after the second-largest cryptocurrency by market cap has risen about 60% in the past month. It’s currently trading at around $3,900.

Meanwhile, spot Bitcoin ETFs in the US continue to see solid momentum…. 

The BlackRock iShares Bitcoin Trust was responsible for most of the figure, with an inflow of $751.6 million, as Grayscale’s Bitcoin Trust outflowed $148.8 million, according to CoinGlass. 

The BlackRock ETF has now seen inflows of almost $2.5 billion over the past five trading days, bringing its total inflow since launch to a whopping $34 billion. 

Ether’s strength against Bitcoin – or the ETH/BTC ratio – should go higher over the next six to 12 months after a stretch of underperformance, according to analysts.

The ratio is currently at 0.04, having increased by 14.5% over the past month, according to TradingView.

Crypto’s renaissance since the election, as Gensler, Warren, et al. remove their boots from bitcoin’s necks, has prompted some to rethink their constant derogatory commentary on this new digital money.

Most specifically, as CoinTelegraph’s Brayden Lindrea reports, FT Alphaville – a daily news commentary service created by the Financial Times – was slammed on X after it issued a spiteful “apology” to Bitcoiners as the asset breached $100,000 on Dec. 5.

The op-ed – published on the same day – was seen as a tongue-in-cheek apology to those who chose not to invest in Bitcoin since FT’s first article on June 6, 2011, when Bitcoin was trading at $15.90.

”We’re sorry if at any moment in the past 14 years you chose based on our coverage not to buy a thing whose number has gone up. It’s nice when your number goes up,” said Bryce Elder, city editor of FT’s op-ed section, Alphaville.

“We’re sorry if you misunderstood our crypto cynicism to be a declaration of support for tradfi, because we hate that too.”

Source: FT Alphaville

FT Alphaville has staunchly argued Bitcoin is a “negative-sum game” that is “chronically inefficient” as a means of exchange and “compromised” as a store of value.

It has also portrayed Bitcoin’s price as an “arbitrary hype gauge that’s disconnected from any utility,” Elder noted, adding that FT Alphaville continues to “stand by every single one of those posts.”

The so-called “apology” didn’t go down well with the crypto community.

One post on X called it a “Cope-Pology,” while another described it as a “faux apology.”

Source: Brandon

“Imagine being so wrong and still having this lack of humility,” another said.

FT Alphaville opinion writers have attacked Bitcoin from virtually every angle, including its pseudonymous creator, Satoshi Nakamoto, who was likened to a “reckless” doctor overprescribing drugs by a former United States Federal Reserve risk examiner in 2014.

Mark Williams argued that Satoshi built a poorly designed Bitcoin supply schedule that fails to factor in the “ebbs and flow” of economic cycles.

“It ignores the ebbs and flow of economic cycles – a reckless approach that is the equivalent of a doctor giving penicillin to every patient without first checking whether they are suffering from infection, depression or mania.”

Despite Bitcoin’s rise to $100,000, it still boasts an army of critics — most notably Berkshire Hathaway’s Warren Buffett, JPMorgan’s Jamie Dimon and financial commentator Peter Schiff — who incorrectly predicted that Bitcoin would never hit $100,000 in November 2019.

Authored by Steve Watson via Modernity.news,

Barack Obama suggested during a speech Thursday that Republicans are the ones weaponizing the justice system against their political enemies, and that Americans should be concerned about elections being rigged.

The remarks, made during an appearance at the ‘Democracy Forum’, had many noting how hypocritical the Democrats are, after years of stating that concerns of election rigging constitute ‘disinformation’, as well as actively sicking the Department of Justice on president Trump.

“Since total victory is impossible in a country politically split down the middle, the result is a doom loop of government gridlock, even greater polarization, wilder rhetoric, and a deepening conviction among partisans that the other side is breaking the rules and has rigged the game to tip it in their favor,” Obama stated.

He added, “One side tries to stack the deck and lock in [very long pause]…A permanent grip on power, either by actively suppressing votes or politicizing the armed forces or using the judiciary criminal justice system to go after opponents.”

NEW: Obama says Republicans are the ones who rig elections and weaponize the justice system while speaking at a “Democracy Forum.”

The comment was so outrageous that Obama could barely get the words out of his mouth.

“One side tries to stack the deck and lock in [very long… pic.twitter.com/LoKM5d7rjr

— Collin Rugg (@CollinRugg) December 6, 2024

Wow.

Talk about the pot calling the kettle black.

The hypocrisy is sickening

— Gunther Eagleman™ (@GuntherEagleman) December 6, 2024

That pause was telling.

