The American stock markets traded slightly lower yesterday while the US dollar continued to strengthen. The day’s trading was possibly driven by exhaustion, according to Siebert’s chief investment officer. Both the Swedish krona and the euro weakened against the dollar, with the dollar reaching its strongest level against the euro in almost a year. Overall, the US indexes have surged to new record levels since the newly elected President Donald Trump took office, following his fiscal promises that include easing requirements and regulations for banks and institutional investors, as well as tariffs. Investors are now looking towards today’s consumer price index and the Treasury’s budget report to gauge the strength of the economy. The broad S&P 500 traded down 0.3 percent, the tech-heavy Nasdaq down 0.1 percent, and the industrial Dow Jones index down 0.9 percent.
Commodities trended lower on Tuesday, with oil bucking the trend. Oil saw minor gains yesterday but remained near a two-week low. This is due to China’s new stimulus package falling short of market expectations, leading investors to believe that demand for the commodity in the country will not rise as anticipated. Furthermore, the rising price of the dollar tends to pressure oil as it becomes more expensive for parties trading with other currencies. On Monday, the Organization of the Petroleum Exporting Countries (OPEC) reduced its forecast for demand growth in 2024 for the fourth consecutive time while postponing its plans to increase production in December. Both WTI and Brent crude oil rose by 0.3 dollars to 68.3 and 72.1 dollars per barrel, respectively.
Base metals declined across the board, with tin being the biggest loser, falling by 3.2 percent, followed by copper and zinc, which decreased by 1.7 and 1.1 percent, respectively. Nickel dropped by 0.5 percent, while aluminum traded down 0.3 percent and lead remained flat. Gold continued to decline yesterday due to the rising dollar and optimism surrounding increased market growth following Trump’s victory last week. Further interest rate cuts are expected in the future, which could further boost the price of gold. Gold fell by 18.8 dollars to 2,600.1 dollars per ounce.
Among individual US stocks, Shopify reported a doubled profit, causing the stock to surge by 20.9 percent, while Tesla retraced by 6.1 percent after a recent sharp increase. Chip giant Nvidia rose by 2.1 percent, while MicroStrategy climbed 4.9 percent and AMD declined by 2.5 percent.
The US ten-year treasury bond rose by two basis points to 4.43 percent.
Asian markets traded lower in the morning and continued to be pressured by Trump’s tariff threats, a stronger dollar, and China’s latest stimulus package failing to impress investors. In Japan, new producer price statistics show an increase of 3.4 percent in October compared to the same month last year, the highest since July. This suggests that inflation in the country is not decreasing as desired and could lead to the Bank of Japan raising rates earlier than expected. At 07:30, the Chinese Shanghai index was up 0.4 percent, while the Hang Seng declined by 0.6 percent. The Japanese Nikkei 225 index fell by 1.7 percent.
On the Stockholm Stock Exchange, Yubico reported a 45 percent increase in revenue, totaling 590 million kronor, with an EBIT result of 111 million kronor. Later in the day, companies such as Elon, Tellusgruppen, and Better Collective will report their earnings.
In today’s new recommendations, Morgan Stanley conducted a review of major banks in the Nordic region, with Danske Bank receiving a target price of 270 kronor and an overweight recommendation. Swedbank, Handelsbanken, and DNB have had their target prices raised to 239, 122, and 237 kronor, respectively, while maintaining an underweight recommendation. SEB, on the other hand, received a reduced target price of 168 kronor, with a neutral recommendation. AstraZeneca received an upgraded target price from Nordea, from sell to buy, and an increased target price of 1,565 kronor, while Barclays lowered its target price for Embracer to 27 kronor and reiterated a neutral rating.
On the macro front, Wednesday will be a quiet day starting with the European Central Bank holding its non-monetary policy meeting at 09:00, followed by the Riksbank’s minutes from its latest monetary policy meeting at 09:30. In the US, the Bureau of Labor Statistics will report CPI figures at 14:30, followed by the Energy Information Administration releasing its short-term energy outlook at 18:00. The day will end with the Department of Treasury’s budget report for October at 20:00 and the American Petroleum Institute’s weekly crude oil inventory at 22:30.