“There is only one side of the market and it is not the bull side or the bear side, but the right side.” – Jesse Livermore

1. New U.S. Report Complaint China Continuing ‘Unfair, Unreasonable’ Trade Practices — the U.S. Trade Representative said in an update to its “Section 301”, investigation into China’s intellectual property and technology transfer policies, Beijing has failed to take any substantive actions against its “unfair” trade practices. It’s not a good sign after last weekend’s tensious APEC summit. President Trump is also due to meet Xi Jinping in ten days at the G20 summit in Buenos Aires.
2. FedEx Adds EV Fleet — FedEx (NYSE:FDX) is adding 1,000 electric delivery vans to its fleet, which will come from Chanje Energy and Ryder System (NYSE:R). The vans can travel more than 150 miles and haul 6,000 pounds when fully charged, while having the potential to help FedEx save 2K gallons of fuel and avoid 20 tons of annual emissions per vehicle. All of the EVs will be operated in California.
3. Crypto Selloff Intensifies; Bitcoin Plunges 20% — Bitcoin (BTC-USD) hit the $4,000 level, continuing a week of major losses in the cryptocurrency world. The plunge comes amid a broad selloff in the equity markets, persistent concerns about regulatory scrutiny and disagreements within the coin developer community – known as a “hard fork.” Other cryptos down sharply include Ripple (XRP-USD), Bitcoin Cash (BCH-USD), Ether (ETH-USD) and Litecoin (LTC-USD).

The week ahead — Economic data from Econoday.com:

“We have to practice defensive investing, since many of the outcomes are likely to go against us. It’s more important to ensure survival under negative outcomes than it is to guarantee maximum returns under favorable ones.” ― Howard Marks

1. Gas to Top Coal as Energy Source by 2030 — natural gas is expected to overtake coal as the world’s second largest energy source after oil by 2030 due to a drive to cut air pollution and the rise of LNG. The estimates are based on the IEA’s “New Policies Scenario” that takes into account legislation and policies to reduce emissions and fight climate change. They also assume more energy efficiencies in fuel use and other factors.
2. California Wildfire Deadliest in State History — the death toll has reached 42 in California’s wildfire, making it the deadliest in state history, while an additional 228 people remain missing. Despite sharp criticism on Twitter, President Trump approved California’s request for federal disaster aid. Edison International (NYSE:EIX) and PG&E (NYSE:PCG), whose shares have plunged over the last two sessions, will likely face lawsuits blaming their faulty power lines for sparking the blazes.
3. OPEC and Its Partners Plan of Larger Output Cut — looking to avert an oversupply that has weakened prices, OPEC and its partners are reportedly discussing a proposal to cut crude output by up to 1.4M bpd for 2019, a larger figure than officials have previously mentioned. Oil prices are now experiencing the “normal volatility that comes in the run up to our conference [on Dec. 6]… it’s a period of anxiety for all stakeholders,” OPEC Secretary General Mohammed Barkindo told CNBC.
4. Thanksgiving Market Returns — courtesy of BIG, As shown in the table below, during years where the S&P 500 was positive but up less than 5% YTD heading into Thanksgiving week, the index’s average change during the week has been 0.00% with gains less than half of the time.

As we move past Thanksgiving, though, seasonal trends for the market based on this year’s performance so far improve. In those years where the S&P 500 was up less than 5% YTD heading into Thanksgiving week, the average gains the week after Thanksgiving was 0.41% with positive returns 55% of the time. For the remainder of the year, average returns were even stronger at +2.83%. Not bad for a period of just over five weeks!

