Nasdaq 100 Inches Higher as Gold and Crude Oil Stage Rebounds

Also, 30-year T-bond, gold, crude oil and Japanese yen futures

1. Nasdaq 100 E-mini futures (/NQ): +0.41% 
2. 30-year T-bond futures (/ZB): -0.35% 
3. Gold futures (/GC): +1.65% 
4. Crude oil futures (/CL): +1.38% 
5. Japanese yen futures (/6J): -0.48% 

U.S. equity market futures are starting the Nvidia (NVDA) earnings week on mixed footing. Price action in the bond market today is proving to be more of the same, where bears are largely in control; the odds of a Federal Reserve cut in interest rates for December are effectively a coin-flip, down from above 80% last week. A broadly weaker U.S. dollar (save against the Japanese yen) may be helping commodities perk up at the start of the week, with all energy and metals futures trading higher. 

Nasdaq 100 futures (/NQZ4) were slightly higher to start the week this morning, following a sharp sell-off in the back half of last week. Tesla (TSLA) shares climbed in pre-market trading after President-elect Trump stated he wanted to loosen regulation around self-driving vehicles. Spirit Airlines (SAVE) fell 5% ahead of the bell after filing for bankruptcy. Redfin (RDFN) fell 5% after receiving an analyst downgrade. Traders are dialed in for the last big week of earnings, with Walmart (WMT) and Lowes (LOW) expected to report tomorrow.   

Treasuries continued to decline this morning as doubts around rate cuts weighed on bonds. Traders expect a rate cut in December, although the certainty of a cut has diminished significantly since the election. It’s a rather light week for economic data, which leaves the focus on the incoming administration’s cabinet picks and a set of Treasury auctions due later this week. The Treasury Secretary pick has the potential to drive some volatility across the equity and bond markets. The 30-year T-bond contract (/ZBZ4) fell about 0.5% this morning.  

Gold rebounded after posting its worst weekly performance since 2022 last week, dropping 4.6% amid a stronger dollar and higher bond yields. The threat of higher inflation from tariffs and other trade measures that are expected from the Trump administration has cut into the bullish sentiment around precious metals, which were enjoying steady gains through most of the year on the prospect of rate cuts.  

Energy stocks are slated for gains as crude oil prices rose to start the week, with oil contracts (/CLF5) rising over 1% this morning. President-elect Trump announced that oil executive Chris Wright would take over the Department of Energy. The Energy Select Sector SPDR (XLE) rose about 0.5% at the start of trading. Meanwhile, geopolitical tensions in Ukraine and Russia drove up prices as fighting intensified over the weekend. Data out of China last week also showed refinery throughput in the country fell nearly 5% in October from a year prior. 

Japanese yen futures (/6JZ4) fell 0.48% this morning as traders await comments from Bank of Japan Gov. Kazuo Ueda. The swaps market is pricing in about 15 basis points of rate hikes for next month’s meeting. Policymakers in Japan have expressed concern over the rapid weakening of the yen, but intervention would likely be ineffective, given the pricing in of the Trump trade through the rest of the year.  

Christopher Vecchio, CFA, tastylive’s head of futures and forex, has been trading for nearly 20 years. He has consulted with multinational firms on FX hedging and lectured at Duke Law School on FX derivatives. Vecchio searches for high-convexity opportunities at the crossroads of macroeconomics and global politics. He hosts Futures Power Hour Monday-Friday and Let Me Explain on Tuesdays, and co-hosts Overtime, Monday-Thursday. @cvecchiofx

Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater

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