Market Morning Briefing for December 5: Dollar rebounds, Yen stabilizes against the US dollar, Meta significantly adjusts expectations, energy commodities diverge in gains and losses

Global Forex Trends Adjust, Yen to USD Key Level Revisited

The US Dollar Index rose 0.2% to 99.0, ending its previous decline and regaining buying support. Meanwhile, the yen to USD remained relatively stable, temporarily holding around 155, as the market awaits the Japanese Central Bank’s monetary policy meeting on the 18th and 19th of this month for a definitive stance. The yield on Japan’s 10-year government bonds rose further to 1.941%, hitting a new high since July 2007, signaling a possible rate hike by the central bank. According to sources, if the Bank of Japan decides to raise interest rates at this meeting, key government officials are unlikely to oppose, significantly increasing the probability of a rate hike.

Fed Expected to Cut Rates Next Week, September PCE Data in Focus

White House National Economic Council Director Brian Deese stated that the Federal Reserve is expected to cut interest rates by about 25 basis points at next week’s FOMC meeting. However, the US initial jobless claims last week fell to 191,000, better than the market expectation of 220,000, and reached a three-year low, constraining further rate cuts. According to CME FedWatch Tool, the market prices in an 89% chance of rate cuts next week, up sharply from mid-November levels. Investors are closely watching the US September core PCE price index released on Friday, as this data will directly influence market expectations for future policy.

US Stock Market Diverges, Tech and Hardware Stocks Lead Gains

US stocks closed mixed, with the Dow Jones Industrial Average down 0.07%, the S&P 500 up 0.11%, and the Nasdaq up 0.22%. The Russell 2000 index, representing small-cap stocks, rose 0.76%. Market focus shifts to AI data centers, energy storage, and power concepts. Meta surged over 3% amid reports of cost-cutting plans, Nvidia gained more than 2%, while Amazon and Apple fell over 1%. Computer hardware companies and crypto miners led the rally, with SanDisk up over 9%, Hut8 up nearly 7%, and Dell Technologies up over 4%. European markets rose across the board, with Germany’s DAX 30 up 0.79% and France’s CAC 40 up 0.43%.

Commodities Market: Oil Rebounds, Gold Slightly Up

WTI crude oil rose over 1% to near $59 per barrel, supported by supply shortage expectations. Gold increased 0.13% to $4,205.6 per ounce. Copper prices on the London Metal Exchange hit a record high of $11,540 per ton, as Swiss commodity trader Mercuria plans to withdraw over 40,000 tons of copper from LME warehouses, indicating concerns over tight supply in the spot market.

Bond Market Under Pressure, US Fiscal Issues Emerge

The US 10-year benchmark Treasury yield is around 4.1%, up 1 basis point from the previous trading day. US federal debt has surpassed $30 trillion for the first time, more than doubling since 2018. As of November, total US Treasury securities, including short, medium, and long-term debt, reached $30.2 trillion. Despite a narrowing fiscal deficit to $1.78 trillion (fiscal year 2025), debt interest payments alone amount to $1.2 trillion, posing a major challenge. Citigroup rate strategist noted that even if tax revenues reach $3,000–$4,000 billion, they remain far below debt interest payments, indicating long-term debt sustainability issues.

Meta Announces Metaverse Strategy Adjustment, Budget May Be Cut by 30% Next Year

Meta CEO Mark Zuckerberg plans to significantly cut investments in the metaverse division. Sources reveal that management has discussed reducing the 2024 budget for the metaverse segment by up to 30%, covering Meta Horizon Worlds and Quest VR businesses. If implemented, layoffs could begin as early as January next year. The move is driven by Meta’s observation that metaverse technology has not met industry expectations for competitive heat. Additionally, Zuckerberg has instructed executives to achieve a 10% overall budget reduction, a routine requirement during annual budgeting cycles.

Cryptocurrency 24-Hour Trends: Bitcoin Declines, Ethereum Rebounds

Bitcoin fell 1.21% in 24 hours, currently trading at $92,670; Ethereum rose 2.13%, now at $3,250. The crypto market continues to be volatile, with investors monitoring macroeconomic data’s impact on risk assets.

Other Key Market Information

Hong Kong Hang Seng Index futures closed at 25,900 points, down 36 points from yesterday’s close. The US government plans to increase holdings in key mineral companies, with strategic minerals like gallium and cobalt widely used in electronics, defense, and energy sectors. Ulta Beauty’s Q3 sales increased 13%, with net profit exceeding expectations, leading to an upward revision of the full-year outlook.