This probably goes in the ‘must watch’ category.

Tucker Carlson delivered an insightful speech at last weekend’s Risk On360! Global Success Conference in Las Vegas, where he began by explaining how just about everyone he knows is “angry and paranoid.”

Always trust your gut. If you feel like they’re lying to you, they are. pic.twitter.com/zkKYtRUbrf

— Tucker Carlson (@TuckerCarlson) November 21, 2023

“I flew out here across the country this morning and spent five hours texting people … and I gotta tell you, every single person I texted, with the exception of my wife — who’s not on the internet at all — was angry and paranoid,” said Carlson.

“Seriously, and these are not crazy people. These are normal good people with like kids and stuff. With a vested interest in Americans’ success. These are not the burn-it-down caucus. These are the, you know, these are the people you want voting.”

Trust your intuition

Carlson suggested that people need to trust their gut, expressing a strong belief that the upcoming year would be particularly chaotic, and unlike anything the country has gone through.

“Your gut is the one thing that doesn’t lie to you. Your gut only has your interest in mind. It is not trying to sell you a product, or convince you to vote for it,” he said, suggesting that people use their intuition going into the upcoming chaos.

“I’m just telling you once again, what you already know, which is this is going to be — the next year is going to be, I think I’d bet my house on it, really like nothing we’ve ever seen in the country. And everyone can kind of feel that. You know, most of our perceptions come through intuition rather than reason.” said Carlson, adding “If something bad is about to happen, everybody gets jumpy and everybody’s really jumpy right now.”

“But if you’re close to your dog, you know, the dog knows exactly what’s going on … they just watch and they feel. And people are very much the same. And if something bad is about to happen, everybody gets jumpy. And everybody’s really jumpy right now,” Carlson continued.

Past the political stage

Tucker described politics as “a human-conceived system whereby civilized people settle their differences without violence, and by consensus,” and parties negotiate for an outcome that is a compromise on both sides.

“We’re past the political stage. Nothing that is happening now can be explained through conventional political terms,” Carlson opined. “There is no upside to the great trends of our age. So why are they doing that? What you’re seeing is evil done for its own sake.”

Tucker also criticized the transgender children’s movement, saying “There’s no upside to pushing transgenderism on our kids. Period. None… So why are they doing it?”

“If 40% of the girls in your 8th grade class identify as non-binary, that’s being pushed on them. What you’re seeing is evil done for its own sake.”

Tucker: “We’re past the political stage. Nothing that is happening now can be explained through conventional political terms. There is no upside to the great trends of our age. So why are they doing that? What you’re seeing is evil done for its own sake.” pic.twitter.com/LRh1wJgFPV

— TheBlaze (@theblaze) November 21, 2023

Dire state

Turning to politics, Carlson offered a bleak assessment of the current landscape. He described the presidential race as a reflection of the country’s deep-seated issues, with candidates who are either out of touch or embroiled in controversy. This scenario, according to Carlson, is not just political but a fundamental shift in the way power is being exercised and contested in the U.S.

“You’ve got two people people running for president — one of them is literally senile,” he said, adding that Biden is “not running” the show at the White House, “Yet he’s standing for reelection at the age of 80.”

Trump, on the other hand… “Every time he gets indicted and every time they tack years onto this potential sentence, he becomes more popular — and now he’s winning.”

“Nothing that is happening now or that has happened for the last five or six years can be explained through conventional political terms.”

Woke liars

“It takes a very rare person to lie in the way that we’re being lied to and it takes a very rare moment to see lying at this scale,” said Carlson. “But the final fact is that they’re not just lying. They hate the truth. They’re offended by things purely because they are true.”

Tucker: “It takes a very rare person to lie in the way that we’re being lied to and it takes a very rare moment to see lying at this scale. But the final fact is that they’re not just lying. They hate the truth. They’re offended by things purely because they are true.” pic.twitter.com/H8wZFw5b7P

— TheBlaze (@theblaze) November 21, 2023

Empire of Lies

Carlson also lashed out against wokescold censors such as Media Matters, which Carlson described as “a censorship organization funded by George Soros and others who hate Western civilization designed to prohibit people from saying certain things,” adding “Well, the things they’re saying are 100% true. That’s why they prohibit it.”

“You cannot punish people for telling the truth period or else you become an Empire of lies,” he said.

Tucker Carlson dropping truthbombs:

“Media Matters is a censorship organization funded by George Soros and others who hate Western civilization designed to prohibit people from saying certain things. Well, the things they’re saying are 100% true. That’s why they prohibit it.” pic.twitter.com/KufEZn539O

— Citizen Free Press (@CitizenFreePres) November 22, 2023

At the end of the day, Carlson advised people to retain their dignity, self-respect, and most importantly, their commitment to the truth.

“The right to say what you actually think,” said Carlson, “is the line” between freedom and slavery.

Authored by Michael Clements via The Epoch Times (emphasis ours),

Department of Justice wants high court to find that felons lose Second Amendment rights because of disregard of the law whether or not they’re violent.

The U.S. Department of Justice wants the U.S. Supreme Court to deny a Pennsylvania man his Second Amendment rights for making false statements to obtain food stamps in 1995 in Garland v. Range.

Although the 3rd Circuit Court of Appeals found in his favor, lawyers for Bryan David Range are joining the DOJ in seeking to probe the limits of the June 2022 decision in New York State Rifle & Pistol Association v. Bruen.

The high court hasn’t decided whether to hear the case.

According to court documents, in 1995, Mr. Range’s wife understated their household income on an application for public assistance. Mr. Range took responsibility for the act and pleaded guilty to making a false statement when applying for food stamps in the Court of Common Pleas of Lancaster County, Pennsylvania.

He was sentenced to three years of probation.

Court records show he completed his sentence without incident. He also paid $2,458 in restitution, $288.29 in costs, and a $100 fine.

Mr. Range’s criminal history is limited to minor traffic infractions and fishing without a license. Although the conviction is a misdemeanor in Pennsylvania, federal law recognizes any sentence of two years or more as equivalent to a felony.

In 1998, he attempted to purchase a deer rifle and was rejected. His wife thought the rejection was an error and bought the gun for him as a gift, according to court documents.

Years later, Mr. Range tried to buy a firearm and was rejected again. It was then that he learned that the 1995 conviction was the reason. Mr. Range sold his rifle to a firearms dealer.

He sued in the U.S. District Court for the Eastern District of Pennsylvania for an injunction that would allow him to possess a firearm. The court ruled that Mr. Range couldn’t own a gun as a convicted felon.

He appealed that decision in 2021, and as that appeal was working its way through the courts, the Bruen decision was released.

