NatGas Hits Highest Price In Year On “Very Cold Pattern Developing” Across Lower 48
Natural gas futures in Chicago jumped 6% on Thursday, reaching a one-year high as traders price a cold blast across the Lower 48.
Futures for December delivery soared to $3.372 per million British thermal units, up 6% this morning and up nearly 27% since Nov. 8. Prices also touched a one-year.
Ole R. Hvalbye, a Commodities Analyst at Skandinaviska Enskilda Banken AB (SEB), told energy news website Rigzone that NatGas soared on “the latest National Oceanic and Atmospheric Administration (NOAA) short-term forecast (6-14 days) predicts colder than normal temperatures spreading from the West Coast, with below-average conditions expected across much of the country, except for the Gulf Coast and East Coast.”
Data from Bloomberg shows that temperatures across the Lower 48 are forecasted to trend below a 30-year average for the next few weeks, indicating that fuel demand will rise as thermostats are turned up.
More weather forecast…
Confidence increasing of a VERY cold pattern developing to end November and start December.
Both the EPS/GEFS is support of a widespread notably below normal pattern for much of the US.
You won’t find a much better upper-level pattern with ridging near Greenland and the N.… pic.twitter.com/uQ2iNN1PxG
Plus, there are major snow threats across the Mid-Alantic and Northeast.
Impact SNOW will fall today from Wisconsin, Illinois and Indiana into West Virginia. Snow will fall tonight and tomorrow in western North Carolina, West Virginia, western Maryland, Pennsylvania, New York state and northwest New Jersey. These could be double digits plowable,… pic.twitter.com/jYw4hQqhrM
“Adding to the bullish sentiment, feedgas supply to U.S. LNG export terminals has climbed to 14.07 billion cubic feet per day, the highest level since January 2024, according to BNEF,” Hvalbye added.
The SEB analyst continued, “This marks a significant increase from last week’s average of 13.5 billion cubic feet per day. Additionally, export flows to Mexico are estimated at 6.6 billion cubic feet per day today, highlighting strong demand from the region.”
He said, “Domestic natural gas production in the U.S. is estimated at 101.8 billion cubic feet per day today, slightly below last week’s average of 102.4 billion cubic feet per day.”
“Meanwhile, demand for nat gas across the Lower 48 states has risen to 79.3 billion cubic feet per day but remains below the five-year average of approximately 82.7 billion cubic feet per day,” he noted.
Hvalbye added that the EU gas market will continue to see upward price pressure as global demand for LNG cargoes intensifies during the Northern Hemisphere winter season.
One of the biggest questions for energy traders is how high prices will rise before drillers, who curtailed output earlier this year, begin ramping up production.
Investors Are Increasingly Reluctant To Buy US Treasuries Even At These Yields
By Bas van Geffen, Senior Macro Strategist at Rabobank
Yesterday, my colleague wrote that not everything is worth worrying about equally. Financial stability reports always provide plenty of fodder for pessimists; after all, the purpose of these reports is to raise awareness of potential downsides. But not all risks are equally concrete or urgent. Having said that, in its latest Financial Stability Review, the ECB was more blunt about financial risks than in previous years.
The central bank is particularly worried about the potential resurgence of the sovereign debt crisis, but unlike the original crisis, France is now being called out as a particular risk: “policy uncertainty [or paralysis], weak fiscal fundamentals in some countries and sluggish potential growth raise concerns about sovereign debt sustainability.” Countries’ debt ratios are high, and this debt increasingly has to be refinanced at higher interest rates. Admittedly, it is somewhat alarming that fiscal metrics haven’t recovered since the pandemic – although ratios have improved over the past few years.
The ECB continues that “large primary deficits make it harder to provide additional investment to combat structural challenges, including climate change, defence spending, and low productivity.” It’s hard to argue with this logic. Yet, at the same time, the bold investments required to fix Europe’s low structural growth rate require big government outlays. And, as we’ve noted almost a year ago now, any government will find it hard to gather voters’ support for structural investments and reforms if this means cutting back on social spending.
Corporate actions only underscore this need for structural improvement: yesterday, Ford announced it would cut 4,000 European jobs due to sluggish demand for electric vehicles and “fierce competition from China.”
At the same time, the outspokenness of the ECB’s Financial Stability Review is perhaps something of a warning to those who are banking on steep rate cuts. Of course, if a crisis were to develop, the ECB may have no other choice but to go back to it’s playbook for most of the 2010s. But the concerns about refinancing risk and higher interest costs imply that the central bank does not anticipate a return to very low rates.
Likewise, incoming data underscore that the easing cycle may not be as fast as some expect, and that it may end at a substantially higher rate. Yesterday, the ECB reported that Eurozone negotiated wages rose 5.4% y/y in Q3, pouring a bucket of cold water over any remaining expectations that the central bank may cut by more than 25 basis points in December. A rebound had been expected after the 3.5% print in the second quarter but the re-acceleration was significantly stronger than both we and the ECB had anticipated.
A large part of the acceleration can be attributed to strong wage increases in Germany. In Q3, collective agreements led to an 8.8% y/y increase in German wages. Stripping out one-off payments, German wages clocked in at 5.7%; That’s a sharp acceleration from 4% in Q2. We don’t believe that this acceleration will be sustained. The recent IG Metall deal, for example, suggests more moderate wage growth in the coming quarters. Nonetheless, data continue to underscore that wage pressures are receding only gradually.
Relatively sticky wages in other countries are also pointing in that direction. Dutch employers’ association AWVN tracked collectively agreed wages in Q3 at 4.3%, while Italian and Spanish wages appear to have stabilized just above the 3%-mark. On the very other end of the spectrum, French wages are still trending down, from 2.8% in Q2 to 2.7%. This will likely converge to further to the inflation rate in the coming quarters.
So, all in all, these data should not prevent the ECB from another 25bp cut in December, but they do underscore the need for caution as the ECB navigates heightened uncertainty about growth and lingering inflation risks.
Many of these risks are ultimately of Europe’s own making, but incoming President Trump is putting them in the spotlight. Trump has been quick to assemble much of his team, but one of the key roles, Treasury Secretary, remains unfilled for now. The President-elect’s more cautious approach perhaps reflects his awareness of the importance of this position. The FT reported yesterday that Marc Rowan –who is not unfamiliar to Wall Street– is now a top contender for the job.
And Trump is right to consider his options. Because whoever gets the job, it will be a tough one. The incoming Treasury Secretary will have the difficult challenge of uniting Trump’s agenda of disruption and change in the (world) economy, and tax cuts, with stability in financial markets. The potential impact on the US fiscal deficit is getting increasing attention, and yesterday’s auction of 20y Treasury bonds served as a warning to the incoming administration. The auction drew very weak demand, even though 20y yields have risen from 4% in mid-September to around 4.65% currently. Although the 20 year is admittedly a bit of an odd point on the US curve, it does suggest that investors are reluctant to buy Treasuries even at these yields as long as there are concerns about potential impact of Trump’s plans on the deficit.
Musk, Ramaswamy Reveal DOGE Blueprint To Cut Government Waste
Elon Musk and Vivek Ramaswamy have laid out their vision for the newly formed Department of Government Efficiency (DOGE).
According to a new WSJ op-ed, the pair writes that “Our nation was founded on the basic idea that the people we elect run the government. That isn’t how America functions today. Most legal edicts aren’t laws enacted by Congress but “rules and regulations” promulgated by unelected bureaucrats—tens of thousands of them each year.”
They call government bloat “antidemocratic and antithetical to the Founders’ vision,’ as it “imposes massive direct and indirect costs on taxpayers.”
President Trump has asked the two of us to lead a newly formed Department of Government Efficiency, or DOGE, to cut the federal government down to size. The entrenched and ever-growing bureaucracy represents an existential threat to our republic, and politicians have abetted it for too long. That’s why we’re doing things differently. We are entrepreneurs, not politicians. We will serve as outside volunteers, not federal officials or employees. Unlike government commissions or advisory committees, we won’t just write reports or cut ribbons. We’ll cut costs.
As the Epoch Times notes, the urgency for downsizing the federal government is due to the ballooning costs of paying interest on our ginormous national debt. I and others have been writing about the debt problem for decades, but now the national debt has reached a critical stage. According to usdebtclock.org, the federal debt passed $36 trillion last week.
There is nothing inherently significant about the number $36 trillion, but as you can see from the accompanying chart published by the Federal Reserve Bank of St. Louis, the annual cost of the federal debt has exploded from under $600 billion in 2020 to over $1 trillion now.
Here’s the plan:
1. Regulatory Rescissions: Rolling Back Illegitimate Regulations
The most immediate and significant action DOGE will take is targeting the tens of thousands of regulations imposed by federal agencies, many of which exceed the constitutional authority granted to these agencies.
Using Supreme Court Rulings as a Guide: Following the rulings in West Virginia v. Environmental Protection Agency (2022) and Loper Bright v. Raimondo (2024), DOGE will work to identify regulations that overstep the bounds of the authority Congress has granted. These rulings clarify that agencies cannot enact major economic or policy decisions without explicit congressional approval. DOGE will compile a list of regulations that should be nullified and present them to President Trump for executive action.
Immediate Suspension and Review of Regulations: Through executive orders, the president will pause enforcement of these overreaching regulations and initiate a full review process for rescission. This action will prevent regulations that were never approved by Congress from continuing to harm businesses and individuals.
Creating a System to Prevent Reviving Illegitimate Regulations: Once regulations are rescinded, DOGE will ensure that future administrations cannot simply reinstate them. Any reactivation of these regulations would require a new act of Congress, ensuring that regulatory power is returned to the people’s elected representatives.
2. Administrative Reductions: Streamlining Federal Agencies
Alongside regulatory rescissions, a drastic reduction in the size of the federal bureaucracy will be necessary. DOGE will target specific reforms to reduce the number of federal employees, streamline agency operations, and focus government efforts on its core constitutional responsibilities.
Identifying Minimum Staffing Needs: DOGE will collaborate with agency leaders to identify the minimum number of employees required to carry out essential functions. With fewer regulations to enforce, many agencies will require significantly fewer staff. As regulations are rescinded, the corresponding workforce reductions will follow.
Cost-effective Employee Transitions: For those whose positions are eliminated, DOGE will support their transition into the private sector, providing incentives for early retirement or voluntary severance. Programs designed to make these exits as seamless as possible will be implemented, ensuring a smooth process for both employees and taxpayers.
Leveraging Executive Authority to Limit Bureaucratic Growth: President Trump will use his authority to amend civil-service rules to curtail administrative overgrowth. This could include actions like large-scale firings or moving federal agencies out of Washington, D.C., to reduce costs and decentralize power.
Restoring Accountability in Federal Agencies: Agencies will be required to return to in-person work, ending the COVID-era trend of remote work. This will incentivize employees who are unwilling to meet this expectation to voluntarily exit, reducing the overall headcount.
3. Cost Savings: Tackling Waste, Fraud, and Abuse
Beyond reducing the size of government and eliminating unnecessary regulations, DOGE will focus on eliminating wasteful spending and ensuring that taxpayer dollars are used efficiently.
Ending Unauthorized Expenditures: A significant portion of federal spending, over $500 billion annually, is either unauthorized by Congress or used for purposes Congress never intended. DOGE will work with the administration to end these wasteful programs, including unnecessary funding to international organizations and progressive groups, while scrutinizing expenditures like the Corporation for Public Broadcasting.
Overhauling Federal Procurement: The government’s procurement system is notorious for waste and inefficiency. DOGE will conduct large-scale audits of federal contracts, suspending payments where necessary to identify and eliminate inefficiencies. This will be especially critical for agencies like the Department of Defense, which has failed repeated audits, indicating a lack of oversight over how taxpayer money is spent.
Targeting the Deficit and Overspending: While entitlement programs like Medicare and Medicaid are often the focus of budgetary discussions, DOGE will tackle the more immediate waste, fraud, and abuse that plagues most federal agencies. Through targeted executive actions, DOGE will curb these excesses without the need for new legislation.
A Historic Opportunity
With a mandate for change and a supportive legal framework, DOGE has the opportunity to make meaningful strides in reducing the size and scope of the federal government. Through regulatory rescissions, administrative reductions, and targeted cost savings, this initiative aims to eliminate wasteful spending and restore accountability in Washington.
The ultimate goal of DOGE is to make its own existence obsolete by July 4, 2026 – the 250th anniversary of the founding of the United States. By then, it is hoped that a leaner, more efficient government will be in place, one that is more responsive to the needs of the people and more in line with the vision of the Founders. If successful, this reform effort will be a gift to the nation, ensuring that future generations inherit a government that is both effective and accountable.
US Officials Say Russia Didn’t Fire ICBM At Ukraine, But A ‘New’ Intermediate-Range Missile
Update(1057ET): Ukraine’s earlier claim that its territory had been struck by an intercontinental ballistic missile fired by Russia is being hotly disputed, hours after widespread reports first appeared. US officials are saying it appears to be a new intermediate-range ballistic missile and not an ICBM which targeted the central city of Dnipro
The NY Times has reported in follow-up of the attack that “several Western officials said that the weapon was not an ICBM and instead was likely an intermediate-range missile that flies shorter distances.”
Zelensky himself had claimed Russia used a new class of missile. “All the parameters — speed, altitude — match those of an intercontinental ballistic missile,” he said. “All expert evaluations are underway.” But US defense officials are contradicting this:
A senior U.S. official said the weapon appeared to be an intermediate-range ballistic missile, adding, “But it is a new type we have been tracking.”
US officials have also called it an “experimental” missile. There’s also been some quibbling among experts are how to characterize the projectiles which were observed hitting Ukraine at incredibly high rates of speed, in terms of rocket size and distance.
Assuming Washington is correct, and that it wasn’t an ICBM, this suggests Zelensky’s hasty verdict is all about threat inflation coming at a time he’s desperately trying to get the West’s attention, arguing in favor of greater NATO military intervention against Russia.
* * *
Ukraine’s Air Force Command says that Russia has, for the first time in the multi-year war, launched an intercontinental ballistic missile (ICBM) targeting the central Ukrainian city of Dnipro. This unprecedented escalation follows Ukraine’s recent use of US-made MGM-140 Army Tactical Missile Systems (ATACMS) and British Storm Shadow missiles to strike military targets deep within Russia. The use of an ICBM is Russia demonstrating its greater capabilities in response to Ukraine’s long-range missile strikes.
A senior Ukrainian military official told the Financial Times that Russia launched an ICBM called “RS-26 Rubezh” that has a range of 3,700 miles and can strike any European capital.
Although RS-26 Rubezh can be used to deliver a thermonuclear warhead or an Avangard hypersonic glide vehicle, Thursday morning’s attack on the Dnipro region was non-nuclear, instead some sort of conventional warhead.
“Using these kinds of missiles, whether RS-26 or a true ICBM, in a conventional role does not make a lot of sense because of their relatively low accuracy and high cost,” Pavel Podvig, a senior researcher at the United Nations Institute for Disarmament Research, wrote on X.
“But this kind of a strike might have a value as a signal,” Podvig added.
And yes, it does.
Malcolm Davis, a senior analyst at the Australian Strategic Policy Institute, told CNN that the ICBM strike on Ukraine is a “message” to Kyiv’s Western backers. He emphasized that this week’s escalations, including the Biden-Harris administration greenlighting Ukraine’s use of ATACMS and Storm Shadow missiles to strike military targets in Russia, have likely prompted this escalation.
Earlier this week, Russian President Vladimir Putin lowered the threshold for nuclear weapons use. He stated, “The use of Western non-nuclear rockets by the Armed Forces of Ukraine against Russia can prompt a nuclear response.”
Davis continued, “Clearly, what the Russians have done here is to take the nuclear warheads off the missile and launch the missile either as an inert missile without anything on it or maybe with some sort of conventional warhead.”
“They are trying to send a message. They’re trying to massively say to the West, ‘Look, the use of these Storm Shadow and ATACMS missiles maybe is challenging Russia’s critical interests.’ And so they’re trying to intimidate us into backing down here,” he added.
Videos posted on X show what could be warheads from the ICBM striking targets in Dnipro.
BREAKING:
New video shows a Russian intercontinental ballistic missile (ICBM) striking Ukraine.
The video shows reentry vehicles from its MIRV hitting the city of Dnipro.
This footage captures a major attack unfolding in Ukraine, with Zelensky claiming it was caused by an ICBM—missiles designed to deliver nuclear or conventional warheads and nearly impossible to intercept.
What’s clear is that the Biden-Harris administration knew exactly what they were doing by provoking Russia with the deployment of ATACMS and British missiles. US officials have since closed the US Embassy in Kyiv “out of an abundance of caution.”
In markets, Goldman’s Ece Kepekci commented on the situation:
“Think particularly in Europe, there is a real geopolitical risk premia now as Ukraine/Russia following a series of escalations. Europe gave up its early rally yday on the back of further missile attacks (early this morning “Ukraine says Russia Fired ICBM”). Off ramps not obvious but again this is not a new conflict and you’re supposed to fade geopolitical escalation. Sentiment has come down quite a bit “the bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was 8.1 vs 21.5 last week.”
Kremlin spokesman Dmitry Peskov told reporters, “It’s a very dangerous position that the outgoing administration is taking,” adding, “There is a new escalation happening.”…
Users on the prediction market platform website Polymarket have bid up the contract “Will a nuclear weapon detonate in 2024?” from 11% at 0400 ET to around 18% at 0930 ET.
Polymarket has made betting on binary events in the news cycle possible…
Trump ends Ukraine war by first 90 days?
Ukraine hits Moscow before 2025?
Russian nuke in space in 2024?
Democrats endgame? Start WW3 before Trump enters the White House?
Most gold and silver investors begin their journey by purchasing modern bullion coins, such as the American Gold and Silver Eagles from the United States Mint—a practical and popular way to invest in precious metals, and how I started as well. However, I soon discovered that the United States once minted gold and silver coins for everyday circulation, not just for investment purposes like today’s bullion coins. As I delved deeper into these classic American coins, I developed a profound appreciation for their elegance, historical significance, and connection to a time when the U.S. dollar was made from and backed by gold and silver. In this article, I aim to share the benefits and joys of investing in these timeless pieces of American history.
Four years after the ratification of the United States Constitution, Congress passed the Coinage Act of 1792. This landmark legislation established the U.S. dollar as the nation’s standard unit of currency, created the United States Mint, and set forth regulations for coinage. The Act designated the silver dollar as the official unit of money and declared it lawful tender. It also introduced three gold coins: the $10 “eagle,” the $5 “half eagle,” and the $2.50 “quarter eagle,” laying the foundation for the nation’s monetary system. The $20 “double eagle” coin containing 0.9675 troy ounces of gold was introduced in 1849 as a means to utilize and market the significant influx of gold from the California Gold Rush.
From 1795 to 1933, the United States Mint produced gold coins designed for everyday use rather than for investment or collecting. During this period, silver coins were commonly used for daily transactions, while gold coins primarily served as a means of savings and wealth preservation. Gold coins were also used for large purchases, such as land, and in commercial transactions. Due to their high value, gold coins were typically owned by the affluent. In particular, most $20 gold double eagles were stored in bank vaults and seldom circulated in everyday life because of their substantial value, even at the time.
Since pre-1933 U.S. gold coins were rarely used in everyday transactions, a significant number of them have survived in excellent condition, including many graded as Brilliant Uncirculated (BU). What I find fascinating is that many of these coins—provided they are not rare dates or strikes—are surprisingly common and can often be acquired at premiums similar to, or even lower than, modern bullion coins. Yet, they carry with them a rich historical legacy! Many reputable bullion dealers, such as SD Bullion, JM Bullion, Money Metals Exchange, and APMEX, offer these remarkable coins, making them accessible to collectors and investors alike.
If your primary goal is to invest in gold while still enjoying a touch of history (as opposed to collecting rare coins), focusing on common-year $20 gold double eagles from the late-1800s and early-1900s is your best bet. As far as classic coins go, these coins typically carry the lowest premiums over the spot price of gold. For instance, SD Bullion currently offers Brilliant Uncirculated $20 Saint-Gaudens double eagles at a 6.05% premium over the spot price of gold. By comparison, the ultra-popular modern 1 oz American gold eagle bullion coin is available at a 5.69% premium. In my opinion, that extra 0.36% premium is well worth it for owning a tangible piece of history!
The smaller $10, $5, and $2.50 gold eagle-series coins are certainly fascinating, and I personally own a few. However, they tend to carry significantly higher premiums compared to the $20 gold double eagles, making them less ideal for investment purposes. Among the $20 gold doubleeagles, the 1907–1933 Saint-Gaudens design is often regarded as one of the most beautiful coin designs in history, which has made it highly sought after. In contrast, the 1849–1907 Liberty Head $20 gold double eagle, while more understated in appearance, is still a desirable piece (and one I also own and appreciate). Notably, the 1933 Saint-Gaudens $20 gold double eagle holds the distinction of being the most valuable gold coin ever sold, fetching an astonishing $18.8 million in 2021 and setting the record for the most expensive coin in history.
In addition to classic American gold coins, I also enjoy investing in classic American silver coins, which were minted for everyday circulation between 1794 and 1970. During this period, dimes, quarters, half-dollars, and dollar coins were made from silver alloys. Today, these coins are a popular way to invest in silver and are commonly referred to as “junk silver,” pre-1965 silver coins, or 90%, 40%, and 35% silver coins. While I own some higher-value U.S. silver coins, such as early 20th-century pieces and silver dollars, the best option for most investors is to focus on common-date silver dimes, quarters, and half-dollars from the mid-twentieth century. These tend to have lower premiums compared to silver coins with greater numismatic value. For finding the best deals on junk silver, I recommend using FindBullionPrices.com, a great resource for comparing prices.
I absolutely love the look, feel, heft, and distinctive “clink” sound of classic American silver coins, which stand in stark contrast to soulless modern non-silver coins. Even when these silver coins have a weathered or slightly tarnished appearance, I find them even more charming, as they carry a tangible sense of history—evidence of the countless hands that have touched and handled them over the years. In fact, I often prefer circulated and weathered silver coins to pristine modern bullion coins because I can freely touch and handle them without worrying about tarnishing or leaving fingerprints. Unlike gold, silver naturally tarnishes, so I feel less guilty about enjoying these historic coins in a hands-on way, adding to their unique appeal.
America’s currency was once backed by and literally made from precious metals, which have served as money par excellence for approximately 6,000 years. However, the U.S. dollar has been steadily devalued since the establishment of the Federal Reserve in 1913. Unfortunately, the Federal Reserve has been a terrible steward of the nation’s currency, enabling excessive government spending by creating new dollars. For instance, within just six years of the Fed’s founding, the dollar lost half of its purchasing power—a trend that has persisted over time.
To add insult to injury, President Franklin Delano Roosevelt took the United States off the Gold Standard in 1933, ceased the minting of gold coins, and banned private ownership of gold. This policy required individuals to turn in their gold eagle coins to the government, which then melted them down. However, many of the pre-1933 U.S. gold coins available today were spared from this fate because they had been stored in European bank vaults, allowing them to survive unscathed and find their way back into the market decades later.
In 1965, the United States stopped minting dimes, quarters, and half-dollars from their traditional 90% silver alloy, replacing it with a cheaper nickel-and-copper composition. This marked yet another significant debasement of the U.S. dollar. As the melt value of the older silver coins soon exceeded their face value, those who recognized their greater worth quickly removed them from circulation. This historical shift explains why these silver coins remain popular among investors and collectors even today.
Finally, on August 15, 1971, President Richard Nixon ended the convertibility of the U.S. dollar into gold for foreign governments, effectively transforming the dollar into a pure fiat or “paper” currency with no intrinsic backing. This pivotal decision removed all constraints on the creation of new money, marking the final nail in the coffin for the dollar’s integrity and purchasing power. Over the ensuing decades, this shift paved the way for rampant inflation, unaffordable housing and other necessities, skyrocketing national debt, and an ever-widening wealth gap. To dive deeper into the steady debasement of the U.S. dollar and its far-reaching consequences, check out my detailed article on ZeroHedge.
Contrary to popular belief, inflation is not simply the rising cost of goods and services—that’s merely the inevitable consequence. True inflation is the expansion of the money supply itself. As Nobel Prize-winning economist Milton Friedman famously stated, “Inflation is always and everywhere a monetary phenomenon.” General inflation is rooted in monetary policy, not in supply shocks like energy crises or droughts that temporarily raise prices for specific goods.
A long-term chart of the U.S. adjusted monetary base, a key measure of the money supply, reveals a staggering 55,440% increase from 1920 to 2020. Curiously, the Federal Reserve stopped publishing this data series in late 2019—a move that raises serious questions. Could they be attempting to obscure the extent of the dollar’s debasement? You decide.
Another key measure of the money supply is the M2 money supply, and its correlation with the price of gold is clear. This relationship highlights why gold serves as an excellent long-term hedge against money printing and inflation. Silver also tracks the M2 money supply, though its price tends to exhibit greater volatility compared to gold.
The long-term U.S. Consumer Price Index (CPI) chart, which dates back to 1800, vividly illustrates how each successive erosion of the dollar’s integrity has led to soaring living costs and a dramatic decline in the dollar’s purchasing power. Remarkably, consumer prices in the United States were relatively stable for nearly a century until the establishment of the Federal Reserve in 1913. This marked a turning point, unleashing inflation on an unprecedented scale. Since the Fed’s inception, U.S. consumer prices have risen more than thirtyfold!
It’s difficult to imagine a time without steady, relentless inflation, but that was the reality throughout much of the 19th century. During this era, money was far sounder, backed by gold and silver, providing a stable foundation for the nation’s economy—despite the lack of modern technology and so-called “sophistication” we have today.
Since its creation in 1913, the Federal Reserve has overseen the U.S. dollar’s staggering loss of nearly 97% of its purchasing power—a decline that shows no signs of stopping, unfortunately:
Another striking way to visualize the dollar’s dramatic loss of purchasing power is by comparing it to gold. Over the past century, the U.S. dollar has lost an astonishing 99.25% of its purchasing power relative to gold.
The harsh reality is that the devaluation of the dollar will continue until it meets the same fate as every paper currency throughout history—complete worthlessness. Unfortunately, it’s not just the dollar that is on this trajectory; the euro, British pound, Japanese yen, Chinese yuan, and other fiat currencies are all on the same precarious path. Governments have always struggled to resist the temptation of money printing, a practice enabled by paper currencies but restrained when money is backed by gold and silver.
As I recently explained, the U.S. national debt has surged past $36 trillion, with annual interest payments now exceeding $1.1 trillion. This staggering figure surpasses federal spending on defense, income security, health, veterans’ benefits, and even Medicare, making it the second-largest expense for the U.S. government—second only to Social Security. This unsustainable fiscal situation will inevitably compel the U.S. to rely heavily on printing more money just to meet its obligations—a vicious cycle that will accelerate the currency’s decline.
Classic American gold and silver coins evoke a bittersweet feeling for me. On one hand, I love that they serve as a tangible reminder of a time when we had sound money; on the other, it saddens me that this era of monetary integrity is long gone. Anyone with wisdom and foresight should safeguard their hard-earned wealth with gold and silver—timeless forms of money that have reliably served humanity for thousands of years.
While I enjoy investing in modern bullion coins and bars, there’s something uniquely special about pre-1933 American gold coins and pre-1965 silver coins. Their history, craftsmanship, and connection to a bygone era set them apart. I believe you’ll understand exactly what I mean once you hold a piece of this history in your own hands.
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Zelensky Admits Ukraine Can Never Regain Crimea By Force
Is this admission a prelude to near-future negotiations under the Trump administration? Ukraine’s President Volodymyr Zelensky has for the first time expressly admitted in a Fox News interview that Ukraine will never be able to take back Crimea by force.
He said that Ukraine could not afford to lose the number of lives that would perish in undertaking a military invasion of Crimea, saying that it would only be restored to Ukrainian sovereignty through diplomatic means. He also warned that if US defense aid is blocked under Trump, his country will ‘lose’ the war.
He did emphasize he’s not ready to cede territory, explaining that Ukraine “cannot legally acknowledge any occupied territory of Ukraine as Russian.”
“That is about those territories… occupied by (Russian President Vladimir) Putin before the full-scale invasion, since 2014. Legally, we are not acknowledging that, we are not adopting that,” he added.
All of this was in response to journalist Trey Yingst pressing Zelensky on whether he’d be willing to give up Russian-held Crimea in order to “stop the bloodshed in Europe”. Crimea had been annexed since 2014 following a popular referendum, but Moscow has always had its Black Sea naval fleet based there.
Yingst asked: “President Vladimir Putin has been very clear Crimea will never return to Ukrainian hands. Are you willing to give up Crimea in pursuit of a peace deal to end this war and stop the bloodshed in Europe?”
“I was already mentioning that we are ready to bring Crimea back diplomatically,” Zelensky responded. “We cannot spend dozens of thousands of our people so that they perish for the sake of Crimea coming back … We understand that Crimea can be brought back diplomatically.”
Elsewhere in the interview, Zelensky was asked about the possibility of US President-elect Donald Trump cutting off US military aid once he returns to the White House.
“If they will cut, I think we will lose. Of course, anyway, we will stay and we will fight. We have production, but it’s not enough to prevail. And I think it is not enough to survive,” he conceded.
At the moment, the Biden administration is trying to rush everything it can to the Ukrainians, having just approved another $275 million arms package.
Biden officials are also still pressing Kiev to step up mobilization efforts. National Security Adviser Jake Sullivan in a recent interview with PBS News Hour described that the real problem allowing for a continued Russian advance is lack of manpower, and not arms or advanced technology.
Zelenskyy criticized German Chancellor Scholz for talking with Russian President Putin on the phone. Our exchange after I asked him why. pic.twitter.com/VeD5szuS1I
Sullivan said in the Monday conversation, “Our view has been that there’s not one weapon system that makes a difference in this battle. It’s about manpower, and Ukraine needs to do more, in our view, to firm up its lines in terms of the number of forces it has on the front lines.”
He emphasized, “Where is the straightest line between Ukrainian performance and inputs? It’s on mobilization and manpower.” The West has been pressuring Zelensky to lower the conscription age, which would be a deeply unpopular move at home.
Continuing Jobless Claims Hit 3-Year-Highs As Initial Claims Tumble To 7-Month-Lows
Just 213,000 Americans filed for first-time jobless benefits last week – the lowest number since April – as natural disasters’ effects fade from the data…
Source: Bloomberg
The overhang from the hurricanes has seemingly ended…
Source: Bloomberg
But WTF is going on in California?
Last week saw initial claims explode higher there..
…and this week claims collapsed…
However, the number of Americans filing for continuing jobless claims jumped back above 1.9 million for the first time since November 2021…
US equity futures reversed earlier losses and are now trading higher despite disappointing guidance from NVDA’s earnings after the market close which led to some pressure in equities this morning. As of 8:00am S&P futures are are up 0.2%, erasing an earlier loss of 0.4%, as traders weighed a lackluster forecast from Nvidia against Snowflake’s 20% premarket surge, which also lifted its peers. Nasdaq futures were up 0.1% with Nvidia erasing its earlier loss of as much as 3.2% after its 4Q forecast fell short of the most optimistic expectations, and even rising 1%. With Bitcoin rising as high as $98,000 MicroStrategy rallied as much as 11% in early hours trading. Bond yields are 2-3bp lower this morning and the USD is unchanged. Fears the Russia-Ukraine war is escalating helped lift oil and gold prices, while European natural gas futures hit the highest in a year. Ukraine reported that Russia fired an intercontinental ballistic missile during an overnight attack, while a Kremlin spokesman called Kyiv’s earlier use of UK Storm Shadow missiles a new escalation. Gold was flat and base metals are largely unchanged. Meanwhile, Trump’s search for a Treasury secretary remains in flux, with no candidate having emerged as the clear favorite. Today, key macro data focus will be Leading Index, Jobless Claims and Existing Home Sales
In premarket trading, the world’s biggest company Nvidia dropped 1%, erasing an earlier loss as much as 3%, after the company assured investors that its new product lineup can maintain the company’s artificial intelligence-fueled growth run, though the rush to get the chips out the door is proving more costly than expected. Softward company Snowflake gained 22% after the company gave a better-than-expected sales outlook, suggesting newly launched products are receiving a strong reception from customers. Here are some other notable movers:
MicroStrategy (MSTR), the largest publicly traded corporate holder of Bitcoin, rallied as much as 11%. The stock is extending gains after it announced an almost 50% increase in planned sales of convertible senior notes, to $2.6 billion, to fund purchases of more Bitcoin.
Baidu ADRs (BIDU) falls about 2% after reporting a 3% sales decline in 3Q, citing weakness in online marketing amid a sluggish Chinese economy.
BJ’s Wholesale (BJ) rises 7% after the warehouse-club operator increased some of its annual projections. Management announced the company’s first membership fee increase in seven years.
Dream Finders Homes (DFH) climbs 8% amid news the company will replace Haynes International in the S&P SmallCap 600 prior to the open on Nov. 25.
Palo Alto Networks (PANW) declines about 2% after posting quarterly results. Raymond James said newly-adopted metrics were above expectations, though traditional metrics measuring activity such as billings and collecting cash saw a meaningful decline.
Traders will be watching US initial jobless claims later Thursday for signs on the strength of the economy and the Federal Reserve’s interest-rate path. An expected decision on President-elect Donald Trump’s nominee for Treasury secretary is also in focus.
“Trump’s win has brought with it an increase in geopolitical uncertainty and that too is weighing on sentiment,” said Daniel Murray, Zurich-based chief executive officer of EFG Asset Management in Switzerland. “Ukraine now has an incentive to gain as much strategic advantage as possible ahead of Trump’s inauguration.”
On Wednesday, Boston Fed President Susan Collins said more rate cuts are needed, but policymakers should proceed carefully to avoid moving too quickly or too slowly. Swaps market pricing indicated a chance of around 50% that the Fed will cut rates again in December.
Europe’s Stoxx 600 was flat, erasing an earlier loss of 0.6%, as investors sentiment was dampened by fears of an escalation of the Russia-Ukraine war and a disappointing revenue forecast from Nvidia. Autos and consumer stocks are the biggest laggards, while insurance is the only sector in the green. Here are some of the biggest movers on Thursday:
Soitec surges as much as 21% as the semiconductor wafer maker’s reiterated full-year revenue and Ebitda outlook for 2025 brings reassurance.
Jet2 shares surge as much as 12%, the biggest jump in two years, after the travel firm reported strong first-half earnings, including a pretax profit beat.
MFE shares rise as much as 11% in Milan trading after the media company reported an increase in Ebit for the nine-month period and said it expects a growth in advertising revenues for the full year.
Halma gains as much as 10%, the most in more than five months, after the health and safety sensor technology group released its first-half results.
Ithaca Energy shares rise as much as 10% as the firm posted its first set of results since completing the acquisition of Eni’s UK upsteam assets.
Zurich Insurance shares rise as much as 2.3% after the insurer outlined upbeat new targets for the next three years that came in above current expectations.
Novartis shares rise as much as 0.8% after the Swiss pharmaceuticals giant company lifted its sales guidance, citing upbeat expectations for new medicines.
JD Sports shares slide as much as 17% after the sports retailer issued a third-quarter sales update.
CMC Markets shares slide as much as 14% after in-line first-half results weren’t sufficient to sustain strong gains in the lead up to the earnings.
Earlier in the session, Asian stocks fell, heading for back-to-back losses, as some of the region’s tech heavyweights slid following Nvidia’s lackluster revenue forecast. The MSCI Asia Pacific Index declined as much as 0.4%, with TSMC and Sony Group among the biggest drags. Indian benchmarks underperformed as Adani Group units’ shares tumbled after US prosecutors charged Gautam Adani with helping to drive a $250 million bribery scheme. Adani’s units were among the worst performers on MSCI’s Asian equity gauge, with flagship unit Adani Enterprises Ltd. down as much as 23%. Sentiment has been week this month as investors brace for Donald Trump’s second presidency and the potential for higher tariffs, particularly on China. The dollar’s recent strength and concerns that the Federal Reserve may be less aggressive in easing also have sapped demand for Asian assets. MSCI’s regional benchmark is down more than 7% from its late September peak.
In FX, the dollar gained and the Japanese yen outperformed G10 peers on haven demand after Ukraine said Russia launched an intercontinental ballistic missile, ratcheting up geopolitical tensions. The USD/JPY fell as much as 0.9% to 154.09 after BOJ Governor Ueda earlier reiterated that he’s closely watching currency impacts on the economy and inflation, though said it’s not possible to predict the outcome of the central bank’s policy meeting. “Direction of travel remains skewed to the downside as Fed, BOJ’s policy normalization takes different form,” Christopher Wong, a currency strategist at Oversea-Chinese Banking Corp. in Singapore, said of dollar-yen moves. “Risk to this view is a case of slowing BOJ policy normalization and/or Fed in no hurry to cut, alongside Trump policy uncertainties.”
In rates, treasuries are slightly richer on the day across front-end and belly of the curve, but TSY futures are off session highs as WTI crude oil futures rise more than 2%. Investors flocked to safe-haven assets with the bid in Treasuries pushing US 10-year yields as much as 3 bps lower to 4.38%, with bunds and gilts also gaining, after Ukraine said Russia launched a intercontinental ballistic missile. At 8:00am ET, rates were ~1bp lower across the front-end with 10-year little changed near 4.40%, outperforming comparable bunds and gilts by around 1bp; curve spreads are little changed. US session includes weekly jobless claims data, four scheduled Fed speakers and an auction of 10-year TIPS. The TIPS auction at 1pm New York time, a $17b second reopening of the July new issue, is the final coupon sale this week; next week’s auctions, to be confirmed at 11am, are anticipated to span Monday to Wednesday ahead of US Thanksgiving holiday on Thursday
In commodities, oil prices gained with WTI up 1.6% to $69.80 a barrel. European natural gas prices also jump. Spot gold climbed $18 to $2,668/oz.
Bitcoin topped $98,000 for the first time on optimism Trump’s support for crypto heralds a boom for the industry as the US pivots to friendly regulations in place of a crackdown. Trump’s transition team has begun to hold discussions over whether to create a White House post dedicated to digital-asset policy.
Looking at today’s calendar, US economic data calendar includes November Philadelphia Fed business outlook and jobless claims (8:30am), October Leading index and existing homes sales (10am) and November Kansas City Fed manufacturing activity (11am). Fed speaker slate includes Hammack (8:45am, 12:30pm), Goolsbee (12:25pm), Schmid (12:40pm) and Barr (4:40pm).
Market Snapshot
S&P 500 futures down 0.5% to 5,910.00
STOXX Europe 600 down 0.5% to 497.80
MXAP down 0.3% to 182.15
MXAPJ down 0.6% to 577.43
Nikkei down 0.9% to 38,026.17
Topix down 0.6% to 2,682.81
Hang Seng Index down 0.5% to 19,601.11
Shanghai Composite little changed at 3,370.40
Sensex down 0.6% to 77,127.48
Australia S&P/ASX 200 little changed at 8,322.96
Kospi little changed at 2,480.63
German 10Y yield little changed at 2.33%
Euro down 0.3% to $1.0514
Brent Futures up 1.1% to $73.61/bbl
Gold spot up 0.6% to $2,666.61
US Dollar Index little changed at 106.73
Top Overnight News
Chinese government advisers are recommending that Beijing should maintain an economic growth target of around 5.0% for next year, pushing for stronger fiscal stimulus to mitigate the impact of expected U.S. tariff hikes on the country’s exports. Reuters
Japanese PM Shigeru Ishiba is set to unveil a $140 billion stimulus package to address challenges from inflation to wage growth, following his election promises to alleviate a cost-of-living crunch. BBG
According to Ukraine’s Air Force Command, Russia hit Ukraine with an ICBM for the first time since Putin launched his war nearly 1000 days ago. BBG
Ukraine is getting more help from Joe Biden. His administration told Congress it plans to cancel $4.65 billion in debt owed by the country, the latest in a series of moves meant to bolster support for Kyiv before Donald Trump takes office. BBG
US officials are meeting with Netanyahu on Thursday as the White House pushes hard for a Lebanon ceasefire. FT
Richmond Fed President Barkin said he anticipates US inflation will continue cooling, even though progress has plateaued somewhat of late. FT
Donald Trump has not yet been fully sold on his top 3 Treasury Secretary Candidates (Warsh, Rowan, or Bessent) as he struggles to find someone both emphatically supportive of tariffs and who would be welcomed by markets. BBG
Marty Makary is reportedly seen as the leading candidate for US President-elect Trump’s FDA nomination: BBG
US ETFs investing in Bitcoin surpassed $100 billion in total assets, fueled by optimism surrounding Donald Trump’s plans to foster the growth of the crypto industry. BBG
The Justice Department on Wednesday said Google should have to sell off its popular Chrome browser as part of a court-ordered fix to its monopolization of the online search market. WSJ
Fed’s Barkin (2024 Voter) says “Fed should not pre-emptively adjust monetary policy ahead of possible changes in economic policy; US is more vulnerable to inflation shocks”, via FT. “Forthcoming rate decision would depend on data.”. “If you got inflation staying above out target, that makes the case to be more careful about reducing rates. If you got unemployment accelerating, that makes the case to be more forward-leaning.”
Fed’s Collins (2025 voter) said some additional rate cuts are needed as policy is still restrictive but she doesn’t want to cut rates too quickly and warned that overly slow rate cuts could hurt the labour market. Collins also stated that the final destination of rate cuts is unclear and monetary policy is well positioned for the economic outlook, while she added monetary policy is not on a preset course and Fed policy decisions will be made meeting-by-meeting.
Fed’s Williams (voter) says sees inflation is cooling and interest rates falling further, adds 2% is the rate that can best balance the central bank’s employment and price stability goals, according to Barron’s
A more detailed look at global markets courtesy of Newsquawk
APAC stocks were mostly subdued after the indecisive lead from the US where geopolitics and Nvidia earnings were in the spotlight. ASX 200 lacked firm direction amid weakness in the consumer-related sectors and after Westpac pushed back its forecast for when the RBA will begin cutting rates to May next year from a prior forecast of February. Nikkei 225 underperformed and tested the 38,000 level to the downside as the Japanese currency nursed some of its recent losses and despite a report that Japan is planning an economic package of around JPY 21.9tln. Hang Seng and Shanghai Comp were uninspired as participants digested recent earnings releases although support was seen in automakers after a MOFCOM official said they are planning the continuation of car trade-in incentives for next year to stabilise market expectations.
Top Asian News
Four Chinese government advisers advocate for a 2025 growth target of around 5% which is similar to this year, while one adviser presses for a growth target of above 4% and another recommends a 4.5%-5% range, while advisers suggested a higher budget deficit could mitigate the impact of expected US tariffs, according to Reuters.
China MOFCOM official said they are planning the continuation of car trade-in incentives for next year to stabilise market expectations.
Chinese banks are seen cutting lending rates in 2025 but may leave lending rates unchanged next month, according to analysts cited by China Securities Journal.
Japan reportedly plans an economic package of around JPY 21.9tln, according to NHK. It was later reported that Japanese Deputy Chief Cabinet Secretary Aoki said the LDP-led coalition is introducing measures to reflect DPP requests as much as possible.
European bourses began the session on a mixed footing, but gradually teetered lower soon after the cash open. A further extension of the downside was seen following updates via the Kremlin’s spokesperson who noted that the storm shadow attack at Russia is a new escalation, via TASS. Thereafter, ABC News reported that it is not confirmed that Russia used a ICBM last night, which helped to lift bourses incrementally off lows. European sectors opened with a slight positive bias, before sentiment soured to show a strong negative bias in Europe. Insurance manages to stay in mild positive territory, largely attributed to gains in Zurich Insurance after the co. announced their 2025-27 targets. Autos are Europe’s worst sector, joined closely by Consumer Products; seemingly weighed on by the defensive bias. US equity futures are modestly lower across the board, and with slight underperformance in the tech-heavy NQ after NVIDIA reported its Q3 results; the Co. is down 3.4% in pre-market trade, despite reporting strong headline metrics, but its Q4 guidance ultimately disappointed on the top-end of analyst expectations. NVIDIA (NVDA) – Shares -3% in pre-market trade; despite top- and bottom line beats, some analysts were seeking firmer guidance for Q4, and were disappointed by slowing growth rates, while some also continue to cite production concerns. Nvidia reported Q3 adj. EPS 0.81 (exp. 0.75), Q3 revenue USD 35.08bln (exp. 33.12bln). Q3 adj. gross margin 75% (exp. 75%), Q3 adj. operating expenses USD 3.05bln (exp. 2.99bln), Q3 adj. operating income 23.28bln (exp. 21.9bln). Exec said Blackwell production continue to ramp into fiscal 2026. Ahead, it sees Q4 revenue at around USD 37.5bln+/- 2% (exp. 37.1bln), and sees Q4 adj. gross margins between 73-74% (exp. 73.5%).
Top European News
ECB’s Villeroy said inflation could sustainably be at 2% in early 2025 and the economy remains resilient, while stated that victory against inflation is in sight in Europe but added the balance of risks on growth and inflation is shifting to the downside. Villeroy said it is possible that US tariffs are not expected to alter significantly the inflation outlook in Europe and the degree of monetary policy restriction should continue to be reduced in which the pace must be determined by agile pragmatism, with full optionality maintained for upcoming meetings.
ECB’s Stournaras says “25bps December rate cut is the right response; should cut every meeting until we reach 2%; neutral rate on average is about 2%”, via Bloomberg TV.
Bundesbank says a significant number of German corporate insolvencies are likely next year with corporate default risk to remain elevated
FX
DXY is higher but with the USD showing a mixed performance vs. peers. Fresh macro drivers for the US remain light and as such, risk sentiment may carry sway for the Greenback. Today’s US slate sees US Jobless Claims, Philly Fed Index, US Existing Home Sales, Fed’s Hammack, Goolsbee & Barr. DXY has been as high as 106.74 but has stopped shy of Wednesday’s 106.91 peak.
EUR on the backfoot vs. the USD with some modest weakness triggered by geopolitical angst surrounding Russia-Ukraine. EUR/USD has been as low as 1.0515 but is holding above yesterday’s 1.0506 floor.
JPY is firmer vs. the USD in what has been a choppy week for USD/JPY. Fresh macro drivers for the US and Japan have been lacking with JPY instead gaining impetus from some of the risk-aversion triggered by tensions between Russia and Ukraine.
GBP on the backfoot vs. the USD and extending downside after yesterday’s failure to hold above the 1.27 mark post-UK CPI. Fresh macro drivers for the GBP are light and the currency is flat vs. the EUR. Today’s docket sees another appearance from BoE’s Mann. Cable’s low for the session is at 1.2624.
Mildly diverging fortunes for Antipodeans with the AUD faring better than the Kiwi. AUD/USD has managed to hold above the 0.65 mark after yesterday’s session of losses. NZD/USD has extended on yesterday’s selling and slid further on a 0.58 handle.
PBoC set USD/CNY mid-point at 7.1934 vs exp. 7.2482 (prev. 7.1935).
Fixed Income
A contained start for USTs with fresh drivers somewhat light after the 20yr auction on Wednesday (which was weak) and as we await the latest weekly jobs data before the latest wave of Fed speakers. USTs have remained in a narrow 109-20+ to 109-25+ parameters; the high of which printed most recently as Russia described Ukraine’s use of storm shadow missiles as a “new escalation”.
Bunds are firmer on the session and at highs given the latest geopolitical updates and specifically commentary from the Russian Kremlin on storm shadow. At a 132.52 peak, having comfortably reclaimed the 132.00 handle after languishing just below the mark throughout much of the APAC session. The morning has seen supply from Spain and France, which was somewhat tepid vs recent outings for Spain, though not sufficiently so to spark any reaction, and France thereafter was well received.
Gilts are bid in tandem with peers but also as the benchmark rebounds from Wednesday’s CPI-induced pressures. However, the odds of a December BoE cut remain stuck at around the 15% mark. Action which has taken Gilts back above the 94.00 handle, surpassing Wednesday’s 93.81 best.
France sells EUR 11bln vs exp. EUR 9-11bln 2.50% 2027, 0.75% 2028, 2.75% 2030, 0.00% 2030 OAT Auction.
Spain sells EUR 4.25bln vs exp. EUR 4-5bln 3.10% 2031, 4.20% 2037 Bono & 1.00% 2042 Green Bono.
UK sells GBP 2bln 0.125% 2026 Gilt via tender: b/c 4.31x and average yield 3.996%.
Commodities
WTI and Brent are firmer on the session, benefitting from the tense geopolitical backdrop as updates out of Russia continue to weigh on general risk sentiment. Benchmarks posting gains of just under USD 1/bbl on the session and in proximity to respective highs of USD 69.84/bbl and USD 73.87/bbl.
Dutch TTF printed a fresh YTD high of EUR 48.15/MW, benefitting from the above with magnitudes more pronounced than in the crude space. The next point of resistance comes into play at EUR 49.81/MWh from early-December 2023.
Spot gold is firmer, benefitting from the tense geopolitical environment and the generally soft risk tone on this and after NVIDIA’s results. Action which has seen havens generally benefit across the board with the DXY, JPY and fixed income bid.
Base metals struggled for direction overnight, but have since slipped into mostly negative territory given the dip in risk sentiment owing to geopolitical updates out of Russia/Ukraine.
US President-elect Trump’s team is reportedly planning to revive the Keystone XL oil pipeline, according to POLITICO.
Geopolitics: Middle East
Israel conducted raids on southern suburbs of Beirut, according to Al Jazeera.
Israeli air strikes on several houses in Beit Lahiya in the northern Gaza Strip killed and wounded dozens, according to medics.
US Senate blocked measures that would have halted sales of tank rounds and joint direct attack munitions to Israel.
Israel’s Channel 14 quoting an Israeli political official reports “It is likely that no agreement with Lebanon will be announced during Hochstein’s visit to Israel” but there is optimism that an agreement to end the war could be reached within a week.
Russia-Ukraine
Western Official tells CNN news that Russia did not use an ICBM last night, Ukraine air force said it was a ballistic missile and declined to characterise it further. Ukraine air force declined to comment, saying the impact was still being assessed. Prior to this, Ukrainian media Ukrainska Pravda say a RS-26 ballistic missile was used to hit Dnipro. The original report was via Ukraine’s Airforce which announced Russia launched intercontinental ballistic missiles from the Astrakhan region in the morning.
Ukraine’s airforce announces ballistic missile attack alert, via Bloomberg; explosions heard in Ukraine’s Kryvyi Rih, via RBC Ukraine.
Kremlin Spokesperson says storm shadow attack on Russia is a new escalation, according to TASS.
Russia’s Foreign Ministry says Russia is open to talks on Ukraine, ready to look at realistic initiatives.
Russian Foreign Ministry spokesperson, on the US missile base in Poland, says this results in an increase to the overall level of nuclear danger. The base has long been a priority target, which can be hit with “Russian new weapons”. Adds, Russia is open to talks on Ukraine, ready to look at realistic initiatives.
US Event Calendar
08:30: Nov. Initial Jobless Claims, est. 220,000, prior 217,000
Nov. Continuing Claims, est. 1.88m, prior 1.87m
08:30: Nov. Philadelphia Fed Business Outl, est. 8.0, prior 10.3
10:00: Oct. Leading Index, est. -0.3%, prior -0.5%
10:00: Oct. Existing Home Sales est. 3.95m, prior 3.84m
Oct. Existing Home Sales MoM, est. 2.9%, prior -1.0%
11:00: Nov. Kansas City Fed Manf. Activity, est. -5, prior -4
DB’s Jim Reid concludes the overnight wrap
Nvidia’s results overnight drew a tepid reaction despite a solid Q3 beat by the world’s most valuable company as its guidance failed to match some of the loftiest expectations. Q3 sales came in at $35.1bn (vs $33.2bn est.) and the earnings surprise the strongest in three quarters. However, the Q4 sales guidance at $37.5bn, was “only” a touch above the average analyst estimate of $37.1bn. The company’s earnings call talked of “very strong” demand for its new Blackwell chips that will begin to ship this quarter, but overall it was deemed to be a slightly underwhelming outcome with Nvidia’s shares down -2.5% in post-market trading. Of course, this has be to put in perspective of the stock’s +195% rally YTD.
Off the back of this, S&P 500 and NASDAQ futures are trading -0.16% and -0.25% lower as I type which overall means this potential high-volatility event has broadly passed without major incident. However, it has dampened sentiment a touch in Asia with the Nikkei (-0.65%) is leading losses with the Hang Seng (-0.14%) also lower. As I type, Chinese equities are reversing losses though with the Shanghai Composite (+0.25%) joining the KOSPI (+0.35%) higher. Also higher is Bitcoin (+3.40%) as it shows no signs of slowing, advancing for a fourth consecutive session, and trading at $97,670 as I type.
Ahead of Nvidia’s results, markets had managed to mostly shake off the negative mood that had dominated the session, with the S&P 500 ending the session flat (+0.002% to be precise) with more than 60% of its constituents higher on the day. The index had traded in the red almost all of the day, having been down nearly -1% early in the session as several concerns weighed on sentiment. Matters weren’t helped by a very weak earnings release from Target (-21.97%), which was the worst performer in the entire index after they cut the earnings outlook. The Magnificent 7 (-0.54%) also dragged on the broader market, with an uptick in volatility seeing the VIX Index (+0.81pts to 17.16pts) rise to its highest closing level since the US election. And there were modest declines in Europe, where the STOXX 600 (-0.02%) fell narrowly back to a fresh 3-month low, while the DAX (-0.29%), CAC (-0.43%) and FTSE 100 (-0.17%) saw slightly larger declines.
The earlier negative market driver was fears of an escalation in the Russia-Ukraine conflict. The geopolitical risk-off tone saw gold (+0.70%) post a third consecutive increase, while the dollar index rose +0.41%. Another related market theme was a notable rise in near-term inflation expectations, with the US 2yr inflation swap up +5.1bps to 2.72%. That’s its highest level since March 2023, right before SVB’s collapse, and it shows how investors have adjusted their expectations relative to early September, when it fell beneath 2%.
With inflation expectations moving higher, markets continued to pair back near-term Fed rate cut expectations, with the market odds of a December rate cut falling to 52% from 59% the previous day. The 13bps of easing now priced for the December meeting is the lowest that it’s been since April. This came as Fed officials continued to strike a patient tone. Fed Governor Bowman said she “would prefer to proceed cautiously” with further easing and Boston Fed’s Collins said that while “some additional policy easing is needed”, the cuts delivered so far “enable the FOMC to be careful and deliberate going forward”.
Global bonds mostly sold off yesterday, with the 2yr Treasury yield up +3.5bps to 4.32%, whilst the 10yr yield was +1.5bps higher at 4.41%. The Treasury sell-off was reinforced by a weak 20yr auction that saw bonds issued 3bps above the pre-sale yield. European yields also saw similar moves, with those on 10yr bunds (+1.3bps), OATs (+2.9bps) and BTPs (+2.8bps) all rising. Meanwhile in the UK, 10yr gilts (+2.7bps) sold off after the latest CPI print was above expectations in October. For example, headline CPI rose to a six-month high of +2.3% (vs. +2.2% expected), whilst core CPI was up to +3.3% (vs. +3.1% expected). So that led investors to dial back their expectations for rate cuts from the BoE, with the likelihood of another cut by February down to 78% now.
Over in the US, there was still no sign of who Donald Trump would appoint as his new Treasury Secretary. The four names widely reported to be in the frame include former Fed Governor Kevin Warsh, Apollo CEO Marc Rowan, hedge fund manager Scott Bessent and Senator Bill Hagerty. Bloomberg reported that Trump was scheduled to hold interviews yesterday with Warsh and Rowan, and that Hagerty had spent much of the day with Trump on Tuesday.
To the day ahead now, and data releases from the US include the weekly initial jobless claims, existing home sales for October, and the Conference Board’s leading index for October. In the Euro Area, we’ll also get the European Commission’s preliminary consumer confidence indicator for November. From central banks, we’ll hear from the Fed’s Hammack, Goolsbee and Barr, the ECB’s Knot, Holzmann, Cipollone, Escriva, Patsalides, Elderson, Lane, Kazimir, Vujcic, and the BoE’s Mann.
NFL Has No Issue With ‘Trump Dance’ Celebrations, Spokesman Says
A spokesperson for the NFL said Wednesday that the league has “no issue” with players celebrating big plays and touchdowns with a dance reminiscent of President-elect Donald Trump, which spread throughout the league following his election win.
As The Epoch Times’ Jack Phillips reports, the dance, popularized by the president-elect at rallies, was first seen years ago when Trump pumped his fists and move them alongside his torso to the “YMCA” song.
