MAKER'S MARKET DOSSIER
Issue #1: 12.2.2024
❤️🫦 Amuse Bouche …
December 2024 opens like a suspense thriller, with markets caught in a plot full of red herrings and shadowy threats. In 🇨🇳 Asia, China’s PMI smashed expectations, briefly lifting hopes for industrial demand. But that optimism dimmed quickly, as 🇺🇸 Washington’s tightening noose of tech restrictions on China cast a long shadow over the semiconductor sector, 🧐 leaving investors gripping their keyboards like lifelines.
🇪🇺 Europe brought its own brand of chaos, headlined by France’s ongoing political melodrama. 🇫🇷 Marine Le Pen’s National Rally is lobbing no-confidence threats at PM Michel Barnier, sparking selloffs in French bonds and dragging the CAC 40 deep into the red. 🇩🇪 German traders shrugged at first, but even the stoic DAX can’t forever ignore the growing cracks in the Eurozone’s political foundation.
Meanwhile, 🇺🇸 America delivered its own geopolitical fireworks. 🍊 President-elect Donald Trump reignited tariff talk, aiming his rhetoric squarely at BRICS nations over their growing currency collaboration. 💵 The dollar roared higher, smashing G10 peers and torching emerging market currencies. 🥇 Gold took a dive, losing its haven allure under the weight of the dollar’s surge.
👨🌾 Commodities added their own layer of drama. 🛢️ Crude oil prices managed a fragile balance, buoyed by Chinese demand and geopolitical tension but constrained by OPEC+ uncertainty ahead of its December 5th meeting. 🌞 Agricultural markets lit up the scoreboard too, with ☕️ coffee prices spiking to multi-decade highs thanks to droughts in 🇧🇷 Brazil—a reminder that weather remains a market mover with no regard for year-end profit goals.
As the day continued, traders enjoyed little breathing room. 🇺🇸 US ISM Manufacturing PMI and a parade of Fed speeches will dominate the afternoon, promising further turbulence. December might be the final chapter of 2024, but the market hasn’t decided whether it’s ending in triumph or tragedy. One thing’s certain: investors aren’t unwrapping gifts—they’re unraveling chaos.
MARKET MOOD
📉 Risk-off sentiment set the tone as traders grappled with a global cocktail of uncertainty. In 🇪🇺 Europe, political fragility took center stage. 🇫🇷 France’s PM Michel Barnier faced mounting no-confidence threats from Marine Le Pen’s National Rally, dragging the CAC 40 deep into the red before broader European indices found their footing later in the session.
In 🇨🇳 Asia, glimmers of optimism emerged as stronger-than-expected Chinese PMI data boosted equities, particularly in industrials and tech. But the shine was dulled by lingering concerns over global demand and the ever-looming threat of US trade restrictions.
🇺🇸 Across the Atlantic, US markets hesitated. 🍊 President-elect Donald Trump’s tariff-laden rhetoric against BRICS nations stirred fresh waves of volatility. A resurgent USD continued to assert dominance, amplifying headwinds for emerging markets and commodities.
🧐 Investors hold out hope for a late-year rally, spurred by seasonal equity gains. However, caution remains the dominant theme, as the convergence of geopolitical risks, inflationary fears, and high-stakes economic data threatens to derail any remaining holiday cheer.
TRADE WINDS
Global markets spent the day in the kind of chaos only a dysfunctional family reunion could rival. From 🇨🇳 China’s tech crackdown woes to 🇫🇷 France’s budget drama and 🇺🇸 America’s tariff tirades, every session brought its own flavor of market mayhem. It’s like the markets decided to reenact Game of Thrones, with geopolitical plotlines fighting for screen time while investors nervously clutched their portfolios like a last glass of holiday champagne.
Each session added fresh ingredients to the stew of uncertainty simmering over global markets. 🧐 Investors are staring down a gauntlet of risks—tech wars, fiscal fights, and tariff threats—while upcoming economic data looms ominously. Sure, there’s still talk of a seasonal rally, but the optimism feels like a party hat at a funeral: misplaced, awkward, and a little bit sad.
APAC Session: Semiconductors, Sandbags, and Sabotage
🇨🇳 US Tech Restrictions: The Return of the Commerce Department
🌅 Before dawn, the US Commerce Department rolled out another round of restrictions, taking aim at Chinese chipmakers and tool manufacturers. It’s like the gift that keeps on giving—if the gift is a slow but deliberate dismantling of tech supply chains. Washington is effectively telling Beijing: “No chips for you!” in a scene straight out of the Semiconductor Soup Nazi.
🇮🇱 Middle East Tensions: Another Day, Another Crisis
Over in the Middle East, tensions bubbled up as reports of Hezbollah activity near the Litani River coincided with Israeli airstrikes. Prime Minister Netanyahu tried to play the “progress in Gaza talks” card, 🍉 but the military risks up north weren’t having it.
European Session: France Finds New Ways to Lose Its Nerve
🇫🇷 France’s Budget Drama: Who Wants a No-Confidence Vote?
In Europe, France picked up where APAC left off, contributing its own subplot to the day’s geopolitical anthology. Marine Le Pen’s National Rally is calling for a no-confidence vote against PM Barnier over his 2025 budget proposal. Picture Le Pen with a dramatic flourish, yelling: “Off with his fiscal head!” The whole spectacle is a masterclass in brinkmanship, with fiscal reforms at the heart of the drama.
US Session: Trump Tariffs and Currency Wars, the Sequel
🇺🇸 Trump vs. BRICS: The Tariff Strikes Back
By the time US markets opened, the day’s geopolitical bickering had migrated west. 🍊 President-elect Donald Trump dropped a bombshell, threatening 100% tariffs on BRICS nations for daring to dream of a currency to rival the USD. South Africa quickly stepped in to douse the flames, assuring markets that no such plan was imminent, but the damage was done.
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SECTOR SPOTLIGHT
Markets shuffled their decks today, and some sectors came up aces while others folded like a cheap poker table. Energy flexed its geopolitical muscles, tech weathered the trade storm, and defensive sectors played the quiet hero, holding the fort in the chaos.
The day’s trading mirrored the world at large: messy, complicated, and full of surprises. Energy remains a geopolitical wild card, tech is marching forward with a target on its back, and defensives are bracing for whatever comes next. 🧐 For investors, it’s not about choosing the best story—it’s about surviving all of them at once.
Energy: Oil Prices Ride Geopolitical Waves and Chinese Tailwinds
Energy markets held their ground today, with crude oil prices hugging session highs like they were trying to keep warm. Geopolitical tensions in the 🇮🇱 Middle East added a risk premium, as escalations between Hezbollah and Israel continued to spook supply chains. Meanwhile, stronger-than-expected 🇨🇳 Chinese PMI numbers boosted demand optimism, suggesting that Beijing’s factories might finally be done napping.
𐂕 Natural gas wasn’t invited to the party, though. Prices nosedived as mild weather forecasts sucked the life out of heating demand, leaving traders wondering if winter might skip the Northern Hemisphere altogether this year.
Energy markets are teetering on a knife’s edge. Geopolitical risks and Chinese demand should keep crude prices steady for now, but a strong USD and cautious positioning ahead of OPEC+ could keep bulls from charging too hard. Medium term, inventory dynamics and seasonal trends will decide if oil gets to be naughty or nice.
Technology: Semiconductors Shine, Despite Crossfire
The tech sector dodged bullets today—well, figuratively, unless you count the US-China chip spat as literal economic warfare. 🇺🇸 US semiconductors showed surprising resilience as NVIDIA, AMD, and Intel capitalized on increased domestic demand and government incentives. The Commerce Department’s latest restrictions on 🇨🇳 China’s chipmakers sent a subtle (or not-so-subtle) message: America’s chip dominance is here to stay—if Washington has anything to say about it.
The semiconductor rally has legs, thanks to robust AI demand and government incentives for US-based manufacturing. But the sector isn’t without its villains: supply chain hiccups, trade tensions, and geopolitical risks are waiting in the wings.
Key Movers: NVIDIA and AMD saw gains, buoyed by AI-driven growth and domestic production optimism.
Defensive Sectors: The Calm in Europe’s Storm
When the going gets tough, the tough buy utilities and healthcare. In 🇪🇺 Europe, defensive sectors emerged as the day’s unsung heroes, providing stability as recession fears made their rounds. Utilities quietly gained traction, while healthcare remained a solid choice for investors seeking refuge from the broader market drama.
Defensive plays remain attractive as the macro environment deteriorates, but don’t rule out a sector rotation into cyclicals if inflation sparks a late-game rebound in growth-sensitive industries.
Key Movers: European utilities and healthcare ticked higher, thanks to their reputation as recession-proof stalwarts.
RISK RADAR
As the year barrels toward its chaotic conclusion, the markets are playing dodgeball with risks from every corner of the globe. From geopolitical powder kegs to the steady drumbeat of inflationary woes, here’s a rundown of today’s biggest hazards—and their fallout.
Geopolitics, protectionism, and inflationary uncertainty have set the stage for a jittery December. The risk landscape feels like a house of cards stacked on a fault line: unstable, unnerving, and unnaturally suspenseful. For now, safe-haven assets like USD and Gold are the go-to lifeboats in this stormy sea, while crude oil and equities remain at the mercy of the next headline.
1. Geopolitical Risks: Middle East Firestorms and French Misfires
The Middle East remains a geopolitical pressure cooker, with 🇮🇱 Israel and Hezbollah edging closer to open confrontation. South of the Litani River, tensions are sparking concerns of broader conflict, while PM Netanyahu juggles negotiations in 🍉 Gaza and a 🦅 hawkish stance on Israel’s northern border.
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Meanwhile, 🇫🇷 France has added its own chapter to the risk saga. Marine Le Pen’s no-confidence threat against PM Barnier has thrown Paris into political turmoil, raising the specter of fiscal instability in the Eurozone’s second-largest economy.
2. Trade and Tariff Tensions: The BRICS Currency Boogeyman
🇺🇸 President-elect Trump is back on his tariff warpath, threatening 100% duties on BRICS nations over their rumored currency collaboration. While 🇿🇦 South Africa insists no such plan is active, the rhetoric alone has rattled emerging markets, amplifying fears of global trade disruptions.
3. Energy Market Volatility: OPEC+ Keeps Traders Guessing
🛢️ The delayed December 5th OPEC+ meeting is shaping up to be a nail-biter. Markets are jittery, torn between softer global demand signals and the ever-present specter of supply disruptions stemming from geopolitical chaos. 𐂕 Natural gas remains the outlier, sliding on unseasonably warm weather and weak heating demand.
4. Inflationary Pressures: The Ghosts of CPI Past
🇺🇸 Inflation might not be roaring anymore, but it’s not exactly purring, either. The alignment of rising core PCE, CPI, and PPI in the US hints that disinflation could be stalling. 🏦 Central banks are stuck playing Whack-a-Mole with rate adjustments, balancing growth and inflation in a game where the mallet is too small and the stakes too high.
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WATCHLISTS
Commodities
Commodity markets remain sensitive to geopolitical developments, currency fluctuations, and weather-related supply concerns. 🧐 Investors should monitor these factors closely, as they significantly impact price movements across various commodities.
Metals
Energy
Agricultural Commodities
Indices
APAC Session
European Session
US Session
U.S. Stocks
Tech stocks, particularly Tesla and NVIDIA, were the clear outperformers, supported by secular growth trends and AI-related optimism. Financials struggled, with Bank of America leading the decline, as higher funding costs weighed on sentiment. Meanwhile, consumer-facing names like Amazon gained traction ahead of holiday sales, highlighting the market’s mixed but resilient tone.
Bond Markets
Bond markets exhibited mixed performance as geopolitical tensions, inflationary concerns, and central bank policy uncertainty continued to influence investor sentiment. French OAT yields spiked amid political instability, while US Treasuries faced mild selling pressure ahead of critical economic data releases.
