5 Things You Need to Know to Start Your Day

Good morning. A strong month for US stocks, the Fed’s Powell set to speak and confusion reigns among oil traders. Here’s what’s moving marke [View in browser]( [Bloomberg]( Good morning. A strong month for US stocks, the Fed’s Powell set to speak and confusion reigns among oil traders. Here’s what’s moving markets. — [Sam Unsted]( Bumper month US stocks posted their [best month in close to a year-and-a-half]( and had their second-best November since 1980s, defying the skeptical calls and fueling hopes that more gains are to come. This was mostly down to plunging bond yields amid mounting signs that the Federal Reserve is managing to tame inflation without breaking the economy. [Money-market fund assets]( surged to a fresh all-time high and Cathie Wood got in on the action too, with her ARKK Innovation ETF [racking up a 31% gain for the month](. S&P 500 futures are pointing to another small rise today. Powell speaks Federal Reserve Chair Jerome Powell is set to speak at Spelman College in Atlanta on Friday, with the expectation he will reiterate the Fed’s stance that it remains too early to declare victory and start talking about rate cuts. Fed officials, however, [have shifted their tone this week]( and at least moved closer to the cuts question. Six of the policymakers that will vote next year, who spoke in the past week, indicated comfort at where rates are now and for keeping them steady at the December meeting. Powell’s predecessor, Treasury Secretary Janet Yellen, said she sees a [good chance of a soft landing]( and avoiding a sharp spike in unemployment. Crude confusion Oil prices steadied after the drop suffered yesterday following an OPEC+ meeting which [sewed confusion among traders](. The cartel promised further cuts to output but was hazy on the details, with the lack of a concluding press conference and final communiques leaving the market puzzled. Notably, the cuts agreed are voluntary, so whether the additional supply cuts that were announced will be delivered remains to be seen. China’s gradual steps China is gradually following through on a pledge to [fix investors’ shattered confidence in the country](, particularly in the wake of the meeting between Xi Jinping and US President Joe Biden. A series of concessions on market access have been made since that summit, including approving joint ventures and mergers, plus visa-free access for six countries. Authorities there also continue to intervene to bolster markets, with a [rally for Chinese stocks on Friday]( reportedly driven by a state institution buying exchange-traded funds. Truce lapses Israel has [resumed combat]( against Hamas in the Gaza Strip following a week-long truce coming to an end on Friday morning. Israel’s army said that Hamas had violated the cease-fire shortly after the pause in fighting ended. US Secretary of State Anthony Blinken was in Tel Aviv when the fighting resumed, but was due to leave shortly after. He said he told Israeli leaders that they [must not repeat]( the scale of destruction and displacement seen before. What We’ve Been Reading This is what’s caught our eye over the past 24 hours. - Tesla finally launches [the Cybertruck](. - [Chocolate prices]( are rising everywhere. - Road bumps ahead for [private credit](. - A tiny, reusable fighter jet that [blows up drones](. - A woman [finds $86 million]( mistakenly in her bank account. - An island thriving by [welcoming migrants](. - Microsoft as the co-pilot on the [OpenAI rocket ship](. And finally, here's what Katie’s interested in this morning It’s that time of year when everyone pokes fun at Wall Street strategists for their year-ahead targets that never came to fruition. There’s plenty of material to make hay with this time around: recall that heading into 2023, the average forecast called for the S&P 500 to decline, the first negative prediction since at least 1999. So naturally, the S&P 500 is sitting on 19% year-to-date gains. But an interesting wrinkle is that the root cause of some of the most bearish fantasies was generally correct: the Federal Reserve was more aggressive than widely expected, and yields soared to eye-watering heights as a result. However, it was the follow-through from those higher rates that has yet to materialize: the widely heralded recession never came, corporate profits didn’t exactly crater and US consumers are still spending. There are a few potential reasons why. The US economy is less rate-sensitive compared to past cycles. The S&P 500’s heaviest hitters don’t necessarily have an adversarial relationship with higher rates. And, companies like Alphabet and Tesla have actually profited from their massive cash hoards in recent quarters. The 2023 Wall Street forecasting experience raises a question that this newsletter has asked before: even if you knew, what would you do? Having the proper information and starting point in hand is useful, but markets are under no obligation to behave. It’s a fun thought exercise. Follow Bloomberg's Katie Greifeld on X [@kgreifeld]( Like Bloomberg's Five Things? [Subscribe for unlimited access]( to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. [Bloomberg Markets Wrap: The latest on what's moving global markets. Tap to read.]( Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. 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