— Collin Rugg (@CollinRugg) December 6, 2024

Sounds like it’s the same old playbook for the Democrats.

Accuse others of what they are doing is actually their number one play. 👍

— Tom Homan – Border Czar News (@TomHoman_) December 6, 2024

Projection at its finest. Obama accuses Republicans of ‘rigging elections’ and ‘weaponizing justice,’ but let’s not forget the IRS targeting conservatives or the DOJ’s selective prosecutions. This is classic: accuse your opponents of exactly what your side has mastered.

— Clown World ™ 🤡 (@ClownWorld_) December 6, 2024

Bro lacks a mirror.

— Eric Daugherty (@EricLDaugh) December 6, 2024

*  *  *

Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.

After the October hurricane-driven debacle which sent last month’s payrolls print to the lowest in years, at just 12K, traders were expecting a solid bounce today, with many whispering a print that would come above the consensus estimate of 220K… and they were right: moments ago the BLS reported that in November, payrolls growth surged to 227K, the second highest print since March (after the upward September revision).

Unlike previous month, most of which had all seen downward revision, the previous two months were revised higher, September was revised up by 32,000, from +223,000 to +255,000, and the change for October was revised up by 24,000, from +12,000 to +36,000. With these revisions, employment in September and October combined is 56,000 higher than previously reported.

The rebound reflects swings related to the end of the Boeing strike and the hurricanes that skewed the October data; hiring was led by health care and social assistance, as well as leisure and hospitality and government (see below)

Those looking for a clear indication whether the Fed will keep cutting or halt its easing cycle in two weeks, will have to wait because the rest of the jobs report was mixed: on one hand, unemployment rose from 4.1% to 4.2%, and above the 4.1% estimate (with Black unemployment at 6.4% rising in November, while the jobless rates for adult men (3.9 percent), adult women (3.9 percent), teenagers (13.2 percent), Whites (3.8 percent), Asians (3.8 percent), and Hispanics (5.3 percent) showed little or no change over the month)…

…but hourly earnings also rose, rising 0.4% MoM in November, above the 0.3% estimate, with annual wage growth flat at 4.0%, also above the 3.9% estimate, both indicating that wage growth pressures remain.

We should note that while the Establishment report gain of 227K payrolls was solid, the Household survey indicated a much bigger weakness, with the number of people employed tumbling by 355K to 161.141 million.

Tied to that, both the full-time and part-time series showed a notable drop (since these track the Household Survey), with full-time jobs dropping by 111K and part-time jobs down by 268K.

Taking a closer look at the report we find the following:

• The number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 1.7 million in November. This measure is up from 1.2 million a year earlier. In November, the long-term unemployed accounted for 23.2 percent of all unemployed people.
• The labor force participation rate, at 62.5 percent, changed little in November and has remained in a narrow range of 62.5 percent to 62.7 percent since December 2023. The employment-population ratio, at 59.8 percent, also changed little over the month but is down by 0.6 percentage point over the year.

• The number of people employed part time for economic reasons changed little at 4.5 million in November. This measure is up from 4.0 million a year earlier.
• The number of people not in the labor force who currently want a job, at 5.5 million, changed little in November. These individuals were not counted as unemployed because they were not actively looking for work during the 4 weeks preceding the survey or were unavailable to take a job.
• Among those not in the labor force who wanted a job, the number of people marginally attached to the labor force, at 1.6 million, was unchanged in November. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months but had not looked for work in the 4 weeks preceding the survey.
• The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, changed little at 396,000 in November.

Taking a look at jobs by sector, we find that employment trended up in health care, leisure and hospitality, government, and social assistance. Employment increased in transportation equipment manufacturing, reflecting the return of workers who were on strike. Despite the onset of the Holiday season, retail trade cut 28,000 jobs the most jobs in a year, while durable goods manufacturing jobs jumped by 26,000 upon the conclusion of the Boeing strike. Yet while overall manufacturing employment rose due to an extra 32,000 transportation equipment roles, the sector was otherwise mixed; the semiconductor and electronic component sector lost 3,500 jobs. Here are some more details:

• Health care added 54,000 jobs in November, in line with the average monthly gain of 59,000 over the prior 12 months. In November, ambulatory health care services added 22,000 jobs, led by a gain of 16,000 in home health care services. Employment also increased in hospitals (+19,000) and nursing and residential care facilities (+12,000).
• Employment in leisure and hospitality trended up in November (+53,000), following little change in the prior month (+2,000). Over the month, employment trended up in food services and drinking places (+29,000). Leisure and hospitality had added an average of 21,000 jobs per month over the prior 12 months.
• In November, government employment continued to trend up (+33,000), in line with the average monthly gain over the prior 12 months (+41,000). Over the month, employment continued to trend up in state government (+20,000).  However, it is notable that there was a 2,000 drop in Federal employees in the month, the biggest drop in two years.

