- Barry Adams
- 21 Dec, 2023
- New York City
Stocks advanced, benchmark indexes rebounded from sharp losses in the previous session, and crude oil prices were in focus after Angola said it plans to leave the OPEC+.
Benchmark indexes rebounded more than 0.4% in Thursday's trading after weekly jobless claims held steady and third-quarter GDP growth was revised slightly lower.
The S&P 500 index and the Nasdaq Composite fell 1.5% in Wednesday's trading as investors reacted negatively to FedEx's business outlook.
Moreover, investors also booked profit ahead of the year's end after the S&P 500 index gained more than 23% and the Nasdaq Composite advanced more than 42% in the year so far.
Investors reviewed the release of the third quarter GDP growth report and the weekly jobless claim update.
Weekly Jobless Claims Hold Steady
Initial jobless claims increased by 2,000 to 205,000 in the week ending on December 16, the U.S. Bureau of Labor Statistics reported Thursday.
Moreover, continuing claims decreased by 1,000 to 1.865 million in the previous week ending on December 9.
Initial claims are near a two-month low of 203,000, indicating tight labor market conditions, and the four-week moving average decreased by 1,500 to 212,000.
Third Quarter GDP Growth Revised Lower to 4.9%
Real gross domestic product increased at an annual rate of 4.9% in the third quarter, according to the third estimate from the Bureau of Economic Analysis.
The economic growth estimate was downwardly revised from 5.2%, but ahead of the 2.1% increase in the second quarter.
The U.S. economy expanded at the fastest pace since the fourth quarter of 2021, and the latest revision was driven by the downward revision to consumer spending and imports.
Consumer spending rose at a slower pace of 3.1% from the previous estimate of 3.6%, and the increase in imports was revised lower to 4.2% from 5.2% estimated in the second quarter.
However, residential investment growth was revised higher to 6.7% from 6.2%, and government spending increase was revised higher to 5.8% from 5.5%.
U.S. Indexes and Yields
The S&P 500 index gained 0.8% to 4,718.03, and the Nasdaq Composite increased 0.6% to 14,863.01.
The yield on 2-year Treasury notes increased to 4.35%, 10-year Treasury notes inched lower to 3.86%, and 30-year Treasury bonds eased to 4.0%.
Crude oil prices dropped below $74 a barrel after U.S. daily production surged to a record high of 13.3 million barrels a day last week, the Energy Information Administration reported Thursday.
Moreover, Anglo announced it is leaving OPEC+ after disagreement with the 2024 production quota.
Angola's departure raised doubts about the oil cartel's ability to control crude oil prices in 2024 as member nations struggle with rising global supplies amid stable demand from China.
WTI crude oil decreased $0.92 to $72.39 a barrel, and natural gas prices increased 10 cents to $2.55 a thermal unit.
Gold advanced $10.86 to $2,041.79 an ounce and extended this year's gains to 13.5%.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 102.06 and extended the previous week's loss of 1.4% and the loss of 0.9% in the year so far.
U.S. Stock Movers
Micron Technology advanced 7.4% to $84.47 after the advanced semiconductor chipmaker reported better-than-estimated revenue and a smaller-than-expected loss in its latest quarter.
The company's forward-looking quarterly revenue outlook was also ahead of some investors' estimates.
CarMax jumped 8.5% to $80.98 after the used car retailer reported better-than-expected quarterly results.
Boeing Company increased 1.7% to $264.70 after receiving approval from a Chinese aviation regulator to resume 737 Max deliveries to Chinese airlines.
Boeing still needs approval from China's National Development and Reform Commission, according to the trade publication Air Current.
Warner Bros. Discovery increased 0.1% to $11.70, Paramount Global decreased 1.4% to $15.28, and two companies were engaged in preliminary merger talks, according to a report by CNBC.
European Bond Yields Ease to One-year Low
European markets lacked direction with a downward bias, and investors booked profit ahead of the yearend.
The DAX index and the CAC-40 index edged down 0.5% in Thursday's session but gained above 18% and 14%, respectively, in the year so far.
Investors also reviewed the latest economic data from France and the government finance update from the UK.
