Housekeeping: Good Morning.
“The Gold reset is a process, not an event”
Today:
Discussion:
CTAs could be unwinding Gold long, still buying USD
In commodities, our model stopped out of its stretched long Gold position after futures declined by 2.7% following the election. Price trend remains elevated, and some CTAs may not have fully sold out of their longs.
Full analysis at bottom
Commodity Surveyor: Precious To Me
While directionally many of the undercurrents continued m/m in October, the positives (precious metals were up nearly $18bln) far outweighed the negatives (all other assets on a net basis amounted to -$10.9bln), pushing total commodity investor AUM tracked in this piece to nearly $590bln. Unsurprisingly, the positive tailwind is really about gold given its run of records — and even with the post-election reset, our conviction remains for 2025.
Related: RBC’s Election Quick take
Full analysis at bottom
News/Analysis:
Equity Recap:
US equities continued to rally to record highs on Friday after Donald Trump's presidential election win. Large caps lagged small caps: S&P 500 (+0.38%) vs. Russell 2000 (+0.71%). MSCI Emerging Markets (EEM) and MSCI EAFE (EFA) dropped 2.47% and 1.38% respectively.
Market News:
"Tech groups are rushing to redesign how they test and evaluate their artificial intelligence models, as the fast advancing technology surpasses current benchmarks. FT
"[Virtual] currencies extended their rally on Sunday, with bit coin touching $80,000 for the first time ever... CNBC
"Apple may never find another product with as much revenue potential as the iPhone, but it can still thrive with several new Apple Watch- or iPad-level businesses. Source: Bloomberg
"The U.S. has reportedly ordered TSMC to halt shipments of advanced chips to Chinese customers that are often used in artificial intelligence applications. CNBC
"Most companies are starting to figure out how artificial intelligence will change the way they do business. Chegg is trying to avoid becoming its first major victim. The online education company was for many years the go-to source for students who wanted help with their homework, or a potential tool for plagiarism. WSJ
Politics/Geopolitics:
IAEA Director General Grossi will travel to Tehran this week for high-level meetings with the Iranian government.
Iran announced the death of 5 security forces in an armed attack on the Pakistani border, according to Al Arabiya.
US President-elect Trump spoke on the phone with Russian President Putin on Thursday and discussed the war in Ukraine, while Trump urged Putin not to escalate the war in Ukraine, according to The Washington Post.
Russian Foreign Ministry said on Saturday that there are no grounds for talking about resuming dialogue with the US on strategic stability and arms, while it added that US President-elect Trump’s promises to resolve the crisis in Ukraine fast are nothing more than rhetoric.
Russia and Ukraine launched their biggest drone attacks on each other since the start of the conflict, with several people injured in the tensions, according to LBC.
Russian President Putin signed the law on ratification of the strategic partnership with North Korea, according to TASS.
Ukrainian top military commander Syrski told a senior US general of reports regarding North Korean troops preparing to take part in combat alongside Russian forces, as well as noted that the front-line situation remains difficult and is showing signs of escalation.
Ukrainian drones hit a chemical producer in Russia’s Tula region overnight.
Chinese President Xi signed an order of regulations to guarantee military equipment, effective from December 1st.
China’s Foreign Ministry said China firmly opposes the Philippines’ Marine Zones Act which severely infringes on China’s territorial sovereignty and maritime rights in the South China Sea, while China’s Coast Guard said the Philippines has frequently sent military police, civilian vessels and aircraft to intrude into the air and sea space near Huangyan Island, which is also known as Scarborough Shoal.
Philippines aims to buy a US missile launcher in a move likely to anger China, according to FT.
Data on Deck: CPI/PPI
MONDAY, NOV. 11 Veteran's Day holiday, bond market closed
TUESDAY, NOV. 12 NFIB optimism
WEDNESDAY, NOV. 13 Consumer price index
THURSDAY, NOV. 14 PPI year over year
FRIDAY, NOV. 15 Retail sales minus autos
***FINAL MARKET CHECK***
Premium:
BOA on CTAs, RBC on Gold Post Election
