US markets hope for fifth straight gain as US Black Friday sales hit new record

• UK markets underperform as energy stocks lag on lower crude and natural gas prices
• Precious metals a key area of strength, with 2024 looking to provide a potential golden year
• US markets aim for fifth week of gains, with Black Friday sales data signalling record demand

The FTSE 100 is underperforming its European peers this morning, with energy-stocks in the firing line ahead of this week’s OPEC meeting. Declines across both crude and natural gas prices do help allay fears of a potential inflationary surge, instead helping drive expectations of further downside for global CPI levels. With European and US gas storage levels well above the historical norm, the recent cracks seen in OPEC production agreements have helped drive down prices as markets start to question the strength of demand in the fourth quarter.

Precious metals enter the new week as one of the major areas of outperformance, as gold hits a fresh six-month high this morning. The historical perception of precious metals as a haven have come into question over recent years, with prices instead outperforming alongside risk assets of late. Ultimately, gold and silver have a historical tendency to strengthen at times of monetary easing, highlighting the potential for a strong 2024 as central banks prepare to normalize policy after a period of dramatic tightening.

US markets look set for a negative open today, as we enter what could be a fifth consecutive week of gains across all three major US indices. Declining US treasury yields have helped sentiment, with markets increasingly looking out for a Fed rate cut in the first half of 2024. The latest core PCE price index data due on Thursday should help further inform markets over the likeliness of such a swift return to monetary easing. With today’s cyber-Monday sales closing out a key weekend for retailers, early signs have pointed towards continued strength according to the key Adobe Analytics report. With Friday seeing US consumers splash a record $9.8 billion in online sales, we are yet to see whether this is a sign of overall strength for the fourth quarter or simply a sign that price conscious shoppers are seeking to front-load their purchases in a bid to avoid paying the full-ticket price. It is also worth noting that inflationary pressures mean that record sales should not necessarily be a big surprise, with businesses also having higher costs that mean record revenues may not necessarily result in record profits for retailers.