France Business Confidence Indicator Rises to a 5-month High
The manufacturing climate indicator in France rose to 100 in December from 99 in November, the statistical agency INSEE reported Thursday.
The index rose to a five-month high since July, after inflation continued to ease and consumer spending remained resilient.
The opinion for finished goods inventory and past production showed improvement, but the opinion on overall new orders remained unchanged.
Meanwhile, the outlook for selling prices showed a slight deterioration, and the indicator measuring perceived economic uncertainty showed a slight improvement.
UK Public Sector Borrowing Remains Elevated
Public sector borrowing in November declined from a year ago and from the previous month, but the November month borrowing was still the fourth-largest since record-keeping began in 1993, the Office for National Statistics reported Thursday.
Borrowings, excluding public sector banks, eased to £14.33 billion, a decline of £0.9 billion from a year ago and eased from £16.0 billion in October.
The central government's spending rose from £0.7 billion to a record high of £87.6 billion.
Government spending on goods and services was £33.6 billion, net social benefits were £24.2 billion, subsidies were £2.2 billion, and the interest payable on central government debt was £7.7 billion.
The central government's receipts were £77.6 billion, an increase of £3.6 billion from a year ago and the highest in November since monthly records began in 1993.
Of this £77.6 billion, tax receipts were £58.2 billion, £2.7 billion more than in November 2022, with value-added tax (VAT) receipts and income tax receipts both increasing by £1.4 billion.
Borrowing in the financial year-to-November 2023 was £116.4 billion, £24.4 billion more than in the same eight-month period last year and the second highest financial year-to-November borrowing on record, the ONS release noted.
Public sector net debt rose 1.8% to £2.67 trillion at the end of November and rose to 97.5% of the UK's gross domestic product.
Excluding the Bank of England, debt was £2.42 trillion, or about 88.3% of GDP, or £252.8 billion (or 9.2 percentage points) lower than the wider measure.
Europe Indexes and Yields
The DAX index decreased 0.3% to 16,687.42, the CAC-40 index fell 0.2% to 7,571.40, and the FTSE 100 index declined 0.3% to 7,694.73.
The yield on 10-year German bonds decreased to 1.97%; French bonds inched lower to 2.48%; the UK gilts inched lower to 3.54%; and Italian bonds inched lower to 3.60%.
The euro traded higher to $1.094, the British pound inched higher to $1.262, and the U.S. dollar eased to 86.18 Swiss cents.
Brent crude decreased $1.01 to $78.69 a barrel, and the Dutch TTF natural gas decreased by €1.02 to €34.20 per MWh.
Europe Stock Movers
Swisscom AG decreased 0.6% to CHF 505.60 after reports suggested that the telecom operator is looking to bid for Vodafone Italia.
Alstom SA declined 0.6% to €12.12, and the company emerged as the winning bidder for a €900 million contract to maintain regional rolling stock in Victoria, Australia.
Sanofi SA dropped 0.4% to €88.80 after the company said it was ending the global clinical development program of tusamitamab ravtansine to treat certain types of lung cancer after the phase 3 trial did not meet its criteria.
Eni SpA decreased 0.05% after the Italian energy company announced an investment agreement with Switzerland-based Energy Infrastructure Partners AG.
The Swiss investment company agreed to invest €0.7 billion in Eni Plentude SpA, which focuses on gas and energy distribution and manages the electric vehicle charging station network.
Artemis Alpha Trust fell 1.0% to 338.56 pence after the company reported a fiscal first-half pre-tax loss of £11.4 million.
HICL Infrastructure PLC decreased 0.5% to 136.30 pence after the investment company announced it had agreed to acquire a 3.1% stake in the A63 highway concession in France for £20 million from another shareholder.
- Scott Peters
- 21 Dec, 2023
- New York City
Micron Technology advanced 7.4% to $84.47 after the advanced semiconductor chipmaker reported better-than-estimated revenue and a smaller-than-expected loss in its latest quarter.
Revenue in the fiscal first quarter ending in November increased to $4.7 billion from $4.1 billion; net loss expanded to $1.2 billion from $195 million; and diluted loss per share expanded to $1.12 from 18 cents a year ago.
