Tech Weakens; DAX Eyes 24,600 Resistance

What happened

• US Stocks: Broad decline Friday; Nasdaq underperformed.
  • Broadcom (AVGO): -11.4%, Q4 earnings showed AI backlog below expectations.
  • Oracle (ORCL): -4.6%, reports of OpenAI data center delays to 2028 (Oracle denied).
  • Tech sector: -3%; energy and communication also weaker.
• US–Mexico: Agreement on Rio Grande water dispute; reduces tariff risk (Trump threatened +5% tariff).
• White House Crypto: Sacks said China unlikely to accept NVIDIA H200; aims for semiconductor independence.
• China: Plans to expand exports and increase imports in 2026.
• EU: Crackdown planned on dangerous Chinese products sold online (Alibaba, Shein).
• France: Opposes EU-Mercosur vote; calls for December meeting delay.

Notable Headlines

• Trump uncertain economic policies will deliver midterm wins; expects improvement before election.
• Trump leaning toward Kevin Warsh or Kevin Hassett for Fed Chair; wants consultation on rates; target 1% or lower within a year.
• Hassett: would consider Trump’s views but maintain Fed independence.
• Fed’s Daly: supported last week’s cut; inflation above target, labor softening; decision aimed at balancing dual mandate.
• Apollo Management: short positions on tech firms vulnerable to AI; reducing sector exposure.

Asia

• Nikkei 225 underperformed ahead of BoJ rate hike; Tankan survey shows large manufacturers’ sentiment highest in 4 years (supports hike).

Europe – DAX

• Price Action
  • Current: 24,244.5
  • High: 24,233.5
  • Low: 24,210.8
  • Change: +0.04%
  • Key resistance: 24,604.0 (marked in green)
  • Key support: 23,786.7 (yellow horizontal line)
  • Long-term support: ~22,800 (red horizontal line)
• Trend
  • Recent strong rebound from November lows (~23,000).
  • Price approaching resistance zone near 24,600 after breaking above 23,786 support-turned-pivot.
• Indicators
  • MACD: Positive momentum; histogram above zero, signal lines widening → bullish bias.
  • RSI (14): 58.2 → neutral to slightly bullish; below overbought threshold (70).
  • ATR (14): 287.7 → moderate volatility.
• Structure
  • Market consolidating between 23,000–24,600 since July.
  • Current move suggests retest of upper range.

Implication

• Short-term bias: bullish until resistance at 24,600.
• Watch for breakout above 24,600 for trend continuation; failure could trigger pullback toward 23,786.

FX

• DXY flat; narrow range; market awaits NFP data; Trump reiterated Fed Chair preference and rate target comments.

Commodities

• Crude slightly higher; capped by lack of catalysts.
  • Geopolitical: Iran seized tanker with 6M liters diesel; progress in US–Ukraine peace talks (continuing Monday).

Platinum Market

• Price: $1,755/oz (12-year high).
• China/Hong Kong imports (Oct): -63% vs 2023–2025 monthly average.
• Global platinum-backed certificate holdings: +1% YTD; Europe & South Africa reduced positions.
• Auto industry demand (2026): <3M oz (first drop since 2022).
• New South African mine operational (Nov): supply increase expected.
• Guangzhou launched platinum futures: strong initial demand.
• U.S. considering 2026 import tariffs: stockpiling likely until decision.

Cannabis Sector

• Major Cannabis growers and cannabis focused ETFs gained on Friday with up to +~80% after a report Trump is expected to sign an executive order as soon as Monday that would ease federal marijuana restrictions.

EU Antitrust Probe

• Target: Google AI training practices using publisher content & YouTube.
• Potential penalty: up to 10% global annual revenue.
• Google denies wrongdoing.

Disney–OpenAI Deal

• Value: $1B, 3-year term.
• Scope: Disney IP licensed for OpenAI’s generative video tool (Sora).
• Restrictions: no model training on Disney IP; safeguards for creators.

U.S. AI Regulation

• Trump EO: blocks state-level AI laws; enforces single federal framework.
• Critics: states’ rights undermined; safety concerns remain.

Upcoming Events

• Central banks: BOE -25bps; ECB hold; BOJ +25bps.
• Data: U.S. non-farm payrolls (Nov), Global PMIs, EU CPI.
• Earnings: Micron & Nike.

 

-Philip Papageorgiou – Market Analyst
--X ex Twitter: PhilipForexCom