US futures
Dow futures 0.39%, S&P futures 0.3% & Nasdaq futures 0.35%
In Europe
FTSE 0.17% & DAX 0.94%
- Stocks extend gains after Trump dials back Greenland threats
- Gold still trades near record highs, so some caution remains
- US GDP rises to 4.4%, and core PCE remains at 2.8%
- Oil falls as geopolitical risks ease
Trump withdraws tariff threats over Greenland
US Markets are opening higher, extending yesterday’s gains after President Trump dialled back his threat of a trade war with Europe over Greenland, bringing a return to the TACO trade - Trump always chickens out - the idea that the market sell-off limits Trump’s aggressive move, forcing him to retreat.
US indices closed higher on Wednesday and are extending these gains today, with the Dow Jones once again looking towards record highs amid an improving risk mood. However, it's worth noting that while US indices are holding solid gains, Gold is trading near record levels. This suggests that caution remains in the market. While Trump has announced a framework for a deal over Greenland, details are lacking. Furthermore, Trump’s TACO strategy is creating policy uncertainty and eroding the administration's credibility.
However, broadly speaking, the market is trying to move on from the Greenland saga and is looking to economic data.
US GDP showed that the economy expanded at a faster pace than initially reported, thanks to stronger exports and a smaller drag from inventories. U.S. Q3 GDP was 4.4% annualised, the fastest pace of growth in two years. It was also one of their strongest back-to-back quarters for growth since 2021.
US core PCE, the Fed's preferred inflation gauge for November, was also released. This was delayed from the US government shutdown and shows that Core PCE rose at 2.8% year on year, in line with October and as expected. There were few surprises in the data, only personal income came in lower than forecast at 0.1% in November, down from 0.4%.
Sticky inflation and solid growth provide little incentive for the Fed to cut rates further for now. These data points support the Fed’s wait-and-see stance.
Corporate news
Procter & Gamble is fallling 1.5% after fiscal Q2 revenue missed forecasts. The consumer packaged goods company posted revenue of $22.21 billion, below the $22.28 billion expected; however, EPS of $1.88 beat expectations of $1.86.
Alibaba’s US-listed shares are rising 4% following a Bloomberg report that Alibaba is planning an IPO for its AI chipmaking unit T-Head.
Intel, the chipmaker, is climbing 1% ahead of Q4 earnings, which are expected after the closing bell. Expectations are for revenue of $13.42 billion U.S. dollars and EPS of eight cents a share.
Dow Jones forecast – technical analysis.
The Dow Jones has rebounded higher from this week’s 48,300 low, recovering up towards the record high of 49,680. The RSI is above 50 and rising, supporting further upside. A rise above 49,680 would set a new record high. Sellers will look to break below 48,300 to bring the 48,000 support zone into focus: the 50 SMA, the rising trendline support and the round number. A break below here creates a lower low and opens the door to a steeper selloff.
FX markets – USD falls, EUR/USD rises
The U.S. dollar is pulling back after yesterday's gains due to concerns about the credibility of U.S. policy and the risk of more aggressive rate cuts from the Federal Reserve.
EUR/USD is rising amid USD weakness, despite a slightly dovish tilt in the ECB minutes. The minutes showed that some policymakers viewed inflation risks as tilted to the downside.
GBP/USD is unchanged despite ongoing USD weakness, as investors shift their attention back to economic data and the BoE outlook. This week's data showed the UK jobs market weakened further, potentially easing the Bank of England's concerns about persistent inflationary pressures.
Oil holds steady amid Trump’s tariff threats.
Oil prices are falling after three days of gains, following U.S. President Trump's softer rhetoric toward Greenland and Iran, as investors weighed the supply-and-demand outlook.
Oil prices rose on Wednesday after OPEC producer Kazakhstan halted output at two key oil fields due to a Power Distribution issue. Furthermore, fading risk premiums weigh on oil as threats towards Greenland and Iran are dialled back. Against this backdrop, oil prices should hold around $ 60.00 per barrel.
The International Energy Agency revises its 2026 global demand growth forecasts higher, pointing to a slightly narrower surplus this year and limiting downside in prices.