The company's forward-looking quarterly revenue outlook was also ahead of some investors' estimates.
The company guided fiscal second quarter revenue around $5.3 billion and diluted loss per share around 45 cents.
CarMax jumped 8.5% to $80.98 after the used car retailer reported better-than-expected quarterly results.
Revenue in the fiscal third quarter ending in November declined 5.5% to $6.1 billion, net earnings advanced to $82 million from $37.6 million, and diluted earnings per share rose to 52 cents from 24 cents a year ago.
Total retail used vehicle unit sales declined 2.9% to 174,766 and comparable store used unit sales declined 4.1% from the prior year’s third quarter, respectively.
Higher car prices and elevated interest rates continue to make vehicle affordability challenging.
Total retail used vehicle revenues decreased 7.2% compared with the prior year’s third quarter, driven by the decrease in average retail selling price, which declined approximately $1,300 per unit, or 4.6%, as well as the decrease in retail used units sold.
Boeing Company increased 1.7% to $264.70 after receiving approval from a Chinese aviation regulator to resume 737 Max deliveries to Chinese airlines.
Boeing still needs approval from China's National Development and Reform Commission, according to the trade publication Air Current.
Warner Bros. Discovery increased 0.1% to $11.70, Paramount Global decreased 1.4% to $15.28, and two companies were engaged in preliminary merger talks, according to a report by CNBC.
- Brian Turner
- 21 Dec, 2023
- New York City
Real gross domestic product increased at an annual rate of 4.9% in the third quarter, according to the third estimate from the Bureau of Economic Analysis.
The economic growth estimate was downwardly revised from 5.2%, but ahead of the 2.1% increase in the second quarter.
The U.S. economy expanded at the fastest pace since the fourth quarter of 2021, and the latest revision was driven by the downward revision to consumer spending and imports.
Consumer spending rose at a slower pace of 3.1% from the previous estimate of 3.6%, and the increase in imports was revised lower to 4.2% from 5.2% estimated in the second quarter.
However, residential investment growth was revised higher to 6.7% from 6.2%, and government spending increase was revised higher to 5.8% from 5.5%.
- Barry Adams
- 21 Dec, 2023
- New York City
Stocks attempted a rebound after benchmark indexes fell sharply in the previous session.
The S&P 500 index and the Nasdaq Composite fell 1.5% in Wednesday's trading as investors reacted negatively to FedEx's business outlook.
Moreover, investors also booked profit ahead of the year's end after the S&P 500 index gained more than 23% and the Nasdaq Composite advanced more than 42% in the year so far.
Investors reviewed the release of the third quarter GDP growth report and the weekly jobless claim update.
Weekly Jobless Claims Hold Steady
Initial jobless claims increased by 2,000 to 205,000 in the week ending on December 16, the U.S. Bureau of Labor Statistics reported Thursday.
Moreover, continuing claims decreased by 1,000 to 1.865 million in the previous week ending on December 9.
Initial claims are near a two-month low of 203,000, indicating tight labor market conditions, and the four-week moving average decreased by 1,500 to 212,000.
Third Quarter GDP Growth Revised Lower to 4.9%
Real gross domestic product increased at an annual rate of 4.9% in the third quarter, according to the third estimate from the Bureau of Economic Analysis.
The economic growth estimate was downwardly revised from 5.2%, but ahead of the 2.1% increase in the second quarter.
The U.S. economy expanded at the fastest pace since the fourth quarter of 2021, and the latest revision was driven by the downward revision to consumer spending and imports.
Consumer spending rose at a slower pace of 3.1% from the previous estimate of 3.6%, and the increase in imports was revised lower to 4.2% from 5.2% estimated in the second quarter.
However, residential investment growth was revised higher to 6.7% from 6.2%, and government spending increase was revised higher to 5.8% from 5.5%.
U.S. Indexes and Yields
The S&P 500 index gained 0.1% to 4,740.31, and the Nasdaq Composite increased 0.4% to 14,950.07.
