Key Takeaways
- Federal Reserve Governor Waller is advocating for a rate cut at the December meeting, citing a weak labor market and inflation that, excluding tariffs, stands around 2.4% or 2.5%.
- Ukraine's delegation for peace talks is returning from Geneva, following discussions between Russian President Putin and Turkish President Erdogan regarding a potential peace plan, with Erdogan offering to mediate.
- US Agriculture Secretary Rollins announced that aid for farmers is expected to be unveiled in the week after Thanksgiving, confirming that China has already begun purchasing US soybeans.
- Spot gold prices have surged past the $4,080/oz mark, climbing 0.36% intraday, while US pre-market trading shows strong gains for tech giants like Google (GOOGL) at +3.5% and Tesla (TSLA) at +2.1%.
- The US housing market experienced a significant imbalance in October, with home sellers exceeding buyers by 37%, marking the widest gap recorded since 2013, according to Redfin.
Federal Reserve Signals Potential Rate Cuts Amidst Labor Market Concerns
Federal Reserve Governor Waller has indicated a potential shift towards a more accommodative monetary policy, advocating for a rate cut at the upcoming December meeting. Waller expressed concerns over the labor market's weakness, stating that most private-sector data suggests a soft job market and that he does not anticipate a turnaround in the next few weeks. He also noted that the September jobs number is likely to be revised down, with its concentrated nature not being a positive sign.
Despite a recent uptick, Waller believes inflation is set to decline, estimating ex-tariff inflation to be around 2.4% or 2.5%. He highlighted that available data since the last Fed meeting suggests no significant change, and inflation is not a major problem given the weak labor market. Looking ahead, Waller expects a more meeting-by-meeting approach by January, acknowledging that the month will be tricky with a flood of new data influencing future rate decisions. He also emphasized the importance of press conferences for clarity and transparency, though their organization might see changes.
Geopolitical Developments: Ukraine Peace Talks and Regional Diplomacy
Ukraine's delegation for peace plan talks is reportedly heading home from Geneva, signaling a significant moment in the ongoing diplomatic efforts. This development follows recent discussions between Russian President Vladimir Putin and Turkish President Recep Tayyip Erdogan, where they reportedly addressed the Ukraine peace plan.
President Erdogan has communicated his readiness to mediate in the conflict, according to reports. Concurrently, a German Foreign Ministry official stated that ministers have agreed to continue discussions soon, indicating broader international engagement on the issue.
US Agriculture Sector Sees Aid and Renewed Trade with China
US Agriculture Secretary Rollins has provided updates on crucial support for American farmers and international trade. Rollins announced that farmer aid is expected to be unveiled in the week following Thanksgiving, with a formal announcement anticipated soon.
In a positive development for agricultural trade, Secretary Rollins confirmed that China has almost immediately resumed buying US soybeans. This resumption of purchases could provide a significant boost to US agricultural exports and farmer incomes.
Market Movements: Gold Surges, Tech Leads Pre-Market Gains
Global financial markets are seeing notable movements, with spot gold climbing above $4,080 per ounce, marking a 0.36% increase intraday. This surge in gold prices often reflects investor uncertainty or a flight to safety.
In the US pre-market, major indices showed gains, with the S&P 500 futures (ES) up 0.4%, Nasdaq 100 futures (NQ) rising 0.7%, and Russell 2000 futures (RTY) increasing 0.2%. Among the "Magnificent Seven" tech stocks, Google (GOOGL) led the pack with a 3.5% gain, followed by Tesla (TSLA) up 2.1%. Amazon (AMZN) saw a 0.6% rise, Meta (META) was up 0.9%, Microsoft (MSFT) gained 0.4%, and Nvidia (NVDA) increased by 0.6%. Apple (AAPL) remained flat.
A key development in the tech sector is the ongoing review by the US government regarding whether Nvidia (NVDA) can sell its H200 AI chips to China, a decision that comes as bilateral ties between the two nations show signs of warming. Conversely, Novo Nordisk (NVO) shares fell 10% after its Evoke Phase III trials reportedly did not yield expected results.
Housing Market Imbalance and Tariff Impacts
The US housing market experienced a significant shift in October, with home sellers outnumbering buyers by 37%. This represents the widest gap recorded since 2013, according to Redfin, indicating a substantial increase in housing supply relative to demand.
Separately, a report from the San Francisco Federal Reserve suggests that tariffs contribute to lower inflation and weaker aggregate demand, which in turn leads to higher unemployment. This analysis highlights the broader economic implications of trade policies.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.