Under Bruen, the government must show that gun control laws align with the text of the Second Amendment and the history and tradition of U.S. gun laws.

The Court of Appeals for the 3rd Circuit ruled that, under Bruen, there was no historical analog for depriving offenders like Mr. Range of their Second Amendment rights.

He claimed that the courts have historically considered “dangerousness” as a factor in determining whether to revoke a Second Amendment right and that he wasn’t convicted of a violent crime.

A majority of the 3rd Circuit Court of Appeals found that the government hadn’t demonstrated a historical analog for taking away Mr. Range’s Second Amendment rights. The court expressly refused to rule on his dangerousness argument.

“We need not decide this [dangerousness] dispute today because the Government did not carry its burden to provide a historical analog to permanently disarm someone like Range, whether grounded in dangerousness or not,” the decision reads.

In its petition, the DOJ responded that American history shows a consistent pattern of revoking felons’ Second Amendment rights. DOJ lawyers wrote that dangerousness isn’t a requirement under Bruen.

According to the DOJ petition, Mr. Range’s conviction places him in “a category that properly excludes those who have demonstrated disregard for the rule of law through the commission of felony and felony equivalent offenses [from owning guns], whether or not those crimes are violent.”

They wrote that Mr. Range’s case falls under the same law as Zackey Rahimi’s case in USA v. Rahimi and should be decided in light of the court’s decision in Rahimi.

“After deciding Rahimi, the Court should either (1) grant this petition, vacate the court of appeals’ judgment, and remand the case for reconsideration in light of Rahimi or (2) grant plenary review in this case or in another case that provides a more suitable vehicle for resolving Section 922(g)(1)’s constitutionality,” the DOJ petition reads.

Violence Versus Nonviolence

Mr. Rahimi is an Arlington, Texas, drug dealer who abused his girlfriend and had a penchant for shooting at people who made him angry, according to court documents.

In 2019, his girlfriend petitioned the court and won a domestic violence restraining order against him under 18 USC 922 (g) (8). That federal law bars anyone subject to such an order from possessing or purchasing firearms.

After the order, which Mr. Rahimi reportedly agreed to, was issued, he assaulted another woman and was subsequently involved in at least five more shootings.

He claims 18 USC 922 (g) (8) is unconstitutional.

In their response to the DOJ petition, Mr. Range’s lawyers asked the court to hear his case during the same term as the Rahimi case.

“These issues are complementary and important, and it would be beneficial for the Court’s decision-making to consider both during the same Term,” Mr. Range’s response reads.

The DOJ lawyers disagree. They say the cases should be decided in the order in which they were received.

“Because the Court is already considering closely related Second Amendment issues in United States v. Rahimi, plenary review is not warranted at this time,” the petition reads. “The Court should instead hold the petition for a writ of certiorari pending its decision in Rahimi and then dispose of the petition as appropriate.”

A mere hours after Netanyahu’s cabinet approved a major hostage and ceasefire deal with Hamas, Israel conducted airstrikes against Damascus, specifically targeting a town known for its revered Shia shrine which is frequented by Iranian pilgrims.

Syria’s state SANA cited a military source as saying, “At approximately 3:15 p.m. this afternoon, the Zionist enemy carried out an air attack with two missiles from the direction of the occupied Syrian Golan, targeting some points in the vicinity of the city of Damascus.”

“Our air defense forces responded to the aggression, shot down one of the missiles, and the losses were limited to material losses,” the official statement continued. 

The specific location is being widely reported as Sayeda Zainab, which lies south of Damascus. Black plumes of smoke were seen rising over the Damascus suburb in the early morning hours.

An unidentified building was demolished in the airstrikes, local media reports. Israel frequently says it targets ‘Iranian weapons depots’ or else Hezbollah related sites.

It remains to be seen whether Hezbollah will adhere to the Israel-Hamas truce, which is set to begin 10am Thursday (local) and is scheduled to last for four days in its initial phase.

Lebanese media reports say Hezbollah has agreed to respect and adhere to the truce, after daily rocket fire into northern Israel, per regional reports:

A ceasefire deal recently approved by the Israeli government that would see the release of hostages from Hamas will also apply as a truce on the northern border with Lebanon, according to a Lebanese report in Nidaa al-Watan.

“Hezbollah will adhere to the ceasefire on the condition that Israel does too,” the first report announced on Wednesday morning, following a meeting between the leaders of the Lebanese and Palestinian terrorist organizations.

After striking a truce with Gaza, Israel promptly bombed the outskirts of Sayyidah Zaynab shrine in Damascus.

This shrine of the Prophet Mohammad’s granddaughter is so important to Muslims that it drew Hezbollah, Iranians and Iraqis into the Syrian war. pic.twitter.com/DCkcyJSjaG

— The Cradle (@TheCradleMedia) November 22, 2023

However, other sources contradict these claims and say that Hezbollah will not observe the truce. 

Additional questions remain as to whether during the truce period Iran-backed militias in Syria and Iraq will halt their attacks on US bases. This week militants in Iraq published and circulated the following footage:

The Islamic Resistance in Iraq released scenes of its operation targeting a US convoy at the Mosul Dam/Al-Muhaywir village. pic.twitter.com/y7WI9Jju51

— The Cradle (@TheCradleMedia) November 22, 2023

Regardless of whether the Israel-Hamas truce holds, regional militants are likely to keep up the pressure on the Pentagon presence in Iraq and Syria. Along with Damascus and Tehran, Russia and Turkey also want to see US troops depart. In Turkey’s case, it has long accused the US of backing Kurdish ‘terrorists’ as it sees no distinction between the outlawed PKK and the Syrian Kurdish groups US advisers are assisting.

By Michael Every of Rabobank

“Wars without Gun Smoke”

The key Fed release yesterday was summed up by Philip Marey as “minutes of inactivity”: in short, the Fed are on hold, the decline in bond yields is due to soft data, and if those data heat up again, it will be yields moving, not the Fed. The FOMC feel they are winning the war against inflation without having to use more ammunition because of the high (rates) ground which they control. Yet they will fire again if needed, and waiting to win is a very different thing from giving up the high ground and beating their swords into ploughshares… or shares of any kind. Markets blind-sided by Covid in 2020, inflation in 2021, war and inflation in 2022, and now more war in 2023, are still failing to grasp that the world has changed even if they haven’t, and 2024 is not going to be the ‘new normal re-run’ they think it is.

ECB President Lagarde also reiterated it’s “too early to start declaring victory” vs. inflation, and that she would be prepared to hike rates again if needed; that’s despite Europe sliding into recession, and Germany into deeper structural dysfunction as its constitutional court kneecaps its ability to borrow.