• Employment increased by 32,000 in transportation equipment manufacturing in November, reflecting the return of workers who were on strike.
• Employment in social assistance edged up by 19,000 in November, similar to the average monthly gain of 18,000 over the prior 12 months. Over the month, individual and family services added 17,000 jobs.
• Retail trade lost 28,000 jobs in November, after showing little net employment change over the prior 12 months. In November, employment declined in general merchandise retailers (-15,000), while electronics and appliance retailers added jobs (+4,000).

And visually:

Finally, for those trying to figure out what all this means, here is perhaps the most important chart: after hitting a record high in August, the number of illegal alien workers has tumbled (even as native-born workers remain flat). This suggests that wage growth is about to surge as employers will now be “forced” to hire domestic employees, who unlike their Guatemalan peers, have the ability to negotiate higher wages.

Futures are flat ahead of what Goldman called “the most important remaining macro report of 2024”, the November jobs report, which will directly determine if the Fed cuts rates in two weeks. S&P futures were down 0.1% at 8:00am ET, flatlining in a quiet overnight session; Nasdaq 100 futures were fractionally in the green even as Mag 7 stocks are a touch lower this morning. China’s CSI/HIS rallied, along with European Luxury/Autos names. Modest gains in the dollar put the greenback on course to rise for the ninth week out of the last 10. Treasury yields ticked higher by 1-3bps across the curve. Commodities are mostly lower for both oil and base metals; oil extended its slide to a third day. Bitcoin pulled back from its record high, after briefly tumbling as much as 7% before erasing most of the losses. Trump tapped prominent venture capitalist David Sacks as his crypto and AI guy and also picked David Perdue (former CEO of DG with excessive business experience in Asia) to be Ambassador to China last night; Today, all eyes on NFP (preview here): the Street’s estimate is for a 220k print, up sharply from 12k jobs in October, temporarily low due to hurricanes and strikes. For the unemployment rate the Street’s estimate is 4.1%.

In premarket trading, Lululemon surged 9% after the company edged up its full-year outlook on strong sales overseas, a sign the upscale activewear brand is fending off upstart competitors and navigating slower growth in consumer spending. Ulta Beauty jumped 11% after the cosmetics retailer increased its annual projections. Smith & Wesson Brands tumbled 13% after 2Q results at the gunmaker came in weaker than expected. Here are other notable premarket movers:

• Asana (ASAN) surges 25% after the provider of a software tool used by project managers posted a quarterly revenue beat.
• DocuSign (DOCU) gains 13% after the maker of electronic-signature software boosted its revenue forecast for the full year. Analysts are positive about early contract renewals.
• Gitlab (GTLB) rises 9% after the software development platform posted strong 3Q results and provided a 4Q EPS forecast that came in ahead of expectations.
• Petco (WOOF) rises 5% after the pet health and wellness company posted 3Q comparable sales that beat expectations.
• Rubrik (RBRK) gains 23% after the data management company boosted its full-year revenue guidance. Demand for data security drove the impressive results, analysts say.
• Veeva Systems (VEEV) rises 7% after the health-care software company boosted its full-year earnings forecast.
• Victoria’s Secret (VSCO) gains 4% after raising its outlook and reporting third-quarter sales that topped Wall Street expectations, saying shoppers had an early positive response to its holiday merchandise.

Today’s jobs report will determine whether the S&P 500 can build on its 27% rally this year. Excitement around artificial intelligence and optimism that President-elect Donald Trump’s policies will boost US markets have propelled the benchmark toward its best year since 2019. Economists estimate that US nonfarm payrolls rose by 220,000 in November as hiring rebounded from weather-related and strike disruptions  (preview here). It’s the final payrolls report before the Fed’s next interest-rate decision, with swaps trading putting the odds of a quarter-point reduction later this month at around 65%.

“If we get a surprisingly hot number, you can expect pricing to come back more to 50-50,” said Michael Brown, a senior strategist at Pepperstone. “Given the time of the year, market volumes are lighter than usual, so you are more likely to see an outsize reaction — and that’s another reason for people to sit on their hands.”

The S&P 500’s price-to-book ratio has surged to 5.3 times in 2024, approaching a peak of 5.5 hit in March 2000 during the height of the technology bubble, according to data compiled by Bloomberg. BofA’s Hartnett said there’s a high risk of “overshoot” in early 2025 if the S&P 500 nears 6,666 points — about 10% above current levels. He also warned that the rally in US stocks as well as cryptocurrencies has left the asset classes looking frothy.