The yield on 2-year Treasury notes increased to 4.35%, 10-year Treasury notes inched lower to 3.86%, and 30-year Treasury bonds eased to 4.0%.
Crude oil decreased $1.34 to $72.86 a barrel, and natural gas prices increased 4 cents to $2.49 a thermal unit.
Gold advanced $7.36 to $2,036.47 an ounce and extended this year's gains to 13.5%.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 102.06 and extended the previous week's loss of 1.4% and the loss of 0.9% in the year so far.
U.S. Stock Movers
Micron Technology advanced 7.4% to $84.47 after the advanced semiconductor chipmaker reported better-than-estimated revenue and a smaller-than-expected loss in its latest quarter.
The company's forward-looking quarterly revenue outlook was also ahead of some investors' estimates.
CarMax jumped 8.5% to $80.98 after the used car retailer reported better-than-expected quarterly results.
Boeing Company increased 1.7% to $264.70 after receiving approval from a Chinese aviation regulator to resume 737 Max deliveries to Chinese airlines.
Boeing still needs approval from China's National Development and Reform Commission, according to the trade publication Air Current.
Warner Bros. Discovery increased 0.1% to $11.70, Paramount Global decreased 1.4% to $15.28, and two companies were engaged in preliminary merger talks, according to a report by CNBC.
- Inga Muller
- 21 Dec, 2023
- Frankfurt
European market indexes traded down ,and bond yields eased to 9-month lows as investors debated the future rate path and economic outlook.
The DAX index decreased 0.5% to 16,651.01, the CAC-40 index decreased 0.5% to 7,549.27, and the FTSE 100 index declined 0.4% to 7,681.78.
The yield on 10-year German bonds decreased to 1.97%; French bonds inched lower to 2.48%; the UK gilts inched lower to 3.54%; and Italian bonds inched lower to 3.60%.
Swisscom AG decreased 0.6% to CHF 505.60 after reports suggested that the telecom operator is looking to bid for Vodafone Italia.
Alstom SA declined 0.6% to €12.12, and the company emerged as the winning bidder for a €900 million contract to maintain regional rolling stock in Victoria, Australia.
Sanofi SA dropped 0.4% to €88.80 after the company said it was ending the global clinical development program of tusamitamab ravtansine to treat certain types of lung cancer after the phase 3 trial did not meet its criteria.
Eni SpA decreased 0.05% after the Italian energy company announced an investment agreement with Switzerland-based Energy Infrastructure Partners AG.
The Swiss investment company agreed to invest €0.7 billion in Eni Plentude SpA, which focuses on gas and energy distribution and manages the electric vehicle charging station network.
Artemis Alpha Trust fell 1.0% to 338.56 pence after the company reported a fiscal first-half pre-tax loss of £11.4 million.
HICL Infrastructure PLC decreased 0.5% to 136.30 pence after the investment company announced it had agreed to acquire a 3.1% stake in the A63 highway concession in France for £20 million from another shareholder.
- Bridgette Randall
- 21 Dec, 2023
- Frankfurt
European markets lacked direction with a downward bias, and investors booked profit ahead of the yearend.
The DAX index and the CAC-40 index edged down 0.5% in Thursday's session but gained above 18% and 14%, respectively, in the year so far.
Investors also reviewed the latest economic data from France and the government finance update from the UK.
French Business Confidence Indicator Rises to a 5-month High
The manufacturing climate indicator in France rose to 100 in December from 99 in November, the statistical agency INSEE reported Thursday.
The index rose to a five-month high since July, after inflation continued to ease and consumer spending remained resilient.
The opinion for finished goods inventory and past production showed improvement, but the opinion on overall new orders remained unchanged.
Meanwhile, the outlook for selling prices showed a slight deterioration, and the indicator measuring perceived economic uncertainty showed a slight improvement.
UK Public Sector Borrowing Remains Elevated
Public sector borrowing in November declined from a year ago and from the previous month, but the November month borrowing was still the fourth-largest since record-keeping began in 1993, the Office for National Statistics reported Thursday.
Borrowings, excluding public sector banks, eased to £14.33 billion, a decline of £0.9 billion from a year ago and eased from £16.0 billion in October.
The central government's spending rose from £0.7 billion to a record high of £87.6 billion.
Government spending on goods and services was £33.6 billion, net social benefits were £24.2 billion, subsidies were £2.2 billion, and the interest payable on central government debt was £7.7 billion.
The central government's receipts were £77.6 billion, an increase of £3.6 billion from a year ago and the highest in November since monthly records began in 1993.
Of this £77.6 billion, tax receipts were £58.2 billion, £2.7 billion more than in November 2022, with value-added tax (VAT) receipts and income tax receipts both increasing by £1.4 billion.
Borrowing in the financial year-to-November 2023 was £116.4 billion, £24.4 billion more than in the same eight-month period last year and the second highest financial year-to-November borrowing on record, the ONS release noted.
Public sector net debt rose 1.8% to £2.67 trillion at the end of November and rose to 97.5% of the UK's gross domestic product.
Excluding the Bank of England, debt was £2.42 trillion, or about 88.3% of GDP, or £252.8 billion (or 9.2 percentage points) lower than the wider measure.
Europe Indexes and Yields
The DAX index decreased 0.5% to 16,651.01, the CAC-40 index decreased 0.5% to 7,549.27, and the FTSE 100 index declined 0.4% to 7,681.78.
The yield on 10-year German bonds decreased to 1.97%; French bonds inched lower to 2.48%; the UK gilts inched lower to 3.54%; and Italian bonds inched lower to 3.60%.
The euro traded higher to $1.094, the British pound inched higher to $1.262, and the U.S. dollar eased to 86.18 Swiss cents.
Brent crude decreased $0.06 to $79.66 a barrel, and the Dutch TTF natural gas decreased by €1.82 to €35.35 per MWh.
Europe Stock Movers
Swisscom AG decreased 0.6% to CHF 505.60 after reports suggested that the telecom operator is looking to bid for Vodafone Italia.
Alstom SA declined 0.6% to €12.12, and the company emerged as the winning bidder for a €900 million contract to maintain regional rolling stock in Victoria, Australia.
Sanofi SA dropped 0.4% to €88.80 after the company said it was ending the global clinical development program of tusamitamab ravtansine to treat certain types of lung cancer after the phase 3 trial did not meet its criteria.
Eni SpA decreased 0.05% after the Italian energy company announced an investment agreement with Switzerland-based Energy Infrastructure Partners AG.
The Swiss investment company agreed to invest €0.7 billion in Eni Plentude SpA, which focuses on gas and energy distribution and manages the electric vehicle charging station network.
Artemis Alpha Trust fell 1.0% to 338.56 pence after the company reported a fiscal first-half pre-tax loss of £11.4 million.
HICL Infrastructure PLC decreased 0.5% to 136.30 pence after the investment company announced it had agreed to acquire a 3.1% stake in the A63 highway concession in France for £20 million from another shareholder.
- Arun Goswami
- 21 Dec, 2023
- Mumbai
Stocks in Mumbai struggled to advance after benchmark indexes plunged 1.5% in the previous session on the twin worries of rising coronavirus cases and the rate-path outlook.
The Sensex index decreased 233.80 points to 70,272.51, and the Nifty index fell 41.05 points to 21,085.09.
On the Mumbai stock exchange, 33 stocks traded at their 52-week highs and 20 stocks traded at their 52-week lows.
Zee Entertainment Enterprises rose 4.5% to ₹263.30 after Sony India agreed to discuss a possible merger extension deadline with the company.
Mazagon Dock Shipbuilders added 3.7% to ₹263.30 after the company won a ₹1,615 crore order to build six vessels from the defense ministry for coast guards.
Cochin Shipyard increased 2.9% to ₹1,266.85 after the company won a ₹488 crore contract from the defense ministry.
UltraTech Cement edged down 0.3% to ₹9,861.90 after the company agreed to acquire a 26% stake in Clean Max Terra.
Allcargo Logistics gained 3.7% to ₹282.60 after the company scheduled a 3-to-1 bonus to shareholders on record on January 2.
