FX.co ★ Futures Pointing To Modestly Higher Open On Wall Street

The major U.S. index futures suggest a slightly positive start on Friday, hinting at a rebound for stocks following the decline observed on Wednesday. Investors may seize this opportunity to acquire stocks at more attractive prices after the recent dip that drove the Dow Jones and S&P 500 down from Tuesday's record closing highs.

Trading activity is expected to be relatively subdued, largely due to many traders still absent following the Thanksgiving holiday. Furthermore, the absence of significant U.S. economic data may lead to cautious trading as investors anticipate key economic reports set for release next week. Attention is expected to focus particularly on the Labor Department's monthly employment report, alongside updates on manufacturing and service sector performance.

The past sessions saw stocks trending upward; however, a retreat occurred on Wednesday, led by a decline in the Nasdaq. The Nasdaq rebounded from its lowest point yet closed lower, down 115.10 points, or 0.6%, to 19,060.48. Similarly, the Dow lost 138.25 points, or 0.3%, closing at 44,722.06, while the S&P 500 dropped 22.8 points, or 0.4%, to 5,998.74, ending a seven-session winning streak.

The tech-heavy Nasdaq's decline was primarily driven by significant weakness in the computer hardware sector, with the NYSE Arca Computer Hardware Index dropping 3.3%. Notably, Dell Technologies (DELL) and HP Inc. (HPQ) experienced sharp declines of 12.3% and 11.4%, respectively, following underwhelming earnings forecasts. The software sector also saw notable declines, with the Dow Jones U.S. Software Index losing 1.6%.

Additionally, semiconductor and networking stocks showed weakness, further impacting the Nasdaq, while biotechnology stocks demonstrated robust upward movement. The overall market weakness followed the Commerce Department's release of consumer price inflation data, which aligned with market expectations. The personal consumption expenditures (PCE) price index rose by 0.2% in October, consistent with September’s increase and economist forecasts.

The PCE price index's annual growth rate accelerated to 2.3% in October from 2.1% in September, meeting expectations. Excluding volatile food and energy costs, the core PCE price index increased by 0.3% in October, maintaining the previous month's pace and aligning with projections. The annual growth rate of the core PCE index edged up to 2.8% in October from 2.7% in September, in line with predictions.

Although the rise in year-over-year price growth met expectations, it may intensify concerns about future interest rates. "Despite the CME Fedwatch tool indicating market anticipation for another Federal Reserve rate cut next month, there's growing unease that the pace of cuts might decelerate. This stems from persistent price pressure in core areas and apprehensions regarding the potential impact of Trump's tariffs on U.S. consumers," noted AJ Bell's head of financial analysis, Danni Hewson.

These inflation figures, which the Federal Reserve favors, have largely eclipsed other U.S. economic data.

**Commodity and Currency Markets**

Crude oil futures are climbing $0.52 to $69.24 a barrel after a slight dip of $0.05 to $68.72 a barrel on Wednesday. Meanwhile, gold futures, which increased by $18.50 to $2,664.80 an ounce in the previous session, are advancing an additional $18.30 to $2,683.10 an ounce.

On the currency front, the U.S. dollar is trading at 150.00 yen compared to the 151.55 yen on Thursday. Against the euro, it is valued at $1.0556, up from the previous day's $1.0552.

**Asia**

Asian stock markets ended mixed on Friday. A stronger yen, buoyed by expectations of a Bank of Japan rate hike, impacted Japanese markets, whereas Chinese stocks posted strong gains spurred by anticipation of upcoming economic stimulus ahead of a key meeting next month.

The Japanese yen briefly crossed the 150 mark against the dollar, following core inflation in Tokyo exceeding the 2% target, heightening rate hike expectations. Conversely, Japan's industrial output and retail sales fell short of growth forecasts for November.

The dollar's decline alongside bond yields contributed to nearly a 1% rise in gold price during Asian trading. Meanwhile, Brazil's real hit a historic low amidst fiscal uncertainty. Oil prices saw a decline after OPEC+ pushed back its eagerly awaited meeting on production strategies.China’s Shanghai Composite Index saw a significant increase of 0.9 percent, reaching 3,326.46, fueled by speculation that Beijing might introduce further measures to bolster the economy during a critical policy meeting scheduled for December. In a noteworthy development, the Chinese government announced an extension of tariff exemptions on certain U.S. imports up to February 28, 2025. This move suggests a potential reduction in trade tensions with the United States.

Hong Kong’s Hang Seng Index recorded a rise of 0.2 percent, closing at 19,423.61 after a volatile trading session. Conversely, Japanese markets faced a downturn as the yen appreciated amidst speculation that the Bank of Japan (BOJ) might increase interest rates following unexpectedly high inflation figures.

Despite these downward trends, Japanese markets managed to recover slightly from their intraday lows due to reports suggesting a potential delay in Japan’s decision to raise taxes intended to finance increasing defense expenditures. The Nikkei 225 Index concluded the day 0.4 percent lower at 38,208.03, accumulating a weekly decline of 0.2 percent and marking its third consecutive week of losses. The broader Topix Index settled 0.2 percent lower at 2,680.71. Major exporters such as Sony, Toyota Motor, and Nissan saw declines ranging from 2 to 4 percent, while tech stocks like SoftBank and Tokyo Electron decreased by 1 to 2 percent.

The South Korean markets encountered the steepest decline in the region, a day after the Bank of Korea unexpectedly reduced interest rates, attributing the decision to slower-than-anticipated economic growth. Heightened geopolitical tensions on the Korean Peninsula also dampened investor sentiment, leading the Kospi benchmark to fall by 2.0 percent, closing at 2,455.91.

In Australia, markets ended slightly lower, and bond yields decreased across the yield curve. Reserve Bank Governor Michele Bullock cautioned against a prolonged period of restrictive monetary policy, stating that inflation remained "too high" for considering interest rate cuts. Meanwhile, across the Tasman Sea, New Zealand's benchmark S&P/NZX-50 Index experienced a slight uptick of 0.1 percent, closing at 13,066.92.

**Europe**

European stock markets displayed mixed performance as traders analyzed the latest eurozone inflation data for November. The U.K.'s FTSE 100 Index declined by 0.2 percent, while France's CAC 40 Index and Germany's DAX Index increased by 0.1 and 0.3 percent, respectively. Preliminary data revealed that France's harmonized inflation rate rose to 1.7 percent in November from 1.6 percent the previous month, aligning with expectations but remaining well below the European Central Bank's 2 percent target.

Elsewhere, official figures revealed that German retail sales decreased more than anticipated in October, with a month-on-month decline of 1.5 percent. Mining stocks generally moved upward due to growing expectations of new economic stimulus measures ahead of an important Chinese policy meeting next month.

Financial news highlighted that insurer Aviva saw a slight increase amid reports it had approached Direct Line's shareholders, indicating a possible hostile takeover attempt. Delivery Hero SE, an online food delivery platform, witnessed a rise after pricing its Middle Eastern unit’s initial public offering at the upper end of its indicated range. Meanwhile, motor retailer Caffyns experienced notable declines upon reporting stagnant revenue growth for the first half of the year.

**U.S. Economic News**

Today, no major economic releases are scheduled in the United States.