Signs of an economic recession appear, global asset rotation accelerates—Bitcoin and gold's "safe-haven dance"

The U.S. economy faces a slowdown, and market expectations for a shift in Federal Reserve policy are heating up. November ADP employment data recorded the largest decline since March 2023, with private sector jobs decreasing by 32,000, well below market expectations of a 10,000 increase. The Services PMI also fell to 54.1, hitting a new low since June. These data send a clear signal: U.S. economic growth is slowing down.

As a result, expectations for a December rate cut by the Fed have risen to nearly 90%, becoming the main driver behind the rebound in global risk assets. Led by Bitcoin, cryptocurrencies responded first, with Bitcoin currently quoted at $87,540, down 0.58% in 24 hours; Ethereum at $2,940, down 1.12%. Although there has been a recent correction, in the longer term, rate cut expectations have become a strong support for the crypto market.

Political Uncertainty Shakes Bond Markets, Dollar Under Pressure Breaks Below 99

Rumors that the White House may appoint Chief Economic Advisor Haskett as Federal Reserve Chair have sparked concerns in the bond market. Bond investors have expressed concerns to the U.S. Treasury—given that inflation issues are not fully resolved, political pressure could push the Fed toward excessive easing, which may exacerbate long-term risks.

This market concern is directly reflected in the performance of the dollar. The dollar index has fallen for nine consecutive days, breaking below 99.0, at 98.86, down 0.46%. The dollar’s weakness has opened space for other assets to rise: gold remains above $4,200 (currently $4,202, down 0.08%), and silver hit a record high of $58.97. This is a typical cross-asset rotation pattern of “weak dollar, strong commodities.”

LME Copper Breaks Record High, Tight Supply Pattern Emerges

London Metal Exchange (LME) spot copper prices hit a new high, at $11,488, briefly rising over 3.4% to above $11,500 during the session. Behind this breakthrough, supply tensions are intensifying.

LME data shows a surge in copper delivery orders from Asian warehouses, reflecting market concerns over copper supply. Frequent mine shutdowns from Chile to Indonesia have further squeezed global copper supply. More importantly, signals that Trump plans to impose tariffs on primary copper products by the end of next year have prompted traders to accelerate inventory buildup in the U.S.—many copper miners and traders are rushing to ship goods to the U.S. before tariffs take effect.

Major metals trader Moxie Energy Group warned last week that this trade pattern could trigger a global supply crisis in the first quarter of next year, with copper prices potentially breaking unprecedented highs. Chilean copper producer Antofagasta Plc’s stock surged over 5%, hitting a new all-time high, directly reflecting this outlook.

U.S. Stock Market Diverges with Gains, Tech and Non-Ferrous Metals Lead

Driven by expectations of rate cuts and safe-haven demand, major U.S. stock indices generally rose. Dow Jones up 0.86%, S&P 500 up 0.3%, Nasdaq up 0.17%. In contrast, China’s Golden Dragon Index fell 1.38%, highlighting regional differences.

Among popular stocks, non-ferrous metals and crypto-related concepts performed strongest. Alcoa rose over 6%, Coinbase and Kaiser Aluminum gained over 5%, Strategy increased over 3%. This reflects investors’ bullish outlook on commodities and a recovery in crypto assets. Meanwhile, storage and lithium miners declined, with SanDisk down over 5%, Micron Technology and Western Digital down over 2%, indicating concerns about semiconductor hardware demand.

European markets showed mixed performance: UK FTSE 100 down 0.1%, Germany DAX 30 down 0.07%, France CAC 40 up 0.16%.

Fed Policy Uncertainty and ECB’s Inflation Dilemma

European Central Bank Chief Economist Lane recently stated that there have been some “upward surprises” in eurozone inflation, challenging the ECB’s expectation that inflation will decline early next year. While low energy prices have supported inflation easing, some data are moving in the opposite direction, offsetting some positive factors. Latvian Central Bank Governor Kazaks explicitly said that with core inflation well above the 2% target, now is not the time to lower borrowing costs. The ECB will announce its policy decision on the 18th of this month, attracting high market attention.

Tech Giants in Action, AI Chip Competition Heats Up

Microsoft clarified on Wednesday that reports about lowering sales targets for AI products are false. Despite the official statement, sales performance of AI enterprise tools like Foundry in Azure has fallen far short of expectations, with some departments’ targets cut from doubling to only 50% growth. This indicates that commercialization of AI is still in exploration.

OpenAI announced on Wednesday the acquisition of startup Neptune, whose AI model training analysis tools are expected to help OpenAI and its clients better understand and optimize training processes. This move demonstrates OpenAI’s ongoing investment in AI infrastructure.

Nvidia’s latest data shows its newest AI servers can boost the computational efficiency of several new models by up to 10 times, especially in “Mixture of Experts” (MoE) architectures. Models like Moonshot’s Kimi K2 Thinking and DeepSeek have achieved a 10-fold performance increase. This progress indicates that even amid slowing chip demand growth, Nvidia continues to enhance competitiveness through hardware-software integration.

On export policies, U.S. lawmakers blocked the inclusion of the “Gain AI Act” in the annual National Defense Authorization Act, a major victory for Nvidia and other chip manufacturers’ lobbying efforts. The bill aimed to restrict chip exports to China and non-allied countries. The open stance of Trump and White House AI Advisor Sachs further pushed this outcome.

New Logic for Global Asset Allocation

From today’s market performance, a clear structural pattern of global asset rotation has emerged: dollar depreciation boosts commodity prices, rate cut expectations support risk assets, and supply tightness pushes up commodity valuations. Bitcoin, as a non-traditional safe-haven asset, is increasingly linked with gold and non-ferrous metals, while leading chip stocks in tech continue to attract attention amid policy support and demand certainty.

This synchronized rise and fall of multiple asset classes reflects deep underlying uncertainties in the global economy. Whether rate cut expectations can be fulfilled as expected, whether political uncertainties can be resolved, and whether supply chain bottlenecks can be alleviated—answers to these questions will determine the market direction in the coming weeks and months.