Stocks Dip Amid US Economic Worries
Market Overview: The S&P 500 and Dow Jones are down slightly, while the Nasdaq is up marginally. Economic concerns are impacting the market, with the S&P 500 hitting a 2.5-week low due to rising unemployment and stagnant retail sales.
Economic Indicators: November nonfarm payrolls increased by 64,000, surpassing expectations, but the unemployment rate rose to a four-year high of 4.6%. Average hourly earnings showed the smallest year-on-year increase in 4.5 years, indicating easing wage pressures.
Interest Rates and Bonds: The 10-year T-note yield rose slightly, influenced by stronger-than-expected retail sales data. The yield curve has steepened, reflecting investor behavior and concerns about inflation, while European bond yields also increased.
Stock Movements: Energy stocks are underperforming due to a drop in crude oil prices, with several major companies seeing declines. Conversely, stocks like Cognex and Southwest Airlines are gaining after positive upgrades from analysts.
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Trump Criticizes Powell on Interest Rates, Links It to National Security – Claims Fed Policy Is Costing the US 'Hundreds of Billions of Dollars Annually'
Federal Reserve's Decision: The Federal Reserve has decided to keep the key borrowing rate unchanged, maintaining it within the 3.5% to 3.75% range, aligning with market expectations despite previous rate cuts totaling 75 basis points in 2025.
Economic Activity: The FOMC noted that economic activity is expanding at a solid pace, although job gains remain low and inflation is somewhat elevated, indicating a mixed economic outlook.
Trump's Criticism: President Donald Trump criticized Federal Reserve Chair Jerome Powell for maintaining high interest rates, arguing that it is detrimental to U.S. national security and unnecessary given the current economic conditions.
Potential Government Shutdown: The Fed's decision may be followed by significant macroeconomic and political developments, including a potential U.S. government shutdown and Trump's upcoming nomination for the next Fed Chair position.
Gold, Silver, or Stocks? The Return Discrepancy for 2026 is Astonishing
Investment Returns: An investment of $10,000 in gold and silver a year ago would now be worth $20,000 and $38,300, respectively, while similar investments in major stock indices would yield lower returns.
Gold and Silver Performance: Gold prices have surged over 3% recently, reaching a new high of $5,595 per troy ounce, while silver prices also rose, touching $120.44 per troy ounce.
Market Drivers: Analysts attribute the rising gold prices to geopolitical tensions and a weakening dollar, alongside increased investor demand for safe-haven assets.
Future Projections: Experts predict that gold could reach $6,000 per troy ounce by 2026, driven by ongoing geopolitical issues and structural supply deficits in precious metals.