Meanwhile in Europe, France’s week of political tumult was set to end positively in markets. The nation’s bonds outperformed euro-area peers after National Rally leader Marine Le Pen told Bloomberg News a budget could be delivered within weeks. The euro was steady. As for European stocks, they rose again after six straight sessions of gains, led by a 1.4% gain in the CAC 40 as French President Macron meets with key politicians in an effort to cobble together a new administration. Swedish online pharmacy Apotea steals the spotlight, suriging over 50% in its stock-market debut. Meanwhile, Puig Brands fell to its lowest since IPO earlier this year.  Here are the biggest movers Friday:

• Direct Line rises as much as 8.5% after the insurer said it is minded to recommend the latest takeover proposal from rival Aviva should a firm offer be made. Analysts believe the deal is good
• Apotea surges as much as 52% its debut in Stockholm on Friday, with the online pharmacy showing strong demand for one of Sweden’s biggest initial public offerings this year
• Derichebourg shares jump as much as 9.3% after the environmental services company reported better-than-expected annual results in tough conditions, according to CIC
• IMCD shares rise as much as 4.2% in Amsterdam as Kepler Cheuvreux resumes coverage of the chemicals distributor with a buy rating, following a €300m capital increase
• Troax Group gains as 3% on Friday as SEB Equities starts coverage on the machinery parts and warehouse fittings manufacturer with a buy rating, describing it as a “high-quality asset”
• Puig Brands shares falls to their lowest level since the Spanish beauty firm went public in May after its Charlotte Tilbury brand withdrew some batches of a setting spray product
• Serco drops as much as 5%, reaching a 13-month low, after being hit by a double-downgrade from UBS, which warned the outsourcing company is entering a period of flat earnings growth
• AJ Bell falls as much as 4.4% as Deutsche Bank and Panmure Liberum cut the UK financial services company to hold from buy after the stock hit a record high
• Berkeley Group gives up early gains to slip much as 2.3% as analysts said the housebuilder’s new plan to drive growth over the next decade is likely to lower shareholder returns

Earlier in the session, Asian stocks was little changed, as Korean equities extended declines on political uncertainty, while Chinese shares climbed ahead of a key policy meeting. The MSCI Asia Pacific Index erased a loss of as much as 0.5% and swung in a narrow range. Chipmakers TSMC and SK Hynix were among the biggest drags on the measure after the rally in tech shares halted on Wall Street overnight. Chinese megacaps Tencent and Alibaba were among the largest boosts to the regional gauge. South Korea’s Kospi fell 0.6% to close at its lowest level in three weeks. The nation’s ruling party leader called for swift suspension of the president’s duties, while local media reported speculation on a possible second order of martial law. Military officials said there’s no need to worry about a possible second martial law decree. Hong Kong and mainland China stocks strongly rebounded from Thursday’s loss, with traders looking to next week’s Central Economic Work Conference for more details on stimulus. Japanese and Australian equities tracked US peers lower. Stocks in India were steady after the central bank kept borrowing rates unchanged but eased the cash reserve ratio requirement.

In FX, the euro is little changed but is still one of the better performing G-10 currencies. The yen drops 0.4% while the kiwi is the weakest of the G-10’s. The Bloomberg Dollar Spot Index is up 0.1%.

In rates, treasuries are flat ahead of the US jobs report, with US 10-year yields unchanged at 4.18%. Treasuries extended Thursday’s curve-flattening move. Front-end yields are 1bp-2bp cheaper on the day with long-end slightly richer, amid similar price action in core European bonds. French bonds outperform after National Rally leader Marine Le Pen said Thursday that a budget could be delivered in weeks. US session includes November jobs report at 8:30am New York time and four scheduled Fed speakers ahead of self-imposed quiet period beginning Saturday.

In commodities, oil added to its declines on concerns that OPEC+’s decision to push back the revival of halted production won’t prevent a surplus forming next year. WTI fell 0.5% to $67.90 a barrel. Spot gold rises $5 to $2,637/oz. Bitcoin falls 1%, having failed to sustain a break above $100,000.