DOMS Industries Ltd. jumped 1.1% to ₹1,341.0 after the stationary products and arts supplies maker listed its stock and priced its initial public offering on Wednesday at v790 per share.
Inox India, or Inox CVA, priced its initial public offering at ₹660 per share and raised about ₹1,459 crore.
Inox India surged 44% to 949.70 on the first day of its trading on Thursday.
India Shelter Finance Corporation increased 1.1% to ₹549.70. The home financing company priced its initial public offering at ₹493 per share and raised ₹1,200 crore on Wednesday.
Indian Bank decreased for the second day in a row and fell 4.5% to ₹410.35 after the state-controlled bank completed the sale of 10.15 crore of institutional shares today.
Praveg Limited increased 1.4% to ₹658.0 after the company won a government order to build and manage 50 tents in the union territory of Lakshwadeep.
The company scheduled a board meeting on December 26 to evaluate fund-raising alternatives.
- Arjun Pandit
- 21 Dec, 2023
- Mumbai
Stocks in Mumbai traded down for the second day in a row following weak global markets.
The Sensex and the Nifty indexes declined 0.4%, tracking Wall Street losses of 1.5% in overnight trading.
Market sentiment was cautious after the Union Health Ministry asked states to closely monitor the latest variant of the coronavirus.
India recorded 614 coronavirus infections in the 24 hours to Tuesday after the first case was registered in Kerala by someone who had recently returned from Singapore.
Kerala registered 300 new cases of coronavirus and 3 deaths in the last 24 hours, according to information available on the Union Health Ministry website.
Nationwide, 358 new coronavirus cases were registered as of 8:00 a.m. Thursday.
Tamil Nadu and Karnataka health officials are on high alert for low but rising cases of coronavirus.
The Singapore Health Ministry issued a travel advisory for citizens and visitors and brought back the mask mandate after coronavirus cases surged to 56,043 in the week ending on December 9 from 32,035 in the previous week.
New cases have stabilize in the last past week, after the seven-day average declined to 7,730 on December 17 from the 7,870 on December 12.
At least 40 countries are reporting new coronavirus cases involving subvariant JN.1, including the U.S. and China.
India Indexes and Yields
The Sensex index decreased 233.80 points to 70,272.51, and the Nifty index fell 41.05 points to 21,085.09.
On the Mumbai stock exchange, 33 stocks traded at their 52-week highs and 20 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds held firm at 7.15%, and the Indian rupee hovered near ₹83.22 against the U.S. dollar.
The gold price increased by 0.07% to ₹62,457 per ten grams, and silver edged down by 0.1% to ₹75,399 per kilo.
Crude oil decreased by 0.1% to ₹6,168 per barrel, and natural gas fell by 1.1% to ₹195.60 per thermal unit.
India Stock Movers
Zee Entertainment Enterprises rose 4.5% to ₹263.30 after Sony India agreed to discuss a possible merger extension deadline with the company.
Mazagon Dock Shipbuilders added 3.7% to ₹263.30 after the company won a ₹1,615 crore order to build six vessels from the defense ministry for coast guards.
Cochin Shipyard increased 2.9% to ₹1,266.85 after the company won a ₹488 crore contract from the defense ministry.
UltraTech Cement edged down 0.3% to ₹9,861.90 after the company agreed to acquire a 26% stake in Clean Max Terra.
Allcargo Logistics gained 3.7% to ₹282.60 after the company scheduled a 3-to-1 bonus to shareholders on record on January 2.
- Brian Turner
- 20 Dec, 2023
- New York City
Existing home sales rose in November after declining for five months in a row, the National Association of Realtors said Wednesday.
Sales increased from the previous month in the Midwest and in the South but declined in the West and in the Northeast, but sales declined in all four regions from a year ago.
Existing home sales increased by 0.8% from the previous month in November but decreased by 7.3% from a year ago.
"The latest weakness in existing home sales still reflects the buyer bidding process in most of October, when mortgage rates were at a two-decade high before the actual closings in November," said NAR Chief Economist Lawrence Yun.
