GoAI Market Wrap - 5th Dec

Stock Market

Overnight and this morning, the three major Wall Street indices hovered in place in front of all-time highs, while a batch of small-cap thematic stocks surged, pushing the small-cap index to a new high first.

 

At the close, the S&P 500 rose 0.11% to 6,857.12 points; the Nasdaq Composite rose 0.22% to 23,505.14 points; the Dow Jones Industrial Average fell 0.07% to 47,850.94 points.

 

As the benchmark most representative of U.S. small-cap stocks, the Russell 2000 Index closed up 0.76%, breaking above its previous high set on October 27.

 

(Russell 2000 daily chart, source: TradingView)

 

Miller Tabak chief market strategist Matt Maley commented that although the market has been consolidating over the past few days, the overall pattern remains good. Unless there is a sharp pullback in the next few trading sessions, the advantage will be on the bulls' side.

 

Maley also said that if there is a strong rebound at year-end, small caps may perform well. He said: “Breaking to a new, meaningful all-time high could ultimately attract momentum money buying, helping this segment achieve relative outperformance.”

 

Pre-market Friday, the market will receive the long-delayed U.S. September PCE inflation data. For this “outdated” data, analysts generally expect it to be slightly higher than August data and mark the 55th consecutive month above the Fed’s 2% target. Bank of America predicted in a Wednesday commentary that core PCE inflation will remain above 3% until at least Q3 2026 and still above 2% in 2027.

Global Hotspots

Presidents of DRC and Rwanda formally sign peace agreement

 

On December 4 in Washington, DRC President Félix Tshisekedi and Rwandan President Paul Kagame formally signed a peace agreement to end three decades of conflict.

 

The agreement was reached with mediation from the U.S., Qatar, and others. President Trump said before the signing that the U.S. would also sign bilateral agreements with DRC and Rwanda that day, “opening new opportunities for U.S. access to critical minerals.”

 

Global copper market on edge: Mercuria reportedly withdrawing massive tonnage

 

Latest news shows that commodity trading giant Mercuria has notified the London Metal Exchange (LME) of plans to withdraw large quantities of copper from Asian warehouses. Four sources revealed that Mercuria canceled warrants on December 2, planning to withdraw over 40,000 tonnes of copper metal stored in LME Asian warehouses. At current prices, this batch of copper is worth approximately $460 million.

 

LME data for that day also showed that copper warrant cancellations tracked by its warehouses surged 50,575 tonnes (the largest single-day increase since 2013 by tonnage), reaching 56,875 tonnes – 35% of total LME inventory.

 

After 10 years, Japan’s largest bank to relaunch money market funds

 

Mitsubishi UFJ Financial Group announced this week plans to relaunch money market funds in 2026.

 

Japan’s MMF market once had net assets exceeding ¥20 trillion, but prolonged low rates – especially after the BOJ’s 2016 negative rate policy – led domestic institutions to halt sales. MUFG will partner with blockchain platform Progmat to offer potential fund investors 24/7, 365-day real-time redemption services.

Corporate News

Meta reportedly planning up to 30% budget cut at metaverse division

 

Sources revealed that Meta executives have discussed the possibility of slashing budgets for the metaverse division by up to 30% next year. The division includes virtual world product Meta Horizon Worlds and Quest VR business.

 

Such a sharp cut would likely mean Meta starts laying off staff as early as January next year. The metaverse division is being asked to cut more deeply because the company has not seen the expected level of competition.

 

Wealthy U.S. households flooding into dollar stores

 

On Thursday local time, the largest U.S. dollar store Dollar General surged 14% after releasing earnings.

 

CEO Todd Vasos said on Thursday’s call that the previous quarter’s sales were driven by a “broad customer base,” noting that growth from high-income households was “disproportionately significant” as customer counts rose.

 

Tesla enters top 10 of U.S. authoritative auto brand rankings

 

Tesla made significant progress in Consumer Reports’ annual auto brand rankings, successfully entering the top 10 overall. Last year among over 30 auto brands, Tesla ranked 18th. In the latest list, Tesla ranked 10th out of 31 brands.

 

Microsoft announces price hike for commercial Office subscriptions

 

Microsoft said Thursday that it will raise prices for Office productivity software subscriptions aimed at business and government customers starting July 1 next year.

 

Statistics show that Microsoft launched the original Office 365 subscription in 2011 and did not raise commercial subscription product prices until 2022 – the only time so far. In January this year, Microsoft announced a price increase for consumer-facing Office suites.

 

Warner Bros. Discovery bidding war heats up, Netflix reportedly leading

 

As of press time, the competition to acquire Warner Bros. Discovery is ongoing. Sources say Netflix, Paramount-Skydance, and Comcast all submitted fresh bids this week, with Netflix’s offer being the highest. Earlier Thursday, Paramount-Skydance publicly accused the Warner Bros. Discovery board of “unfairness” and deliberately favoring Netflix.

Forex & Commodities

International oil prices rose on December 4. At the close, the front-month WTI crude oil futures contract on the NYMEX rose $0.75 to $59.7 per barrel, up 1.27%. COMEX gold futures front-month contract rose $5.40, or 0.13%, to $4,237.9 per ounce.

 

The U.S. Dollar Index rose on the 4th. The U.S. Dollar Index, which measures the dollar against six major currencies, rose 0.14% that day and closed at 98.990 in late New York trading.

Key Events

U.S. Treasury debt outstanding surpasses $30 trillion for the first time – double 2018 levels

Latest data shows that the U.S. Treasury’s outstanding debt balance has crossed the $30 trillion mark for the first time, roughly double the 2018 level.

 

This balance includes Treasury bills, notes, and bonds and is the core component of total federal debt. Meanwhile, total U.S. federal debt has risen to approximately $38.4 trillion. Of this, about $30 trillion is market-held debt, with the rest held by government internal accounts (such as the Social Security Trust Fund).

Cryptocurrency

Bitcoin 24h −0.47% to $92,378.89.

 

Ethereum −1.18% to $3,149.59.

 

XRP −4.01%, BNB −1.84%, Solana −3.29%.

 

Dogecoin −2.13%, Cardano −1.63%.

Key Events

BlackRock CEO: Unnamed sovereign wealth funds are buying Bitcoin dips, building long-term positions

 

According to Forbes, BlackRock CEO Larry Fink revealed that several unnamed sovereign wealth funds are buying Bitcoin, and when the price fell from its $126,000 peak, “they bought more.” Fink said these funds are “gradually” accumulating, adding positions in the $80,000 range to build long-term holdings.

 

In recent months, sovereign funds from Abu Dhabi and Luxembourg have disclosed purchases of BlackRock’s IBIT Bitcoin ETF shares.