Looking at today’s calendar, we get the November jobs report (8:30am), December preliminary University of Michigan sentiment (10am) and October consumer credit (3pm). Fed speaker slate includes Bowman (9:15am), Goolsbee (10:30am), Hammack (12pm) and Daly (1pm)

Market Snapshot

• S&P 500 futures little changed at 6,085.00
• STOXX Europe 600 up 0.2% to 520.74
• MXAP down 0.1% to 186.69
• MXAPJ up 0.2% to 587.00
• Nikkei down 0.8% to 39,091.17
• Topix down 0.5% to 2,727.22
• Hang Seng Index up 1.6% to 19,865.85
• Shanghai Composite up 1.0% to 3,404.08
• Sensex down 0.1% to 81,644.02
• Australia S&P/ASX 200 down 0.6% to 8,420.85
• Kospi down 0.6% to 2,428.16
• German 10Y yield little changed at 2.12%
• Euro down 0.1% to $1.0572
• Brent Futures down 0.5% to $71.75/bbl
• Gold spot up 0.3% to $2,640.27
• US Dollar Index up 0.15% to 105.87

Top Overnight News

• It looks increasingly like South Korean President Yoon Suk Yeol will be impeached after the ruling party’s leader called for his quick suspension. The acting defense minister denied rumors about a second imposition of martial law. BBG
• South Korea’s central bank chief warns that Trump’s trade policies and increased competition from Chinese exporters are a greater threat to the country’s economy than the current martial law crisis. FT
• The Bank of Japan is staying guarded on the timing of the next rate hike with December hardly a done deal given soft consumption, its governor’s cautious decision-making style and anxiety over U.S. economic policy in a second Trump presidency. RTRS
• India’s central bank unexpectedly cut its cash reserve ratio by 50 bps to 4%, while keeping its key rate unchanged. The RBI announced measures to attract foreign inflows to stem a decline in the rupee. BBG
• German industrial production unexpectedly fell in October. Output decreased 1% from the previous month, worse than any forecast in a Bloomberg survey. BBG
• We estimate nonfarm payrolls rose by 235k in November, above consensus of +215k and the three-month average of +104k. Alternative measures of employment growth generally indicated a sequentially stronger pace of job creation, and the end of strikes and the recent hurricanes that weighed on October job growth will likely boost November job growth. GIR
• Trump picked former Sen. David Perdue, who was the CEO of Dollar General and has extensive business experience in Asia, to become the next ambassador to China. Politico
• Trump named venture capitalist David Sacks to become the “White House AI and Crypto Czar” and lead the Presidential Council of Advisors for Science and Technology. Donald Trump said the venture capitalist will focus on making the US the “clear leader” in the fields. Politico, BBG
• Investors have pumped almost $140bn into US equity funds since last month’s election as traders bet Donald Trump’s administration will unleash sweeping tax cuts and reforms in a boon to corporate America. FT
• $136.4bln inflow to cash in week to Wednesday – largest weekly inflow since March 2023. Stocks: USD 8.2bln inflow, Bonds: USD 4.9bln inflow, Crypto: USD 3bln (largest every 4-week inflow of 11bln), YTD inflows: USD 53bln annualised: BofA Weekly Flow Show: USD

A more detailed look at markets courtesy of Newsquawk

APAC stocks were mixed with some cautiousness in the region after the weak lead from Wall St and ahead of the key US jobs data. ASX 200 was dragged lower by early underperformance in tech and healthcare, while gold miners also suffered after initial declines in the precious metal. Nikkei 225 was the laggard and briefly fell beneath the 39,000 level despite encouraging Household Spending data. Hang Seng and Shanghai Comp were buoyed despite the lack of any major fresh  catalysts heading into next week’s trade and inflation data releases, as well as the Central Economic Work Conference where Chinese leaders are said to discuss economic growth and stimulus.

Top Asian News

• China may let provinces approve special bond projects, according to Caixin news.
• RBI kept the Repurchase Rate unchanged at 6.50%, as expected, while it maintained its neutral stance with the rate decision made by 4 out of 6 voting in favour of a hold and the policy stance vote was unanimous. However, RBI Governor Das later announced a surprise cut to the Cash Reserve Ratio by 50bps to 4.00% which will take effect in two tranches of 25bps each on December 14th and December 28th which will infuse liquidity of INR 1.16tln. Das said price stability is a mandate given to them and growth is also very important, while he noted the last mile of disinflation is prolonged and recent growth slowdown will lead to downward revision for full-year growth. Das acknowledged that inflation crossed the upper band and food inflation pressures will linger with food prices to start easing only in Q4, while headline inflation is likely to be elevated in Q3 and he noted a status quo in this policy is appropriate and essential. Das said the near-term inflation and growth outlook has turned somewhat adverse, while India’s FY25 real GDP growth forecast was cut to 6.6% versus 7.2% previously and the FY25 CPI inflation forecast was raised to 4.8% versus 4.5% previously. Das also announced to introduce a new benchmark called the secured overnight rupee rate and said in order to attract more capital inflows, to increase interest rate ceilings on FCNR-B deposits.
• RBI Governor Das said expect tight liquidity in the next few months; there is a possibility of increase in currency in circulation.
• South Korean ruling party leader Han said President Yoon needs to be suspended from his office ASAP and that Yoon ordered to arrest prominent politicians on the grounds they are anti-state forces. It was also reported that South Korea’s main opposition party said lawmakers were on high alert after many reports of another martial law declaration, although the South Korean Joint Chiefs of Staff later said there is no need to worry about a second martial law and the special warfare commander also said he would refuse should another martial law order come.

Mixed performance thus far from Europe following a flat open amidst a lack of fresh pertinent catalysts and in the run-up to the US jobs report later today which will help shape expectations for near-term Fed policy. European Sectors are mixed with no clear bias or theme, with the breadth of the market narrow at the open before gradually widening. In terms of majors, CAC 40 narrowly outperforms in the aftermath of the French political developments as President Macron looks to name a new PM within days, with French Banks once again seeing a strong performance. Furthermore, luxury stocks see upside amid a possible China play in the run-up to the Chinese Central Economic Work Conference next week. US equity futures see flat trade across the board but with a mild downward bias in the RTY in a continuation of its recent underperformance, with traders awaiting the latest US jobs report.

Top European News

• French Socialists have expressed a willingness to work with a Macronist or Republican Prime Minister if “reciprocal concessions” are made, according to Politics Global.
• Riksbank’s Seim said if economic and inflation outlook remains unchanged, policy rate can be cut again in December and again in H1 2025.

FX

• USD is a touch firmer vs. most peers in the run-up to today’s NFP print which is expected to pick up to 200k vs. October’s weather/strike-impacted 12k.
• EUR’s rally vs. the USD has paused for breath after vaulting from a 1.0508 low yesterday to a 1.0593 peak today. Support yesterday was derived from some relief around the French budget situation with Le Pen optimistic that a 2025 budget can be passed in the coming weeks.
• JPY is softer vs. the USD despite some fleeting support from comments by Japan’s main Opposition party Chief who said the BoJ should normalise monetary policy, adding it is wrong to focus too much on keeping monetary policy loose when Japan is experiencing inflation. USD/JPY has made its way back onto a 150 handle with a current session peak @ 150.60 vs. yesterday’s high @ 150.77. If breached, the 10DMA sits @ 150.99.
• GBP flat vs. the USD in quiet UK newsflow asides from comments by BoE’s Greene who said UK services inflation has remained stubbornly high, underpinned by wage growth and the supply side of the UK economy is weak. Cable briefly rose above the top end of yesterday’s 1.2693-1.2771 range before fading gains.
• Antipodeans are both softer vs. the USD and at the foot of the G10 leaderboard. AUD/USD briefly slipped below yesterday’s 0.6421. If breached again, the next target is the 0.64 mark with Wednesday’s low just below @ 0.6399. NZD/USD is just about holding above yesterday’s 0.5848 low. If breached, Wednesday’s low sits @ 0.5829.
• PBoC set USD/CNY mid-point at 7.1848 vs exp. 7.2396 (prev. 7.1879)

Fixed Income

• USTs are a touch lower following yesterday’s flattening of the curve. Fresh macro drivers for the US are on the light side in the run-up to today’s NFP print. Mar’25 UTSs are currently towards the top end of yesterday’s 110.28+ to 111.08+ range.
• Bunds a touch higher but off best levels as support from soft German Industrial Production metrics proved to be fleeting. There was no clear driver for the pullback. However, German paper has continued to fall behind its French equivalent. This move garnered traction following comments from far-right leader Le Pen who stated she sees a 2025 budget being passed in the coming weeks. Accordingly, the FR/GE spread has narrowed to its lowest level since November 21st.
• Gilts are just above the unchanged mark with fresh UK drivers lacking since the “dovish” Governor Bailey interview earlier in the week. Thus far the Mar’25 contract sits towards the bottom end of yesterday’s 95.69-96.18 range, whilst the 10yr yield remains north of 4.25%.

Commodities

• Crude complex experiences a modest downward tilt with prices lacklustre after the prior day’s choppy performance amid the deluge of OPEC+ updates, with traders keeping an eye on geopolitical updates ahead of the US jobs report.
• Spot gold holds a modest upward bias ahead of NFP. Spot gold resides in a USD 2,613-2,645.73/oz range after dipping under yesterday’s USD 2,623.61/oz low. Prices remain sandwiched between the 50 DMA (USD 2.667.96/oz) and 100 DMA (2,583.44/oz).
• Copper grinds higher as traders look ahead to the US jobs report, and thereafter the Chinese Central Economic Work Conference next week whereby the focus will likely be on whether there’s a new emphasis on boosting domestic demand or supporting the property market.
• Morgan Stanley raised its H2 2025 Brent price forecast to USD 70/bbl (prev. USD 66-68/bbl); and lowered its estimate for OPEC-9 production by 400k BPD for 2025 and 700k BPD by Q4 2025. The desk said the OPEC+ updated production agreement tightens its supply/demand outlook for 2025, particularly for H2. MS still estimates a surplus for the oil market next year, but smaller than before.
• Qatar set January Marine crude and Land crude OSP at Oman/Dubai plus USD 0.15/bbl.
• Oil supplies to Czech Republic via Druzbha were resumed today, according to CTK citing Orlen CEO.

Geopolitics: Middle East

• Senior Iranian official said Tehran has taken all necessary steps to increase number of military advisers in Syria and deploy troops; likely that Tehran will need to send military equipment, missiles, and drones to Syria.
• IDF announces interception of suspicious air target after warnings in Upper Galilee, according to Sky News Arabia.
• Russian Foreign Minister Lavrov said they are very worried after what happened in Syria, while he spoke with his Turkish and Iranian counterparts and they agreed to meet this week, according to Al Jazeera

Geopolitics: Ukraine

• White House stated regarding National Security Advisor Sullivan’s meeting with Ukrainian officials that Sullivan focused the discussion on the President’s theory of the case to improve Ukraine’s position in its war against Russia, while it was stated that Ukraine’s position in this war will improve relative to Russia’s as we enter into 2025 and will allow Ukraine to enter any future negotiating process from a position of strength.
• Russia’s Foreign Minister Lavrov said the use of hypersonic missiles in Ukraine means the West must understand that Russia is ready to use anything to stop notions of inflicting a strategic defeat on Moscow, while he added it is a mistake for anyone in the West to suggest that Russia has no red lines. It was separately reported that the Foreign Minister said Russia sees no reason why Moscow and Washington should not cooperate for the sake of the world.

Geopolitics: Other

• Taiwan’s President Lai said he hopes China does not take any unilateral actions and noted that more Chinese military drills won’t win respect from any other countries in the region, while he added that authoritarian countries should not see Taiwan’s engagement with other countries as a provocation and hopes China returns to rules-based international order. Furthermore, he said Taiwan’s people cannot accept China’s military operating around Taiwan, as well as noted that peace is priceless and there’s no winner in a war but also stated they cannot have any illusions about peace and must continue to strengthen defences.
• Armed forces from Japan, Philippines, and US conducted “multilateral maritime cooperative activity” within the Philippines’ exclusive economic zone.

US Event Calendar

• 08:30: Nov. Change in Nonfarm Payrolls, est. 220,000, prior 12,000
  • Nov. Change in Manufact. Payrolls, est. 30,000, prior -46,000
  • Nov. Change in Private Payrolls, est. 205,000, prior -28,000
  • Nov. Unemployment Rate, est. 4.1%, prior 4.1%
  • Nov. Labor Force Participation Rate, est. 62.7%, prior 62.6%
  • Nov. Underemployment Rate, prior 7.7%
  • Nov. Average Weekly Hours All Emplo, est. 34.3, prior 34.3
  • Nov. Average Hourly Earnings YoY, est. 3.9%, prior 4.0%
  • Nov. Average Hourly Earnings MoM, est. 0.3%, prior 0.4%
• 10:00: Dec. U. of Mich. Sentiment, est. 73.3, prior 71.8
  • Dec. U. of Mich. Current Conditions, est. 65.2, prior 63.9
  • Dec. U. of Mich. Expectations, est. 77.7, prior 76.9
  • Dec. U. of Mich. 1 Yr Inflation, est. 2.7%, prior 2.6%
  • Dec. U. of Mich. 5-10 Yr Inflation, est. 3.1%, prior 3.2%
• 15:00: Oct. Consumer Credit, est. $10b, prior $6b

DB’s Jim Reid concludes the overnight wrap

Just two weeks now until most people’s Xmas vacation start and one of my 7-year old twins last night declared for the first time that he didn’t think Santa was real which means the only holdouts in the family now thinking Santa is real are his identical brother and Brontë the dog. The end of the innocence is nearer in our family.

Just when you thought it was safe to relax into Christmas, along comes US payrolls today to keep you on your toes, especially with an upcoming close call as to whether the Fed cuts in 12 days time. Futures are currently pricing in a 70% probability that they will.

The Santa Claus rally we’ve seen over the last few weeks took a little breather last night in the US ahead of the data today. The S&P 500 (-0.19%) just missed out on 12 days of gains in the last 13 sessions, which would have been the first such run since 2013. However a more recent run continued in Europe yesterday as the STOXX 600 (+0.40%) was up for a 6th consecutive session.

As a background to today’s report, last month underwhelmed, with nonfarm payrolls printing at just +12k, which was the weakest since December 2020 when the pandemic was still buffeting the economy. Private payrolls were at -28k, the first negative print since December 2020. But those numbers were impacted by strike action, whilst Hurricane Milton also hit Florida during the survey reference period. Our US economists expect a decent bounce back to +215k today. That would leave the unemployment rate unchanged at 4.1%, and they also see average hourly earnings growth at +0.3%.

Moving back across the Atlantic, France continues to serve up an abundance of headlines. Michel Barnier has now officially resigned, but will be staying on until a new Prime Minister is appointed. President Macron, in a televised speech last night, reiterated his plan to remain President for the remainder of his term until 2027 and said he would appoint a new PM in the “coming days.” Macron criticised both political flanks, saying that far-left and far-right legislators tried to provoke an early presidential election, before stating that the new government’s priority will be approving a budget. There is a concern amongst some lawmakers that the special stopgap emergency powers could lead to higher taxes for millions of families, however Le Pen called the stopgap legislation better than former PM Barnier’s plan.

Before Macron’s evening speech, markets became increasingly relaxed about France’s debt risk, with the Franco-German 10yr spread tightening a further -5.7bps tighter yesterday to 77.8bps. That came as Marine Le Pen gave a surprise Bloomberg interview, which was taken constructively by investors, as she said that France could pass a budget in “a matter of weeks” if the next PM was prepared to cut the deficit at a slower pace. So that suggestion of a compromise helped spreads to tighten, and the move yesterday was actually the biggest daily decline in the spread since July right after the first round of the legislative election.
For more information, Henry wrote a note here on why this is a long way from the sovereign debt crisis. One particular difference is we’ve not seen any signs of contagion from France to other countries, and only yesterday both the Italian and the Spanish 10yr spreads over bunds reached their tightest level in 3 years, at 108.7bps and 65.5bps respectively.

In response to the more stable politics, European equities had a decent session yesterday but the French market didn’t out-perform as with their Government debt. Nevertheless, the STOXX 600 (+0.40%), the CAC 40 (+0.37%) and the DAX (+0.63%) all advanced for a 6th consecutive session with the DAX hitting a fresh record high.

The S&P 500 oscillated between gains and losses before ultimately closing -0.19% lower. That said, there was quite a divergence between mega caps and small caps, as the Magnificent 7 (+0.38%) moved up to another record, whilst the small-cap Russell 2000 fell -1.25%. Treasury curves flattened as the 2yr yield was +1.8bps up to 4.144%, whilst the 10yr yield (-0.04bps) was broadly flat at 4.176%. Later on, Richmond Fed President Barkin spoke to the potential inflationary pressures of the Trump administration’s tariff plan, saying that tariffs are an “inflationary pressure,” and that the overall impact depends on how consumers, corporates and the Fed all deal with them. He also noted that consumers have started pushing back on higher prices, and demand may not stay as strong if prices continue to climb. We’ll hear from a few more Fed speakers today after the jobs report, and bear in mind that it’s the last opportunity for them to speak ahead of their pre-meeting blackout period.

In terms of data yesterday, the weekly initial jobless claims were a bit worse than expected. They ticked up to a 6-week high of 224k (vs. 215k expected) in the week ending November 30, which slightly pushed up the 4-week average to 218.25k. The rise wasn’t particularly big, and the continuing claims for the previous week came down, so it wasn’t a one-sided picture.

Asian equity markets are mostly trading lower outside of China this morning. The Nikkei (-0.88%) is leading losses with the KOSPI (-0.37%) also lower but both well off their lows. Chinese stocks are outperforming with the Hang Seng (+1.34%) and the Shanghai Composite (+1.01%) strong ahead of a key Chinese economic meeting next week. S&P 500 (-0.10%) and NASDAQ 100 (-0.01%) futures are just on the wrong side of flat.

Early morning data showed that Japan’s household spending contracted in October for the third straight month, falling -1.3% y/y (but better than the -2.5% expected) as against a -1.1% drop the previous month. Separately, Base pay for full-time workers increased by +2.8% in October from a year ago, the biggest gain for comparable data back to 1994.

To the day ahead now, and the main data highlight will be the US jobs report for November, but we’ll also get the University of Michigan’s preliminary consumer sentiment index for December, and German industrial production for October. From central banks, we’ll hear from the Fed’s Bowman, Goolsbee, Hammack and Daly.