Even where higher asset-prices are loved, such as Australia, the war vs. inflation isn’t over. The RBA is threatening that if wage inflation stays at 4% and productivity stays much lower, rates will have to rise again. Now apply the same logic to the rest of the West, as everyone grapples with high nominal and, increasingly, real wage growth vs. ultra-low productivity, UK data being the latest awful example.

Moreover, inflation also depends on the geopolitics of a Cold War with hot flashes that encompasses the global role of BRICS11 (10, excluding Argentina) commodities, plus Chinese goods made with them, vs. the financialised world of the US dollar. See the recent EBRD paper underlining the surge in the use of CNY for international settlement for many in the Global South trading with Russia. If Western central banks try to roll out large rate cuts early in 2024, they will be shocked to find that all they will likely get is much weaker FX, a new surge in commodity prices, then with Western firms using their concentrated pricing power to keep margins high, and then higher wage inflation. We just went through that, nothing has changed structurally for the better, and much has got worse, and yet some seem to have already forgotten the painful lessons.

More clearly in the realm of geopolitics, at time of writing we were on the cusp of an Israel-Hamas ceasefire and the release of at least some of the hostages being held. Yet the gun smoke will clear for a while, then return. Indeed, the US is close to classifying Yemen’s Iran-backed Houthis as terrorists (making the administration’s past push to end Saudi Arabia’s war against them look awkward in hindsight), and has also stated that Iran is ultimately responsible for the seizure of the commercial ship in the Red Sea at the choke point of the Bab el-Mandeb at the end of the Suez Canal. Again, anyone thinking this is close to a 2024 low-flation resolution has a very low resolution grasp of how this volatile region works.

Meanwhile, the US has stepped up joint naval patrols alongside the Philippines, raising tensions with China; and one of China’s most modern PLA-N vessels, the landing ship Longhushan, is on fire – so smoke without guns. We are also a day closer to the Friday deadline for filing for Taiwan’s 13 January presidential election, and for now the KMT/TPP alliance is still off, meaning the pro-independence DPP candidate, current vice-president Lai, is best placed to win. Watch this space.   

Relatedly, I want to share a recent paper from the journal International Security titled ‘Wars without Gun Smoke: Global Supply Chains, Power Transitions, and Economic Statecraft’. It shows that while the conventional wisdom is that conflict is highly likely during a power transition between declining and rising powers — the Thucydides Trap, though who fires first is disputed — global supply chains now provide new economic weapons to wage these conflicts peacefully, and businesses on the front lines can make it harder or easier for great powers to do so.

The authors argue that as a rival dominant power and a rising power approach power parity they face structural incentives to use economic statecraft to decouple their economies to either retain dominance or gain it – which we see today. The resulting threat to businesses’ profits then changes business-state relations. Logically, when businesses support their home state’s geostrategic goals, it becomes easier for that state to sanction its adversaries or implement industrial policies. But when a business is at odds with its home state, it undermines the national agenda. Business-state relations –the degree of cooperation between businesses in global supply chains and the home state that has jurisdiction over them– therefore have security consequences because they shape the effectiveness of economic statecraft. As the paper puts it, “much like morale on the battlefield, cooperative relations are a force multiplier for economic statecraft and conflictual relations are a force divider.”

Crucially, the paper argues that high-value businesses within the dominant power tend to oppose their state’s use of economic statecraft, whereas low-value businesses within the rising power tend to cooperate with their state’s use of economic statecraft.

We are given the example of how the City of London stopped the UK from using sanctions against Germany back, or even undertaking a small preventative war in 1905. We also have Norman Angell’s pre-war paeon to free trade as the route to world peace, ‘The Great Illusion’, which he recanted after the war. Today, we can look at US Fortune 500 titans selling goods to neutral countries while pretending not to sell to Russia, and/or paying $40,000 a head to give China a standing ovation. Meanwhile, on the other side we have team players for China, Inc., and echoes of the Lenin quote: “The capitalists will sell us the rope which we will use to hang them.” 

This deserves a mention for markets as they look ahead to 2024 in hope for three key reasons:

1. Because it implies imminent and permanent Western decline, with a vast impact on every asset class far beyond myopic calls for imminent rates cuts: the latter would likely accelerate that worrying trend in some key respects.
2. Because resisting that historical/current decline suggests vastly more coercive economic statecraft within the West, with huge implications for many businesses and asset classes, as we are incrementally seeing already: again, 2024 rate cuts do not fit the bill in isolation, or perhaps at all.
3. Because we know what happened in 1914, and are not short of flashpoints at the moment.

Put that in your peace pipe and gun smoke it. On which note, it seems OpenAI and Sam Altman might be doing exactly that, and he may not join Microsoft after all. This entire farcical episode suggests someone was smoking something.

More so given some opinions that OpenAI is not just working on a ChatGPT that can replace white-collar jobs writing reports (Shock! Horror! For the people who spent decades writing reports saying it was a good idea to do this to blue collar workers), but on an AGI (artificial general intelligence) that is Skynet from Terminator or the Machines from the Matrix. And that tech could maybe now end up at a profit-maximizing firm that gave the world Windows Vista. Somehow that (tendentious yet) potential existential threat also gets overlooked by those thinking about stock prices and/or hoping for 2024 rate cuts.

I for one welcome our new Machine Overlords. Unless they also start talking about rate cuts.  

Oil prices are down hard this morning after OPEC+ postponed its meeting amid Saudi dissatisfaction with other members’ oil production levels.

“I think we need a cut,” Pierre Andurand, the renowned oil trader and founder of Andurand Capital Management, said in an interview with Bloomberg television earlier on Wednesday.

“The Saudis will probably want the other countries to cut as well, so I think it’s going to be a negotiation.”

The situation for oil bulls was not helped by a massive crude build reported by API last night.

API

• Crude +9.05mm (+100k exp)

• Cushing +640k

• Gasoline -1.79mm (-600k exp)

• Distillates -3.51mm (-600k exp)

DOE

• Crude +8.70mm (+100k exp)

• Cushing +858k

• Gasoline +750k (-600k exp)

• Distillates -1.02mm (-600k exp)

The official data confirmed API’s big crude build (though a small bit lower) (and a build at Cushing) while Gasoline stocks rose in the official data (versus drawing down from API). This is the 8th straight weekly draw for Distillates stock…

Source: Bloomberg

The SPR remained flat for the seventh week in a row – despite being at prices where the Biden admin said they would refill…

Source: Bloomberg

US Crude production was flat at a recod high 132.mm b/d once again while the trend in rig counts continues lower…

Source: Bloomberg

WTI was trading around $74 ahead of the official data and barely moved on the print…

“If you are in OPEC+ shoes, they must be thinking that something needs to be done,” Christof Ruehl, senior analyst at Columbia University’s Center on Global Energy Policy, said on Bloomberg television.