"A marked turn can be expected as mortgage rates have plunged in recent weeks," Yun added.
The median existing-home sales price advanced 4.0% from November 2022 to $387,600, the fifth consecutive month of annual price increases.
"Home prices keep marching higher," Yun added. "Only a dramatic rise in supply will dampen price appreciation."
The inventory of unsold existing homes decreased 1.7% from the previous month to 1.13 million at the end of November, or the equivalent of 3.5 months' supply at the current monthly sales pace.
- Barry Adams
- 20 Dec, 2023
- New York City
Market indexes managed to turn around from morning weakness and extend their gains for the third day of this week, despite the fact that policymakers continued to push back on the rate-cut narrative dominating the market.
The S&P 500 index rose 0.1%, and the Nasdaq Composite increased 0.4% after advancing on Tuesday.
The Nasdaq Composite built on 0.7% gains in the previous session and traded above the 15,000 mark for the first time since January 2022 after the market rally pushed the index higher in the previous seven consecutive weeks.
The S&P 500 index advanced and extended the previous session's gains of 0.6% and approached its record high in January 2022.
Both benchmark indexes have rallied for seven weeks in a row and advanced above 4.4% in December after investors expanded bets on the Federal Reserve's cutting rates in 2024.
Several inflation indicators confirmed the easing of inflation, bolstering market sentiment over the last two months.
Moreover, the Federal Reserve held the fed funds rate for the third time in a row, and signaled possible rate cuts in 2024, at the end of its final meeting on December 12–13, further fueling the market rally.
For the year so far, the S&P 500 index is at 24%, and the Nasdaq Composite gained 43.4%.
Existing Home Sales Expand After Five Months of Slide
Existing home sales rose in November after declining for five months in a row, the National Association of Realtors said Wednesday.
Sales increased from the previous month in the Midwest and in the South but declined in the West and in the Northeast, but sales declined in all four regions from a year ago.
Existing home sales increased by 0.8% from the previous month in November but decreased by 7.3% from a year ago.
"The latest weakness in existing home sales still reflects the buyer bidding process in most of October, when mortgage rates were at a two-decade high before the actual closings in November," said NAR Chief Economist Lawrence Yun.
"A marked turn can be expected as mortgage rates have plunged in recent weeks," Yun added.
The median existing-home sales price advanced 4.0% from November 2022 to $387,600, the fifth consecutive month of annual price increases.
"Home prices keep marching higher," Yun added. "Only a dramatic rise in supply will dampen price appreciation."
The inventory of unsold existing homes decreased 1.7% from the previous month to 1.13 million at the end of November, or the equivalent of 3.5 months' supply at the current monthly sales pace.
U.S. Indexes and Yields
The S&P 500 index gained 0.1% to 4,775.02, and the Nasdaq Composite increased 0.4% to 15,060.45.
The yield on 2-year Treasury notes increased to 4.38%, 10-year Treasury notes inched lower to 3.88%, and 30-year Treasury bonds eased to 4.0%.
Crude oil increased $0.14 to $74.08 a barrel, and natural gas prices decreased 2 cents to $2.47 a thermal unit.
Gold decreased $5.65 to $2,034.70 an ounce and halted a four-day rally following the Fed's rate decision and announcement to cut rates several times over the next two years.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 102.33 and extended the previous week's loss of 1.4% and the loss of 0.9% in the year so far.
U.S. Stock Movers
FedEx dropped 11.1% to $248.85 after the parcel delivery company reported mixed quarterly results and an estimated annual revenue outlook that fell short of investors' expectations.
Tesla decreased 0.2% to $256.68 after the company sharply lowered prices on luxury sedan vehicles in China to match lower prices from market leader BYD.
General Mills declined 4% to $64.0 after the food products maker reported quarterly earnings were ahead of expectations but revenue fell short of estimates, and the company lowered its annual outlook.
Winnebago Industries decreased 4.5% to $71.80 after the company issued a cautious outlook, citing macroeconomic headwinds.
Toro Company jumped 9.7% to $97.83 after the lawn mover maker reported better-than-expected quarterly results.
European Markets Diverged, UK Inflation Dropped to 26-month Low
European market indexes diverged, and investors digested the latest comments from central bankers.
Market indexes in Paris and Frankfurt declined but rose in London as investors reviewed another batch of economic releases.
The producer price index in Germany declined for the fifth month in a row and fell 7.9% in November, Destatis reported on Wednesday.
The producer price index decline was largely driven by the fall in energy prices from a high base in the previous year, and the decline was smaller than the 11.0% decline in October.
The German Consumer Climate Index Shows Improvement
Germany's consumer sentiment is expected to improve in January, according to a survey conducted by the market research firms GfK and Nuremberg Institute for Market Decisions.
The GfK Consumer Climate indicator for January 2024 rose to -25.1 from -27.6 in December, the highest since August, driven by higher income expectations and a desire to spend.
“It remains to be seen whether the current increase represents the beginning of a sustained recovery in consumer sentiment,” explains Rolf Bürkl, consumer expert at NIM.
UK Consumer Price Inflation Slows
The consumer price index declined to 3.9% in November from 4.6% in October, the Office for National Statistics reported Wednesday.
The inflation index declined to the lowest since September 2021.
The inflation pressures eased in transportation services, including air fares, used cars, recreation and cultural gathering admissions, and live music events.
Food and non-alcoholic beverage price inflation eased to 9.1% from 10.1%, but the cost of housing and utilities fell at a slower pace of 3.4% from 3.5% in the previous month.
Restaurants and hotels price inflation held steady at 7.5%, communication services inflation at 8.1%, and education at 4.5%.
Core inflation, which excludes food and energy prices, eased to 5.1% from 5.7% in October and dropped to the lowest since January 2022.
Europe Indexes and Yields
The DAX index decreased 0.07% to 16,733.05, the CAC-40 index inched down 0.04% to 7,572.68, and the FTSE 100 index increased 1.1% to 7,715.68.
The yield on 10-year German bonds decreased to 1.98%; French bonds inched lower to 2.50%; the UK gilts inched lower to 3.56%; and Italian bonds inched lower to 3.62%.
The euro traded higher to $1.095, the British pound inched higher to $1.265, and the U.S. dollar eased to 86.20 Swiss cents.
Brent crude decreased $0.26 to $79.41 a barrel, and the Dutch TTF natural gas decreased by €0.94 to €33.52 per MWh.
Europe Stock Movers
Energy stocks traded higher after crude oil prices rebounded more than 1.5% on supply disruptions and rising tensions in the Red Sea.
BP plc gained 0.8% to 467.45 pence, Shell plc advanced 1% to 2,568.0, TotalEnergies SE added 0.2% to €62.11, and Repsol increased 0.1% to €13.58.
Petrofac Ltd. soared 34.2% to 30.10 pence after the energy industry service provider won a $1.4 billion multi-year contract from TenneT to expand the Dutch-German transmission system operator's offshore wind capacity in the North Sea.
Telefonica rose 3.7% to €3.70 after the Spanish government said it plans to buy as much as a 10% stake in the telecom operator.
The government announced its plan after the Saudi Telecom Company revealed a 9.9% stake in the company in September.
Spain considers Telefonica a defense service provider, giving a veto power to the Defense Ministry over who owns and controls shares in the company over 5%, unless the stockholders give up rights to have a board seat.
Indivior PLC rose 2.8% to 1,179.0 pence after the company settled its patent dispute with Actavis Laboratories, a subsidiary of Israel-based Teva Pharmaceuticals.
Teva Pharmaceuticals advanced 0.9% to €9.48 in Paris trading.
Aurubis AG decreased 0.6% to €77.04 after the German copper company confirmed a 38% plunge in its earnings in the fiscal 2023 period ending in September.
Revenue in the fiscal year declined 8.8% to €17.0 billion from €18.5 billion, consolidated net income dropped 38% to €268 million from €433 million, and diluted earnings per share fell to €6.13 from €9.91 a year ago.
Deutsche Post AG decreased 1.4% to €45.10 after the U.S.-based FedEx lowered its full-year revenue outlook, citing macroeconomic challenges.