The fear index fell to its lowest level since January 2020, and the bond market rally stalled this month

On Friday (Nov. 24), U.S. stocks barely moved in holiday-shortened trading, while U.S. Treasuries fell as the global bond rally this month showed signs of stalling.

The S & P 500 Index closed little changed, but rose for a fourth straight week. Wall Street's "fear gauge" VIX fell to 12.46, its lowest level since January 2020.

Bank of America analyst Michael Hartnett said investors are piling into stocks at the fastest pace in nearly two years as bets on peak interest rates continue to mount.

Global equity funds have seen inflows of about $40 billion in the two weeks ending Nov. 21, Michael Hartnett wrote in a report, citing EPFR data. Still, cash funds are the winners, adding nearly $1.20 trillion so far in 2023, compared with $143 billion for equity funds, while bond funds are generally seeing outflows.

"We bounced back from oversold conditions at the right time in season," said Steve Sosnick, analyst at Interactive Brokers. "It was based on the Fed ending its rate hike cycle, so that's fine. But now it looks like it's based on a rapid easing cycle, which could require a worse economy than investors expected."

In economic news, a S & P Global survey showed that employment at U.S. service providers and manufacturers fell in November for the first time since mid-2020 due to tepid demand and rising costs.

European bonds fell on fears of a surge in supply, and US Treasuries fell with them. Germany's top court ruled last week to force the government of Chancellor Olaf Scholz to undertake sweeping budget reforms, and Germany will suspend constitutional limits on new net borrowing for the fourth year in a row.

Andrew Brenner, analyst at NatAlliance Securities, said: "At the end of Black Friday morning, we had a higher attitude towards US Treasury yields because of what happened in Germany yesterday. Ten-year Bunds rose as a result of a court ruling that led to Germany suspending its debt ceiling. Other European rates followed, as did US Treasuries."

Gold moved slightly higher on Friday, just below $2,000. Silver moved slightly higher. Some chart-based buying will come at the end of the trading week, as the technical stance for both metals is bullish. A weaker dollar index is also positive for metals today. However, weaker crude oil prices and higher U.S. Treasury yields are bearish factors for the outside market, limiting the upside for gold and silver. December Gold ended up $3.90 higher at $1,996.70. December Silver ended up $0.057 higher at $23.745.

foreign exchange marketIn China, the Canadian dollar ended up being the strongest among the major currencies, while the U.S. dollar was the weakest. Canadian retail sales rose 0.6% this month, much stronger than expected. The data helped push the dollar lower against the Canadian dollar, which tested the 38.2% retracement level from the July low of 1.35908. Prices rallied from that target, trading at 1.3611, as the market gradually retreated during the holiday-shortened week. The dollar fell despite the U.S. 10-year Treasury yield rising 5.4 basis points to 4.470%. The discrepancy can be explained by a technical breakout. The U.S. 10-year Treasury yield has moved off the 4.34% support level. For the dollar, some major currency pairs also broke today, pushing the dollar lower.

Next trading day focus, weather vane:

03:00 UK November CBI Retail Sales Expectations Index

07:00 October New Home Sales in the United States (Annualized Monthly Rate)

16:30 Australia October Quarterly Adjusted Retail Sales (Monthly Rate)

06:00 European Central Bank President Christine Lagarde addressed the European Parliament

Analysis of major currency trends:

EUR: EUR/USD rose, closing at 1.0932, up 0.28%. Technically, the preliminary resistance to the upside of the exchange rate is at 1.0947, further resistance is at 1.0952, and the key resistance is at 1.0975; the preliminary support to the downside of the exchange rate is at 1.0883, further support is at 1.0860, and more critical support is at 1.0837.

GBP: GBP/USD rose, closing at 1.2594, up 0.50%. Technically, the preliminary resistance to the upside of the exchange rate is at 1.2603, further resistance is at 1.2714, and key resistance is at 1.2815; the preliminary support to the downside of the exchange rate is at 1.2494, further support is at 1.2455, and more critical support is at 1.2420.

JPY: USD/JPY closed lower at 149.39, down 0.09%. Technically, the preliminary resistance to the upside of the exchange rate is at 149.88, the further resistance is at 150.18, and the key resistance is at 150.68; the preliminary support to the downside of the exchange rate is at 149.08, the further support is at 148.58, and the more critical support is at 148.28.