Yet “it will be more difficult for them to do something than people expect. It’s hard to see how they could get on the same page.”

Meanwhile, although gas prices are down significantly from their summer highs, we note they are still 21% above average for Thanksgiving week…

Get back to work Mr.Biden!

Authored by Simon White, Bloomberg macro strategist,

Stocks may end up with nosebleed valuations similar to the tech bubble if the US avoids a near-term recession. This, along with a probable re-acceleration in inflation next year, makes the Federal Reserve’s next move more likely to be a hike.

US shares are already getting expensive, but that doesn’t mean they can’t get more expensive yet before hitting a wall.

The equity risk premium for the S&P 500 (trailing 12-month earnings yield versus US 10-year yield) is close to zero, making stocks as pricey as they’ve been versus bonds since 2002.

Generally the stock-bond ratio moves inversely to the ERP. Recently bonds have been outperforming stocks, but to see much lower yields would likely need much clearer signs of an impending downturn, and that does not look the case at the moment. Growth is slowing, but there are few signs it will soon become recessionary, with several reliable leading data points showing positive momentum.

The stock-bond ratio is thus poised to begin rallying again, with stocks rising more than bonds, and the ERP is set to become more negative. It became deeply negative at the height of the dotcom bubble in 1999/2000, and there’s nothing to say such freneticism won’t happen again.

That will complicate the Fed’s task as growth slows while financial conditions loosen. But add in inflation that is showing signs it will reheat next year, and the balance of risks starts to tilt in favor of the next move being another rate hike.

The megacap-shaped elephant in the room is – how is the ERP skewed by the biggest stocks?

The Bloomberg Magnificent 7’s ERP is already deeply negative. The remaining stocks, proxied by the S&P equal weight index, are less expensive, but at ~140 bps, are not exactly cheap.

Still, the S&P 500’s P/Es in 2000 had a similar distribution to today, with some stocks with very high valuations, but many others with lower valuations.

Nonetheless that did not stop the worst bear market since 1929 taking place after the index peaked in 2000.

After soaring in September (by the most in three years), on the back of a 92.5% MoM surge in non-defense aircraft spending, it is no surprise that durable goods orders were expected to decline MoM in preliminary October data released this morning.

Against expectations of a 3.2% MoM decline, early October data actually plunged 5.4% (and September’s 4.6% jump was revised down to +4.0%).

Source: Bloomberg

This dragged the YoY change for Durable Goods Orders down to just 0.9% (and that is nominal, not inflation-adjusted).

Core capital goods shipments, a figure that is used to help calculate equipment investment in the government’s gross domestic product report, were little changed for a second month.

Defense aircraft spending fell 30.9% MoM (NSA), non-defense aircraft spending plunged 55% MoM (NSA), and overall defense orders fell 11.6% MoM (NSA)…

Source: Bloomberg

We’re gonna need more war…

The number of Americans filing for jobless benefits for the first time tumbled to just 209k (from 233k the prior week). However, at the same time, un-adjusted claims jumped to 238.7k – the highest in four months…

Source: Bloomberg

The surge in unadjusted claims was led by California…

Continuing Claims dipped from 1.862mm to 1.84mm last week, still hovering near two-year highs…

Source: Bloomberg

However, it’s going to get worse, as Goldman reminds us that ongoing seasonal distortions have increasingly weighed on the level of continuing claims over the last six months, and we now expect that the reversal of those distortions could exert a cumulative boost of 375k to the level of continuing claims between now and March.

We’re gonna need more seasonal adjustments.

Futures reversed earlier losses and traded at session highs as bond yields slid to two-month lows and oil tumbled after Bloomberg reported that the OPEC+  meeting scheduled for this weekend could be delayed amid Saudi dissatisfaction with member production levels. As of 7:40am ET, S&P futures rose 0.24%, trading at 4,562 and Nasdaq futures gained 0.4% as Wall Street headed for one of the best November rallies on record. Nvidia pared a decline in pre-market trading after investors initially reacted coolly to its latest quarterly report; the stock traded in a 6% range last night when its Q4 guidance was in the middle of the whisper range. Microsoft gained about 0.7% as Sam Altman returned to OpenAI after days of drama. The decision to restore him to the world’s best-known artificial intelligence startup marks a victory for biggest backer Microsoft, which worked with fellow investors to reverse Altman’s firing. Treasury yields dipped to two-month lows at 4.37%, while the USD rebounded from its weakest level in almost three months; commodities are under pressure ex-metals; gold remained just over $2000 as bitcoin recovered some of its overnight losses that dragged it below 35,000 following news of the Binance/CZ fine and settlement. News of a temporary halt in fighting between Israel and Hamas failed to ignite broader risk-on sentiment, with investors instead looking to data including mortgage apps, jobless claims, durable- and capital-goods orders and consumer sentiment, for clues on the direction of monetary policy.  

In premarket trading, Nvidia shares gained 1% as the chipmaker reported third-quarter results that beat expectations and gave an outlook that was seen as strong but not stellar. The company, a major beneficiary of the AI trade, has climbed more than 240% this year as of its latest close. Analysts were positive on the results and forecast. Other MegaCaps are flat to up small. Farming equipment giant Deere reported its results and missed expectations, sending its shares lower. General Motors gained after the CEO of its troubled self-driving car unit resigned. Here are some other notable premarket movers:

• Autodesk shares fall 5.8% as analysts tracking the software company flagged a weak FY25 revenue growth forecast. The guidance overshadowed an otherwise positive third-quarter result. Piper Sandler downgraded the stock based on the company’s tepid growth rate and tempered margin expectations.
• HP Inc. shares fall 2.4% after the PC and printer company’s first-quarter forecast for adjusted earnings was weaker than expected at the midpoint, with analysts saying this reflected a tough macro backdrop and weakness in its commercial business. Some brokers, however, suggested it could mean a recovery is in the cards.
• Microsoft shares rise 0.7% as OpenAI said it would bring back Sam Altman and overhaul its board to bring on new directors including Larry Summers. The stock is also outperforming other major US technology and Internet companies that are trading lower in premarket trading.
• Virgin Galactic shares slide 6.6% after Morgan Stanley cut its recommendation on the stock to underweight from equal-weight, noting the rocket company has no planned revenue-generating flights from mid-2024 to 2026.
• Urban Outfitters drops 7% after the clothing retailer reported third-quarter comparable sales for its namesake banner that missed estimates.
• Guess slumps 15% after the clothing company reported net revenue for the third quarter that missed estimates.

