Markets Brace for US Inflation Data, Bitcoin ETF Records, and Global Stock Highlights

Ahead of todays significant US inflation data, and an expected rate drop by the Bank of Canada, investor nervousness caused Asian stock markets and the dollar to temporarily stop in today’s trading session.

Asian markets were muted, with the Asia-Pacific index down 0.4% and Japan's Nikkei flat, while Wall Street's S&P 500 is down 0.3%, making the 85% chance of a Fed interest rate decrease next week appear as if it was already priced in. A 50 basis point rate cut was anticipated as a result of growing unemployment, while the CAD was trading close to a 4.5-year low.

European futures saw a little decline, while US futures were divided. Although global markets remained cautious due to contradictory economic signals and recent peaks in numerous indices, oil prices rose on Chinese stimulus prospects.

Bitcoin’s Record-Breaking Year: BlackRock ETF and Regulatory Challenges

The BlackRock iShares Bitcoin Trust (IBIT) has been breaking multiple records since its launch in January 2024. The ETF reached $50 billion in assets under management (AUM) in just 228 days, an achievement five times faster than any other ETF in history. Its success highlights the growing institutional adoption of Bitcoin.

Notable Milestones:

• Fastest to $40 billion: Achieved in 211 days.
• Largest ETF in its class: Outperformed all ETFs launched in the past decade.
• Record single-day inflows: $1.12 billion in a single day.
• Record trading volume: $4.5 billion on November 11, 2024.
• Surpassed Gold: IBIT’s total assets surpassed the iShares Gold Trust (IAU), which manages $33 billion.
• Bitcoin Holdings: The ETF now holds 506,000 Bitcoin, representing 2.5% of all Bitcoin ever mined.

Regulatory Headwinds in France

French Senator Sylvie Vermeillet has proposed classifying Bitcoin as “unproductive,” potentially introducing a tax on unrealized gains:

• Details:
• Gains exceeding €800,000 ($845,000) would be taxed, even if the Bitcoin is not sold.
• Current tax rate on Bitcoin gains in France stands at 30%, but it’s unclear if this rate would apply under the new proposal.
• Implications:
• Early Bitcoin investors could face significant tax burdens.
• The move reflects growing regulatory scrutiny, which may influence Bitcoin adoption in France.

Stock Hot Performers

DocuSign (NASDAQ: DOCU):

• The e-signing software company surged 27.9% on Friday after exceeding Q3 EPS and revenue expectations.
• Full-year guidance raised, boosting investor confidence.
• YTD performance: +81.7%, driven by strong demand and solid execution.

Rivian (NASDAQ: RIVN):

• Hit a three-month high after an analyst flagged a bright future for the EV maker.
• Rivian continues to gain momentum as it builds a foothold in the competitive EV market.

C3.ai:

• Shares soared 14.8% after the company raised its FY2025 revenue forecast, signaling strong demand for its AI solutions.

MongoDB:

• Posted Q3 revenue growth of 22% YoY, with its Atlas revenue jumping 26%.
• The company’s performance reflects robust demand for its database solutions in a data-driven world.

Stock Underperformers:

Qualcomm (NASDAQ: QCOM):

• Fell 0.6% on Friday as fears linger about the impact of losing Apple’s business.
• Despite a YTD gain of 12.2%, Qualcomm has lost 67.6% since June, struggling to reassure investors of its competitiveness.

Oracle:

• Missed Q2 expectations, sending shares tumbling 7%.
• Despite strong market presence, the miss raises concerns about short-term growth.

Nvidia:

• Shares Down 2.5%:
• Nvidia faces an anti-monopoly probe by China’s regulators related to its 2019 Mellanox acquisition for $6.9 billion.
• This follows escalating U.S.-China trade tensions, particularly in the semiconductor sector.
• Dominance in AI Chips:
• Nvidia controls 70-95% of the market for chips used to train and deploy AI models, making it a frequent target for antitrust scrutiny.
• Investigations are also ongoing in the U.S. Department of Justice and the European Union.

Other Developments:

• Google (GOOG):
• Unveiled a quantum computing chip, which it described as "mind-boggling," highlighting advances in computing power.
• Boeing (BA):
• Restarted production of the 737 MAX a month after a labor strike ended, signaling progress toward recovery.
• Xiaomi:
• Launched the YU7 electric SUV, aiming to rival Tesla’s Model Y in China, showcasing its ambitions in the EV sector.
• Mondelez & Hershey:
• Mondelez’s interest in acquiring Hershey pushed Hershey’s shares up 19%, sparking speculation about consolidation in the confectionery industry.

On the agenda today

13:30     USD                  Core CPI (YoY) (Nov)

13:30     USD                  Core CPI (MoM) (Nov)

13:30     USD                  CPI (MoM) (Nov)

13:30     USD                  CPI (YoY) (Nov)

15:30     USD                  Crude Oil Inventories

18:00     USD                  10-Year Note Auction

DAX outlook

The DAX (Germany 40) continues to display a powerful bullish trend with several key technical developments worth noting.

The index is currently trading at 20,332.4, showing remarkable strength after breaking out from a prolonged consolidation phase. A significant bullish impulse began in late November, pushing the index to establish new all-time highs around 20,474.0.

Moving Average Structure

• EMA 20: 20,305.5
• EMA 50: 20,107.5
• EMA 100: 19,842.3
• EMA 200: 19,587.6

The moving averages are perfectly aligned in a bullish stack, with each shorter-term EMA above the longer ones, confirming a robust uptrend. The price is maintaining comfortable distance above all EMAs, indicating strong bullish momentum.

RSI Analysis

The RSI (14) reading of 58.06 shows moderate momentum, having cooled off from overbought conditions, suggesting potential for continued upside movement without immediate reversal risks.

Stochastic RSI

Currently in the lower range (6.55), indicating oversold conditions on the shorter timeframe and potential for an uptick in bullish volume.

Support and Resistance Levels

• Major Resistance: 20,474.0 (recent high)
• Immediate Support: 20,193.5 (EMA 20)
• Secondary Support: 20,107.5 (EMA 50)
• Strong Support: 19,842.3 (EMA 100)

Volume Profile

Recent price action shows consistent volume during the uptrend, validating the strength of the move. The consolidation near all-time highs is occurring on decreasing volume, suggesting a potential continuation pattern.

Trading Outlook

The overall trend remains strongly bullish with healthy consolidation near the highs. The current setup suggests potential for further upside, with strong support structure from the moving averages below. Traders should watch for bounces from the EMA 20 as critical short term support zones, with the EMA 50 acting as medium term support.