Brian McCarthy, a spokesman for the NFL, told The Epoch Times on Thursday that “there’s no issue with a celebratory dance such as what took place Sunday or the previous week with the 49ers on November 10,” answering a question about whether the league would permit the “Trump dance.”
He then noted that the NFL only fines players for unsportsmanlike conduct such as “prolonged or excessive celebration, any violent gesture or an act that is sexually suggestive or offensive.”
San Francisco 49ers star defensive end Nick Bosa, a noted Trump supporter who was seen wearing a “Make America Great Again” hat days before the election, celebrated a quarterback sack with the dance on the Sunday. When he was asked after the game about the dance about what had inspired it, he told reporters: “I think you know the answer to that question.”
Bosa was fined on Nov. 9 not for the dance, but because he wore a “Make America Great Again” hat after the game. McCarthy told The Epoch Times that Bosa received a more than $11,000 fine “for a violation of the NFL uniform and equipment rules for wearing a hat that contained a personal message.”
More players performed the dance on Sunday, Nov. 17, according to an Epoch Times review of footage. Notably, Detroit Lions defensive end Za’Darius Smith, Tennessee Titans wide receiver Calvin Ridley, and Las Vegas Raiders tight end Brock Bowers were seen performing it.
Ridley did the dance while celebrating along with teammate Nick Westbrook-Ikhine during Tennessee’s 23–13 loss to the Minnesota Vikings on Sunday. Smith and also Malcolm Rodriguez performed the dance after a sack in the fourth quarter of Detroit’s 52–6 rout of the Jacksonville Jaguars.
Bowers on Sunday was asked about the dance by a reporter: “I’ve seen everyone do it. I watched the UFC fight last night and Jon Jones did it. I like watching UFC so I saw it, and thought it was cool.” The Raiders then appeared to end Bowers’s media availability after the question and his answer.
He was referring to Jones, the UFC heavyweight champion, also performing the dance after defeating challenger and former champion Stipe Miocic on Saturday night in front of Trump, Elon Musk, Tulsi Gabbard, Robert F. Kennedy Jr., and other members of the president-elect’s entourage. Footage also showed Jones presenting his championship belt to Trump, who smiled in return.
Aside from the NFL and UFC, college players have been doing it for weeks and it’s gone international. Players from the English soccer club Barnsley celebrated a goal with the Trump dance.
With weeks to go before the 2024 election, three former Pittsburgh Steelers stars, Antonio Brown, Mike Wallace, and Le’Veon Bell, appeared alongside Trump at a rally in Pennsylvania. Brown, meanwhile, has been posting pro-Trump content to his popular X account throughout the campaign.
Economists near-universally warn that President-elect Donald Trump’s pledge to impose “across-the-board” 20-percent tariffs on imports will trigger inflation, disrupt domestic industries, and spur global trade wars.
Despite overwhelming critical consensus, Trump calls tariffs “the most beautiful word in the dictionary” and hasn’t backed down since his Nov. 5 reelection.
But the threats may be a “negotiating tactic” to give the United States leverage in mediating trade pacts, Peterson Institute for International Economics (PIIE) President Adam Posen said during a Nov. 14 virtual event.
And it may be working already.
Japan, South Korea, the United Kingdom, Canada, “and maybe some others, are likely lining up offers,” he said. “These offers will be in the form of, ‘We promise to buy more natural gas from the U.S. … We promise to move more production to the U.S.’”
European Commission President Ursula von der Leyen suggested on Nov. 8 that European Union (EU) nations can buy more liquified natural gas (LNG) from the United States to avoid tariffs.
Speaking to reporters after congratulating the president-elect on his reelection, von der Leyen said Trump appeared eager to sustain what the Congressional Research Service calls “the world’s largest trade and investment relationship,” which accounts for 46 percent of global gross domestic product.
About 48 percent of LNG used by EU nations is imported from the United States, according to the U.S. Energy Information Administration. Noting that EU nations import up to 16 percent of LNG from Russia, von der Leyen said there’s room for a deal.
“Why not replace it by American LNG, which is cheaper for us and brings down our energy prices?” she asked.
Posen said this is exactly what Trump’s team wants to achieve.
“The ideal outcome for the Trump administration is they’ve made this threat, a set of threats, but they don’t actually have to implement them, and they get these goodies,” he said.
In the short term, Posen said, some nations may acquiesce. “They’ll say: ‘Okay, we don’t want to be on the bad side of the U.S. We don’t want a bad side of a President Trump.’ But in [the] medium-term, two to four or five years out, I think the reverberations could be quite large.”
Responses from “like-minded U.S. allies” will differ from those from China, Mexico, and nonaligned nations, such as India and Indonesia, he said.
Allies are “probably just going to try to make nice with Trump: ‘We’re going to be aligned with the U.S. on national security and, therefore, against China,’” Posen said. “We should just … try to be on the inside of a ‘Fortress America economy’ and grow with them.”
There are at least two problems with this scenario, he said. “Getting these goodies is really not necessarily going to solve a bunch of problems. A number of people close to the president-elect believe trade deficits are really a big deal.
“These measures are likely to actually increase U.S. trade deficits because they’ll drive up the dollar, drive up inflation.”
Posen said the second problem is that “this is not a one-round game,“ adding that ”once this happens … the question is, how do economies adapt and how do they cope?”
“Maybe in that sense … people start building the U.S. out. That’s something we’re going to watch,” he said.
The CSCL East China Sea container ship sits in a berth at the Port of Oakland in Oakland, Calif., on June 20, 2018. A 2023 study estimated that under Section 301 of the Trade Act of 1974, tariffs decreased imports from China by 13 percent each year from 2018 to 2021. Justin Sullivan/Getty Images
‘Asymmetric Trade Warfare’
Without an effort to renegotiate trade deals before imposing “across-the-board” tariffs, which also would slap a 25-to-100 percent fee on imports from Mexico, “I think the Trump administration is underestimating how other countries might react,” he said.
A 60-percent tariff on imports from China will spur “asymmetric trade warfare,” Posen said.
“If the U.S. says, ‘Well, we don’t want steel, we don’t want batteries, we don’t want EVs from China’ … then the Chinese can say, ‘Well, we don’t want Hollywood movies, we don’t want American video games, we don’t want American accounting firms,’” he said.
Rep. Brad Sherman (D-Calif.) is among those in Congress lobbying for a hard line against imports from China, calling on the Biden administration to slap “an automatic 25-percent tariff on all China goods” during a February 2023 House hearing.
“I represent Hollywood. Let me give you an example of my constituent’s issues with China,” he said. “Hollywood is told they can only get 40 movies into China each year. That means if you make a movie critical of China, that doesn’t go to China.
“But it also means that none of your movies are going to China. They control it and do it with lobbyists, and that means China can control what Congress does.”
But Posen said China will remain “a special case,” noting Elon Musk “is going around saying to people in China: ‘Count on me. I’ll keep things from getting out of hand.’”
He said Mexico is also “a special case, unfortunately for Mexico.”
“There’s so many issues where the Trump administration is going to play hardball, on the border, on drugs, on their new judiciary reforms, on their energy deregulation, or lack thereof, in addition to blocking Chinese investment in Mexico and then reviewing [the United States–Mexico–Canada trade pact].”
According to a Coalition for a Prosperous America 2023 analysis, annual direct China investment into Mexico quadrupled between 2007 and 2016. In 2021, Chinese companies invested $385 million in Mexico.
If the Trump administration imposes a 25-to-100 percent tariff, Posen said, “Mexico is going to be in trouble.”
“I’m not sure how they’re going to react,” he said.
The Trump administration may also not foresee responses from “the big emerging markets” such as India, Indonesia, Brazil, Poland, Turkey, Nigeria, and South Africa, he said.
“The Biden administration did a terrible job of engaging with these countries, kept using rhetoric like, ‘You’re our friends … our allies,’ and didn’t offer anything,” Posen said.
Paying lip service to “friend-shoring” is not enough, he said, citing Indonesia’s recent deal with China as a lost opportunity unlikely to be reversed for a generation.
“I think we’re going to see a lot of that. And so these big emerging-market countries with geopolitical strength are going to actually do pretty well, and they’re probably going to successfully play off the U.S. and China,” Posen said.