Minutes of the Federal Reserve’s last rates meeting showed policymakers united around a strategy to “proceed carefully” on future interest-rate moves and base any further tightening on progress toward their inflation goal. Swap contracts linked to Fed meetings currently price in around a 25% probability of a first rate cut in March, slightly lower than before publication of the FOMC minutes.

“The fact that markets are considering the potential for rates to be lowered in the first quarter at all does indicate that it’s going to be pretty hard slating for the US dollar at this stage,” Sean Callow, senior currency strategist at Westpac Banking Corp, said on Bloomberg Television. As the Fed’s December meeting approaches, “markets would be looking for a change of language that really dials down the threat of further hikes,” he said.

European stocks also rose, with the Stoxx 600 rising up 0.4%, led by gains in the real estate, telecommunication and technology sectors. Real estate was Europe’s top-performing sector on Wednesday amid broad gains in the region, with bond yields mostly lower. The Stoxx 600 Real Estate Index rises 2% as of 12:50pm in London, with all its components in the green; subindex is trading near levels last seen in March. The technology sector also outperformed as accounting-software maker Sage Group surged after an earnings beat. Steelmaker Thyssenkrupp AG climbed after reporting fourth-quarter results. Kingfisher Plc dropped after the home-improvement retailer lowered profit guidance. Here are the biggest European movers:

• Sage shares gain as much as 11% to a record high after the software company said organic sales growth in fiscal 2024 will be in-line with the previous year’s level of 10%, a target that analysts said was above estimates
• Thyssenkrupp gains as much as 7.5%, the most since May 17, after reporting fourth-quarter results that analysts say were better-than-expected, with underlying earnings and cash flow beating expectations. Steel-making peers also edged higher
• Severn Trent shares edge higher, after the British utility posted a revenue beat in the first half. However, gains remain capped as investors focus on the ongoing regulatory review into water companies’ spending plans
• Hugo Boss rises as much as 4%, and is leading performer on the Stoxx 600 Consumer Products and Services index on Wednesday, after BofA and Deutsche Bank upgraded their ratings on the fashion retailer to buy
• Fresenius Medical Care gains as much as 2.9% after the German dialysis provider said the resolution of a legal dispute with the US government will bring a €175 million windfall to fourth-quarter profits
• Johnson Matthey shares jump as much as 5.2% in early trading. The British specialty chemicals firm’s results show its underlying outlook for FY24 improving, says Citi
• Adevinta shares gain as much as 5.6% after a private equity consortium offered to buy the European online classifieds company in a deal valuing the company at ~€14 billion ($15 billion) including debt in one of the year’s biggest buyouts
• Kingfisher shares drop as much as 7.2% after the home-improvement retailer reported third-quarter sales that missed estimates and lowered its full-year adjusted pretax profit guidance below expectations
• Helvetia shares fall as much as 2.3%, most in a month after the Swiss insurer reported a higher-than-expected natural hazard claims burden in the third quarter
• Britvic slips as much as 0.5% after the soft drinks producer’s full-year pre-tax profit missed consensus estimates. While analysts generally viewed the headline number as solid, Goodbody expects below-the-line items to weigh on earnings per share
• Brunel International declines as much as 3.5% after Oddo downgrades the Dutch employment services company to neutral from outperform, writing that earnings visibility continues to be very limited
• Victoria slumps as much as 24%, the most since Sep. 25, after first-half earnings from the beleagured British flooring firm revealed increasingly tough market conditions, which analysts say won’t improve in the near term

Earlier in the session, Asian stocks were mixed, pausing their three-day winning streak, as chip stocks dragged while Chinese tech shares advanced after earnings results. The MSCI Asia Pacific Index was little changed after seeing an early decline of as much as 0.3%. The biggest drags on the gauge were TSMC and Samsung, as semiconductor stocks dropped after Nvidia’s earnings beat estimates but fell short of lofty expectations. Chinese internet stocks such as Alibaba and Tencent advanced after Baidu rose following better-than-expected earnings. 

• Benchmarks in mainland China and Hong Kong were lower, after the short-lived rally following a report on a new support measure for the troubled property.
• Japan’s Nikkei 225 was the outperformer and clawed back initial losses in an early turnaround despite the government cutting its view on the overall economy for the first time since January.
• Australia’s ASX 200 was rangebound as losses in tech and consumer sectors were counterbalanced by resilience in defensives, while Westpac Leading Index also showed a slight contraction.
• Korea’s KOSPI was pressured following the satellite launch by North Korea which plans to launch additional spy satellites.

In FX, the Bloomberg Dollar Spot Index rose as much as 0.3% after touching the lowest level since Aug. 31 on Tuesday.  The yen is the weakest of the G-10 currencies, falling 0.4% versus the greenback. Most major currencies traded in narrow ranges after minutes of the Federal Reserve’s latest meeting showed policymakers were united around a strategy to “proceed carefully” on future interest-rate moves. “With underlying inflation trending down and the labor market tentatively cooling, we judge the risk of another hike to be small,” Joseph Capurso, head of international and sustainable economics at Commonwealth Bank of Australia, wrote about the Fed policy. “With volatility low and the market pricing a ‘soft landing’ in the US, the US dollar can stay heavy this week”

In rates, Treasury futures near highs of the day with curve flatter as long-end yields are down ~4bp. 10-year TSY yields around 4.362% trailing bunds in the sector by ~1.5bp; long-end-led gains flatten 2s10s spread by 1.5bp on the day, 5s30s by ~1bp. The move is paced by bull-flattening in German bonds, where long-end yields are 4.5bp richer vs Tuesday’s close, outperforming on the curve after 15-year bond sale. Dollar IG issuance slate empty so far; corporate bond sales are expected to remain muted ahead of US Thanksgiving holiday.

In commodities, oil tumbled after Bloomberg reported the OPEC+ talks scheduled for this weekend could be delayed. Saudi Arabia is said to have expressed dissatisfaction with other members about their oil production levels. The worry is that Riyadh might reverse its unilateral 1 million barrel-a-day curb if its counterparts don’t contribute further to the supply reductions. WTI falls ~2.2% to trade near $76 and Brent is also down over 2%. Spot gold rises 0.1%.

Looking to the day ahead now, in terms of data releases we have the US October durable goods orders, initial jobless claims and Eurozone November consumer confidence. Earnings releases include Deere, and there is a general election in the Netherlands and the UK Chancellor Hunt delivers the Autumn Statement.