The week ahead — Economic data from Econoday.com:

“Successful Investing takes time, discipline and patience. No matter how great the talent or effort, some things just take time: You can’t produce a baby in one month by getting nine women pregnant.” — Warren Buffett

1. U.S. Issues Eight Waivers From Iran Oil Sanctions — Eight countries including Turkey, Italy, India, Japan and South Korea – will receive temporary six-month waivers allowing them to continue to import Iranian petroleum products as they move to end such imports entirely, but the Islamic Republic can only spend the money on a narrow range of humanitarian items. Iran exported the equivalent of 2.5M barrels a day in April, before the announcement of sanctions turned away buyers.
2. China Ready for U.S. Trade Talks — Vice President Wang Qishan told the Bloomberg New that “The Chinese side is ready to have discussions with the U.S. on issues of mutual concern and work for a solution on trade acceptable to both sides,”. Ahead of his expected meeting with President Xi later this month, President Trump has threatened to impose further tariffs on $267B of Chinese imports if the two countries cannot reach a trade deal.
3. Canabis Pot Stocks Rally on AG Sessions Exit — the marijuana sector exploded to the upside after Attorney General Jeff Sessions resigned following months of public criticism from President Trump. A longtime opponent of attempts to legalize weed, Sessions lifted an Obama-era policy (known as the Cole Memo) earlier this year that kept federal authorities from cracking down on the pot trade in states where the drug is legal. Cannabis stocks added to their gains as Michigan approved recreational marijuana.
4. Google Plots Significant Expansion in NYC — Google is gearing up for an expansion of its NYC real estate that could add space for more than 12,000 new workers, an amount nearly double the search giant’s current staffing in the city, WSJ reports. Google (GOOG, GOOGL) plans on buying/leasing a 1.3M-square-foot office building at St. John’s Terminal and expanding its existing property at Chelsea Market by about 300K square feet. Amazon (NASDAQ:AMZN) is also considering the area for its second headquarters.
5. Midterm Results, Democrats take House and Republican Controls Senate — gridlock in Washington could also stall the White House’s bid to deregulate banking and financial services. Representative Maxine Waters, a fierce Trump critic and Wall Street foe, appears poised to take control of the House’s powerful financial services committee. The halt of deregulation legislation could also affect other sectors like energy, industrials and small business.
6. U.S. Oil Benchmark Drops Below $61/bbl in Bear Market Territory — U.S. crude is now down by around 20% since early October as rising supply and concerns of an economic slowdown pressure prices. Fresh U.S. sanctions are unlikely to cut as much oil out of the market as initially expected with Washington granting temporary exemptions to Iran’s biggest buyers. American production has also reached a new record high of 11.6M bbl/day.

The week ahead — Economic data from Econoday.com:

“Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be a more productive than energy devoted to patching leaks.” — Warren Buffett

1. U.S. Treasury See 2018 Borrowing Rising to $1.34T — the U.S. Treasury Department expects to issue $425B in debt this quarter, bringing government borrowing this year to $1.34T, more than double from 2017. The borrowing estimate is still $15B lower than its estimate in July. Separately, the Fed is expected this week to vote on standards that would change the way big banks are regulated, dividing institutions into categories based on risk factors.
2. Ford, Baidu Testing Self-Driving Cars in China — following an initial announcement made in June that the two companies would explore areas of cooperation in the fields of AI and connectivity, Ford (NYSE:F) and Chinese internet giant Baidu (NASDAQ:BIDU) said they are now teaming on self-driving cars. The two-year initiative will see the firms collaborate to meet the Level 4 standard set by U.S. industry organization SAE International – meaning autonomous vehicles developed by the two will not require intervention from a human driver.
3. U.S.-China Trade Developments — President Trump has asked officials in his administration to start drafting terms of a trade deal with Beijing, sources told Bloomberg, which reported that multiple agencies are involved in the effort. Hopes are for reaching an agreement with Chinese President Xi Jinping later this month at the G20 summit in Argentina.
4. Moody’s Cuts GE Credit Rating Again — General Electric fell for a sixth straight session after Moody’s lowered the company’s credit rating by two notches to Baa1 from A2, three notches above “junk” territory. The downgrade, which came a month after S&P cut GE’s credit rating, reflected “the adverse impact on GE’s cash flows from the deteriorating performance of the Power business… and misjudgment of financial prospects and operational missteps.”

The week ahead — Economic data from Econoday.com: