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WHAT HAPPENED OVERNIGHT:
· S&P +1.6%, sailed to new record high on start of formal Biden transition process.
· GSA green light for handover accompanied by Trump tweet citing “best interest of our Country”.
· Risk-on vs receding political risk. Reports of Yellen at Treasury added 2pts curve steepening (in 2-10).
· Banks & financials powered the rally. BAC +5.8% to 9mth high; JPM +4.6% on 20m shs, biggest in 2 weeks.
· Oil extended gains for the week to >7% (OPEC+ meeting next week) with front end closing gap vs longer dated.
· Hospitality & travel better again (wtd Value +3.5% vs Growth +1.3%). Techs never completely recovered shaky start, closed on a downtick.
· Asia ok but unspectacular with gains capped at half a percent. Tencent -1.6%, indicating tech to lag again today. China -1%, counter-cyclical.
· Australia +0.6%, traded narrow range all session with underpin from resources & financials. BHP +3% to record high, indicates SA open +1%.
SOUTH AFRICAN NEWS:
Expect JSE AllShare +0.25%.
· From SA close yday, S&P +0.8% (S&P futs +0.1%), gold unch ($1803), plat +$9 ($962), pall -$11 ($2335), copper unch ($3.32/lb), Brent crude oil +1.5% ($48.10), Dalian iron -0.3% (=spot $127/t), Singapore iron +0.3% ($124.89), Dalian coal +0.3%, ZCE thermal coal unch, steel rebar -0.2%, BHP parity +1%, USDZAR -0.8% (15.22), Tencent -1.6% (HKD 574).
· XDs: AFT 36c/CTK 87c/NPN 580c.
· CFR ex warrants today TERP CHF 77.88 / R130.92 (ie 2 CFRO per 1 at strike CHF 6.7, 67 warrants per 1 DR).
· XDs = c47 points. CFRO only starts trading on Fri, remains in top40 (until Dec 4) at zero valuation ie implied 27 pts off index today. NPN xd takes off another 20.7pts.
· Also due today: IVT (H1), ADR (H1), LEW (H1) 10am Oct CPI, 12pm Q4 BER Business Conf
TODAYS KEY DATA POINTS:
Global data – today
· 3.30pm: US Q3 GDP second read, Oct Durable Goods, initial jobless
· 5pm: US Oct Personal Income/Spend, Nov Uni of Mich Consumer Conf final read, Oct Home Sales
· 9pm: FOMC minutes
Global data – week ahead
· Thurs (Nov 26): US market closed for Thanksgiving
· Fri (Nov 27): US half day (Black Friday)
SA – week ahead
· Thurs (Nov 26): MRP (H1), TCP (FY), EOH (FY), PPC (H1), 11.30am Oct PPI
· Fri (Nov 27): QFH (FY), L2D (Q3), PFB (FY), OCE (FY)
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