Market Snapshot

• S&P 500 futures little changed at 4,552.25
• MXAP down 0.4% to 161.76
• MXAPJ down 0.4% to 505.41
• Nikkei up 0.3% to 33,451.83
• Topix up 0.4% to 2,378.19
• Hang Seng Index little changed at 17,734.60
• Shanghai Composite down 0.8% to 3,043.61
• Sensex up 0.2% to 66,060.19
• Australia S&P/ASX 200 little changed at 7,073.37
• Kospi little changed at 2,511.70
• STOXX Europe 600 up 0.3% to 457.24
• German 10Y yield little changed at 2.59%
• Euro down 0.1% to $1.0899
• Brent Futures down 0.2% to $82.31/bbl
• Gold spot up 0.2% to $2,001.79
• U.S. Dollar Index up 0.20% to 103.77

Top Overnight News

• OpenAI said Sam Altman will return as chief executive of the artificial-intelligence startup that he co-founded, ending a dramatic five-day standoff between him and the board that fired him. OpenAI said the parties were “collaborating to figure out the details.” The company announced the formation of a new initial board that won’t include three of the four board members involved in removing Altman. WSJ
• Chinese gov’t economic advisers are recommending a 5% growth target for 2024, the same one as for 2023, a goal that would require additional stimulus. RTRS
• Country Garden, Sino-Ocean and CIFI were added to China’s draft list of 50 developers eligible for a range of financing support, people familiar said. Regulators may finalize the roster within days. BBG
• Israel and Hamas agreed to a deal that would halt fighting for at least four days and see 50 hostages released by the terror group while the Israeli gov’t hands over 150 Palestinian prisoners. NYT
• The United States conducted a new round of airstrikes — the second in roughly a day — in Iraq early Wednesday, destroying two facilities used by Iranian proxies that had been targeting American and coalition troops, U.S. military officials said. NYT
• OPEC+ may need to announce deeper production cuts this weekend to offset surprisingly strong supply growth from the US and elsewhere, Pierre Andurand said. The outcome of the meeting will probably be bullish as Saudi Arabia wants to see higher oil prices. BBG
• US authorities thwarted a conspiracy to assassinate a Sikh separatist on American soil and issued a warning to India’s government over concerns it was involved in the plot, according to multiple people familiar with the case. FT
• NVDA posted another monster beat/raise print. Stock bouncing around +1% in the premarket… feels just like the reaction last qtr where a huge beat/raise = muted reaction (stock was +10 bps last qtr, T+1) given how (over) analyzed these Nvidia prints become  (e.g. investors seemingly planned for every possible outcome). Positives .. #1 stand-out = upside on GMs (~75%+ in qtr and guide) … Jan qtr revs guided ~$20bn (up DDs q/q), despite China revs expected to “decline significantly” .. valuation support (just did $4.04 in EPS and guided Jan revs up 10% q/q) .. Total DC revs +41% q/q in F3Q with upbeat customer color (“Large language model startups, consumer internet companies and global cloud service providers were the first movers, and the next waves are starting to build”). GS GBM H/T Peter Callahan
• DE (-7% in preopen trading) reported FQ4 upside, including EPS of 8.26 (vs. the Street 7.48) and revenue of $13.801B (vs. the Street $13.667B). For F24, the mid-point of the net income guidance is ~$8B, a fairly large shortfall compared to the print consensus forecast of ~$9.3B (~$8B represents a sizeable drop from the $10.1B just posted in F23). RTRS
• Although AI continues to be a hot topic on earnings calls, the proportion of companies discussing AI fell from its high in 2Q, signaling a potential inflection in enthusiasm over the technology. Companies investing heavily in becoming leaders within the AI space discussed the spending implications of these investments, noting that they expect capex and R&D to increase. Our economists estimate that AI investment could grow rapidly in the next couple of years, approaching $100 billion in the US by 2025.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded mixed following the weak handover from the US where sentiment was dampened amid soft data and pre-Thanksgiving positioning, while the latest FOMC minutes were uneventful and had little effect on price action. Furthermore, participants digested the latest geopolitical developments including North Korea’s satellite launch and the agreement between Israel and Hamas for a four-day pause of the fighting in Gaza and a hostages-prisoners swap. ASX 200 was rangebound as losses in tech and consumer sectors were counterbalanced by resilience in defensives, while Westpac Leading Index also showed a slight contraction. Nikkei 225 was the outperformer and clawed back initial losses in an early turnaround despite the government cutting its view on the overall economy for the first time since January. KOSPI was pressured following the satellite launch by North Korea which plans to launch additional spy satellites. Hang Seng and Shanghai Comp were cautious with price action rangebound amid a lack of fresh macro drivers from China although the Hong Kong benchmark was cushioned by strength in Baidu post-earnings.

Top Asian News

• Chinese government advisers are to recommend a 4.5%-5.5% growth target for 2024, while they noted that maintaining China’s growth pace next year requires more fiscal stimulus, according to sources via Reuters.
• Japan cut its view on the overall economy for the first time since January and stated that the overall economy is recovering moderately but some areas recently stalled, while it cut its view on capital spending for the first time since December 2021 and stated the pace of pickup in capital spending is pausing.
• Country Garden Holdings (2007 HK) has been placed on the draft list of firms to support by China, via Bloomberg.
• RBA Governor Bullock says the remaining inflation challenge we are dealing with is increasingly homegrown and demand-driven; reiterates more substantial monetary policy tightening is the right response. prices are rising strongly for the majority of the goods and services we all consume. Liaison with firms indicates that domestic cost pressure are proving persistent; also hear that capacity utilisation is very high and economic demand for the year has been stronger than expected

European bourses are in the green, Euro Stoxx 50 +0.4%, in what has been a choppy but ultimately rangebound session ahead of key US data before Thanksgiving commences. Sectors are primarily firmer, with the exception of Banks and Energy as European yields slip and energy benchmarks slump. Stateside, futures are treading water with volumes thin ahead of US IJC which coincides with the Payroll survey period, ES +0.1%. Nvidia (NVDA) – Q3 adj. EPS 4.02 (exp. 3.37), Q3 revenue USD 18.12bln (exp. 16.18bln). The chipmaker settled 1.75% lower after hours after initially falling as much as 6.3%; its Q3 results topped expectations, though it warned China sales would decline in Q4; Bloomberg suggested that the results “failed to satisfy the loftier expectations of shareholders who have bet heavily on an artificial intelligence boom.”. -0.4% in pre-market trade. Deere & Co (DE) Q3 2023 (USD): EPS 8.26 (exp. 7.47), Revenue USD 15.42bln (exp. 13.58bln). Full-year 2024 earnings forecast to be 7.75-8.25bln (exp. 9.33bln), as volumes return to mid-cyclelevels. . -4.4% in pre-market trade