Bond markets remain acutely sensitive to geopolitical risks and central bank narratives. With French political instability in focus and critical US economic data on the horizon, yields may experience heightened volatility in the near term. Watch for further yield curve movements as markets digest inflation updates and OPEC+ decisions later this week.
Americas
Europe
APAC
Cryptocurrencies
₿ The cryptocurrency market exhibited its trademark volatility today, with Bitcoin (BTC) declining 1.9% to $95,732, moving within a range of $94,545 to $98,156. Institutional enthusiasm remains intact, highlighted by MicroStrategy’s $1.5 billion acquisition of 15,400 BTC. However, broader market momentum has faltered as Bitcoin lingers 4% below the crucial $100K psychological level. 🧐 Efforts to attract conservative investors through new cash-settled Bitcoin options have yet to spark renewed enthusiasm, leaving traders searching for the next catalyst.
🅇 Ripple’s XRP continued its meteoric rise, surging above $2.75 to a six-year high and reclaiming its position as the third-largest cryptocurrency with a $137 billion market cap. Optimism surrounds a potential resolution to the SEC’s lawsuit against Ripple, which has long clouded XRP’s legitimacy. 🧐 Investors are also eyeing a friendlier regulatory backdrop under President-elect Trump, while the launch of a physically backed XRP exchange-traded product (ETP) in Europe underscores institutional interest in the asset.
🄷 Hedera’s HBAR also reached new milestones, surpassing $0.30 on the strength of its rapidly growing decentralized ecosystem. Unlike blockchain-based networks, Hedera operates on a Hashgraph, a distributed ledger using a unique consensus mechanism for high throughput and low latency. With $154 million in Total Value Locked and endorsements like the Nairobi Securities Exchange joining its Governing Council, Hedera continues to solidify its role as a leader in enterprise-grade DLT solutions.
PAY OFF
🧐 The trading landscape of December 2, 2024, highlights the intricate dance between geopolitics, macroeconomic shifts, and investor sentiment. Markets are navigating a precarious balance, with optimism stemming from improving 🇨🇳 Chinese data countered by the weight of geopolitical tensions and fiscal uncertainty in key regions. The unfolding themes underscore the need for traders to remain agile, alert, and opportunistic in the face of persistent volatility.
The day’s spotlight rests firmly on the interplay of strength in the US dollar, energy market stability, and geopolitical risks.
🇺🇸 President-elect Trump’s tariff threats against BRICS nations and the widening OAT-Bund spread amid France’s political instability have added layers of complexity to an already uncertain environment. 💵 The dollar’s broad-based rally continues to pressure commodities, emerging market currencies, and industrial metals, even as robust 🇨🇳 Chinese PMI data briefly lifted sentiment. For now, the markets are clearly rewarding safe-haven flows and punishing speculative risk.
🛢️ Investors are keenly awaiting the December 5th OPEC+ meeting, a pivotal event for the energy market. With crude prices finding support from geopolitical tensions and demand-side recovery signals, traders are closely assessing whether the producer group’s decision will drive prices higher or stall momentum. Meanwhile, natural gas remains mired in bearish sentiment, weighed down by unseasonably mild weather forecasts.
The sharp divergence in commodity performance is another theme to watch. Precious metals like 🥇 Gold and 🥈 Silver have struggled under the weight of a strong USD, but surging agricultural prices, particularly in ☕️ coffee and cocoa, remind traders that weather shocks and regional supply constraints can rapidly reshape narratives.
🎅🏼 As the calendar approaches year-end, traditional seasonal trends like the “Santa Claus rally” loom large. However, 2024’s backdrop of geopolitical volatility, disjointed monetary policy paths, and trade disruptions may upend these patterns. Will French political risks spill over into broader Eurozone uncertainty? Could BRICS respond to US tariff threats with retaliatory measures that disrupt global trade flows? Will OPEC+ surprise the market with aggressive cuts?
🤷 In these uncertain times, opportunity lies in sharp analysis and nimble execution. Traders should heed the risks but remain open to the moments of clarity and conviction that volatile markets so often provide. And as always, December’s script is not yet written, offering its own set of twists, turns, and perhaps a final rally to cap the year.
© adrian dyer 2024