Top European news

• ECB FSR: shadow banks face the risk of receiving large margin calls or client redemptions they cannot meet because they do not have enough cash on hand, liquidity buffers at such intermediaries were “very low”. Many bond funds do not have enough liquid assets to withstand 30 days of severe outflows. “Any sharp increase in sovereign bond yields or a spike in financial market volatility could expose those ICPFs which use interest rate derivatives to large margin calls,”. ECB’s de Guindos says they have not seen any extreme movements in bond spreads.
• German government reportedly wants to postpone Thursday’s budget meeting, according to Focus citing dpa; “Without a shortening of the deadline in the Federal Council, a decision on the 2024 budget would no longer be possible before the end of the year.”
• UK CBI Trends – Orders (Nov) -35.0 (Prev. -26.0)

FX

• Buck stops the rot in time for Thanksgiving as DXY bounces from 103.47 to 103.92 after holding just above 103.00 on Tuesday.
• Yen retreats sharply amidst Dollar revival with USD/JPY probing 149.00 from just over 148.00 via a Fib and alongside decent expiry interest.
• Aussie underpinned by more hawkish RBA rhetoric, as AUD/USD hovers around 0.6550 and AUD/NZD cross rebounds through 1.0850.
• Pound maintains 1.2500+ status vs Greenback, but pensive pre-UK Autumn Statement.
• Euro pivots 1.0900 against backdrop of expiries ranging from the round number to 1.0945
• PBoC set USD/CNY mid-point at 7.1254 vs exp. 7.1468 (prev. 7.1406).

Fixed Income

• Debt futures volatile before firm bounce led by EGBs.
• Bunds breach prior session high between 131.55-130.88 bounds post-strong long dated German auctions and reports that Government wants to delay the 2024 budget meeting.
• Gilts and T-notes tag along within 97.45-96.74 and 109-06/108-27 respective ranges awaiting UK Autumn Statement, US durable goods data and jobless claims for the week including November NFP.

Commodities

• WTI and Brent January futures are softer intraday but within recent ranges in a holiday-shortened week with price action largely moving in tandem with broader sentiment.
• Benchmarks have been oscillating just above the USD 77.00/bbl (USD 76.88-77.97/bbl range) for WTI while its Brent counterpart sits just below USD 82/bbl (vs USD 81.58-82.65/bbl range)
• Spot gold is a touch firmer on the session, as US yields slip slightly and market action remains tentative ahead of afternoon events and conscious of a possible geopolitical breakthrough.
• Base metals are dented by the USD and risk sentiment alongside reporting around China’s growth target for 2024, while support for Chinese real estate has kept iron ore afloat.
• US Energy Inventory Data (bbls): Crude +9.1mln (exp. +1.2mln), Gasoline -1.8mln (exp. -0.2mln), Distillates -3.5mln (exp. -0.8mln), Cushing +0.6mln.
• Russian Deputy PM Novak says the domestic market is fully provided with fuel, and remaining export restrictions on diesel will be lifted soon. Oil market is balanced; oil prices objectively reflect the current situation and they are on quite a good level. Declines to comment when questioned if there will be changes to OPEC+.

Geopolitics

• Israeli PM’s office confirmed the government voted in favour of the proposed deal for the release of some hostages held in Gaza with 50 hostages, women and children to be released over four days during which there will be a pause in fighting.
• Hamas confirmed an agreement with Israel for a four-day pause in Gaza hostilities and agreed to release around 50 women and children hostages from Gaza in exchange for Israel releasing 150 Palestinian women and children from Israeli jails. Hamas added the truce deal will allow hundreds of trucks of humanitarian, medical and fuel aid to enter all parts of Gaza and said Israel committed to not attack or arrest anyone in all parts of Gaza during the truce period.
• US senior administration official said a rigorous inspection regime will ensure Hamas does not use the pause in fighting to get more weaponry, while the US hopes the pause will also be observed by Hezbollah and Israeli forces in northern Israel.
• Senior Hamas figure Musa Abu Marzouq says the truce will begin tomorrow at 10:00 A.M (08:00GMT), according to Walla News’ Elster.
• US Central Command said the US carried out precision strikes against two facilities in Iraq in response to an attack on US troops.
• UN Secretary-General strongly condemned North Korea’s satellite launch and called for North Korea to fully comply with UN resolutions and return to dialogue, while the South Korean National Security Council condemned North Korea’s launch as a violation of UN sanctions

US Event Calendar

• 07:00: Nov. MBA Mortgage Applications 3.0%, prior 2.8%
• 08:30: Nov. Initial Jobless Claims, est. 228,000, prior 231,000
  • Nov. Continuing Claims, est. 1.88m, prior 1.87m
• 08:30: Oct. Durable Goods Orders, est. -3.2%, prior 4.6%
  • Oct. Durables Less Transportation, est. 0.1%, prior 0.4%
  • Oct. Cap Goods Orders Nondef Ex Air, est. 0.1%, prior 0.5%
  • Oct. Cap Goods Ship Nondef Ex Air, est. 0.1%, prior -0.1%
• 10:00: Nov. U. of Mich. Sentiment, est. 61.0, prior 60.4
  • Nov. U. of Mich. Current Conditions, prior 65.7
  • Nov. U. of Mich. Expectations, prior 56.9
  • Nov. U. of Mich. 1 Yr Inflation, est. 4.4%, prior 4.4%
  • Nov. U. of Mich. 5-10 Yr Inflation, est. 3.1%, prior 3.2%

DB’s Jim Reid concludes the overnight wrap

Although the overwhelming bulk of Q3 earnings season is now firmly in the rear view mirror with 95% of the S&P 500 and 92% of Stoxx 600 companies having reported, last night saw one last major hurrah with Nvidia’s Q3 release. The semiconductor producer beat analysts’ estimates on revenue ($18.1bn vs 16.1bn estimated), with stronger-than-expected revenues across data centers, gaming, professional visualization, while just missing in autos. However the stock fell in after-market trading (-1.5%) even as Q4 sales forecast were also above market expectations. Expectations may have simply been highly stretched for a stock that is up over 240% YTD. There hasn’t been much impact on US stock futures with the S&P 500 (-0.03%) and NASDAQ 100 (-0.14%) just a touch lower. Literally as we press send on this, Bloomberg has reported that a deal has been brokered for Sam Altman to return to OpenAI. We’ll see the full story later.

The other major story overnight is that a four day pause in the Israeli/Hamas conflict has been agreed in return for the release of some Israel hostages and the same for some Palestinian prisoners. Markets haven’t really reacted as it has moved on from the conflict in terms of it being a big market mover. The agreement also doesn’t mean that the hostilities are over. It’s an important development nonetheless.

Today will slow down very rapidly as the New York lunchtime approaches as planes, trains and automobiles are sequested for the annual US Thanksgiving getaway. We wish our American readers a sumptuous celebration. Ahead of that we have a squeezed data dump in the US. Initial jobless claims are interesting for two reasons. First this week corresponds to payroll survey week and secondly payrolls have been edging higher over the last month. Indeed the +236k our economists expect would be nearly +10% above the survey week from the previous payroll report. So one to watch. Durable goods will also be interesting with payback expected after a strong couple of months. Also in the US watch for the University of Michigan inflation expectations series within the consumer sentiment final read. The initial print for 5-10 year expectations were at 3.2% the highest since 2011. The final reading is often revised lower but if not this will be unwelcomed news for the Fed.

Talking of the Fed, the last FOMC minutes release last night were very similar to the Fed Chair’s remarks at the press conference. There was a unanimous decision to “proceed carefully” and that further tightening could be needed if inflation were to be persistent. Notably, the minutes showed that “ participants expected that the data arriving in coming months would help clarify the extent to which the disinflation process was continuing .” The FOMC saw aggregate demand moderating “in the face of tighter financial and credit conditions, and labor markets were reaching a better balance ” On QT, some participants noted that the balance sheet runoff could continue even after fed fund policy eased. During a discussion on financial conditions the staff noted that valuations in equities, housing, and CRE were high. While the FOMC did make note of how much financial conditions were tightened by long-end yields rising sharply, they also acknowledged that those might not persist which could affect the path of monetary policy. The market did not have a large reaction to the minutes, having heard most of this from Fed speakers in the last 2 weeks.

In terms of markets it was a quiet day before Nvidia’s release with the S&P 500 slipping -0.20% from its highest level since August. This halted a five-day rally for the index, as the information technology (-0.83%), real estate (-0.47%), and consumer discretionary (-0.38%) sectors underperformed. The tech-heavy NASDAQ fell back -0.59%, likewise breaking a streak of five days of consecutive gains. Ahead of Nvidia’s earnings release, the semiconductor and semiconductor equipment sector underperformed, down -1.44% following a poor Q1 outlook from Analog Devices (-1.40%). Nvidia itself also underperformed, falling -0.92%. The FANG+ index of megacap stocks fell back -0.41 %. The STOXX 600 slipped a more modest -0.09%.

The US Treasury curve steepened a touch, helped by slightly weak data that reinforced the more dovish Fed narrative at the moment. Existing home sales in October were below expectations, at 3.79m (vs 3.90m expected), down -4.1% month-on-month (vs -1.5% expected). The second tier Chicago Fed national activity index for October surprised to the downside at -0.49 (vs 0.00 expected), driven by a decline in production-related indicators. The auto strike could have had an impact. The Philadelphia Fed non-manufacturing activity did improve though, to -11.0 in November, from -20.3 last month .

Against this backdrop, the Fed funds rate priced in for the December 2024 meeting fell -2.6bps 4.41%, with 92.5bps of cuts now priced in for 2024. Futures have also now raised the chance of a March rate cut to 25.6%. 2yr yields fell -3.9bps, while 10yr yields fell -2.7bps, leading to a small +1.2bps steepening in the 2s10s curve to -48.3bps, up slightly from its lowest level since the end of September. Overnight 10yr yields are back up +2.3bps.

In Europe, ECB officials once again cautioned about the expectation of rate cuts. The ECB’s Simkus warned “expectations on ECB rate cuts are too optimistic”, and ECB President Lagarde also stated it was “not the time to start declaring victory on inflation”. But markets were unphased, as they instead added to expectations of ECB rate cuts, with an additional +3.0bps of rate cuts priced in for December 2024. This brings the total of expected cuts through 2024 to 98.5bps. 10yr German bund yields fell -4.5bps to their lowest level since the beginning of September. Yields on OATS also fell -4.5bps despite warnings from EU officials that France was at risk of breaching EU fiscal guidance. Across the channel, the BoE’s Bailey emphasised yesterday the market has put “too much weight on current data” as a “case [remains] for rate pause for extended period”. Despite the pushback, 10yr gilt yields fell -4.7bps on the day. Watch out for the UK Autumn Statement today which is basically a mini budget.

Briefly, over in Canada, core CPI came in below expectations at 3.5% (vs 3.6% expected). This further adds to the recent global dovish narrative. Headline inflation decelerated to 3.1% year-on-year as expected. There is now a near zero probability of an additional hike in this cycle priced into Canadian overnight index swaps.

In Asia this morning there is a little weakness led by mainland Chinese stocks as the CSI (-0.52%) and the Shanghai Composite (-0.29%) are both falling with tech and industrial companies among the laggards. Meanwhile, the Hang Seng (-0.13%) and the KOSPI (-0.32%) are also losing ground while the Nikkei (+0.32%) is bucking the trend so far.

Finally, to the day ahead now, in terms of data releases we have the US October durable goods orders, initial jobless claims and Eurozone November consumer confidence. Earnings releases include Deere, and there is a general election in the Netherlands and the UK Chancellor Hunt delivers the Autumn Statement.

Oil prices are lower this morning as the usual malarkey of leaks, rumors, and denials dominates price action ahead of the planned OPEC+ meeting this weekend.

The selling started with a report by Bloomberg claiming that the Saudis expressed dissatisfaction with other members about their oil production levels.

The worry, Bloomberg claims, is that Riyadh might reverse its unilateral 1 million barrel-a-day curb if its counterparts don’t contribute further to the supply reductions.

That sent prices lower.

Then, at 0801ET this headline hit:

OPEC+ MEETING TO GO AHEAD ON SUNDAY AS PLANNED – RIA

Then at 0806ET, this headline hit:

*OPEC+ MEETING SCHEDULED FOR WEEKEND HAS BEEN DELAYED: DELEGATES

And prices legged lower still…

We remind readers that while Goldman’s base case is that Saudi Arabia and Russia will announce an extension of their extra voluntary cuts through at least 2024Q1 (because Brent is $8 lower than when they announced an extension in September), they see a sizeable 35% subjective probability of an announcement of a deeper group cut.

Policymakers may take out insurance against the possibility that Brent drops below our $80/bbl estimate of the OPEC put in Q1 when demand is seasonably softer.

A deeper group cut appears more likely than a deeper unilateral cut because only the former tends to boost revenues.

OPEC has confirmed that the meeting is delayed until Nov 30th.