- 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.
- Scott Peters
- 20 Dec, 2023
- New York City
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.
Revenue in the fiscal second quarter ending in November decreased to $22.2 billion from $22.8 billion. Net income edged up to $900 million from $788 million, and diluted earnings per share rose to $3.55 from $3.07 a year ago.
The company estimated full-year revenue to decline by a "low-single-digit" percentage compared to the prior estimate of flat revenue growth.
The company estimated full-year diluted earnings per share to range between $15.35 and $16.85 before mark-to-market retirement plans accounting adjustment and between $17.0 and $18.50 excluding costs related to business optimization initiatives.
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.
Revenue in the fiscal second quarter ending on November 26 declined 2% to $5.1 billion from $5.2 billion, net income declined 2% to $595.5 million from $605.9 million, and diluted earnings per share rose to $1.02 from $1.01 a year ago.
North American organic net and reported sales declined 2% after organic volume fell 5 percentage points, offset by a 4 percentage point increase in price.
The company revised its annual sales growth outlook for full-year fiscal 2024.
Organic net sales are estimated to range between a decrease of 1% and flat from the previous estimate of growth between 3% and 4%, reflecting a slower volume recovery in the year.
The company reiterated its free cash flow conversion to be at least 95% of adjusted after-tax earnings.
Winnebago Industries decreased 4.5% to $71.80 after the company issued a cautious outlook, citing macroeconomic headwinds.
Revenue in the fiscal first quarter ending on November 25 declined 19.9% to $763.3 million from $952.2 million, net income declined from $25.8 million to $60.2 million, and diluted earnings per share eased to 78 cents from $1.73 a year ago.
Towable RV segment revenue decreased 4.8% to $330.8 million, primarily driven by a decline in average selling price related to product mix and targeted price reductions.
Motorhome RV segment revenue plunged 28% to $334.4 million, reflecting a decline in unit volume and a higher level of discounts.
Marine segment revenue dropped 33.5% to $87.3 million because of fewer unit sales and higher-than-normal discounts.
Toro Company jumped 9.7% to $97.83 after the lawn mover maker reported better-than-expected quarterly results.
Revenue in the fiscal fourth quarter ending in October declined to $983 million from $1.2 billion, net income dropped to $70.3 million from $117.6 million, and diluted earnings per share eased to 67 cents from $1.12 a year ago.
The company estimated fiscal 2024 sales to advance in a low single-digit range and adjusted diluted earnings per share in the range of $4.25 to $4.35.
- Barry Adams
- 20 Dec, 2023
- New York City
Stocks struggled in early trading, and market indexes turned lower after policymakers continued to push back on the rate-cut narrative dominating the market.
The S&P 500 index and the Nasdaq Composite decreased as much as 0.2% after advancing on Tuesday.
The Nasdaq Composite advanced 0.7% 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 gained 0.6% and approached its record high in January 2022.
Both benchmark indexes have rallied for seven weeks in a row and advanced 4% in December after investors expanded bets on the Federal Reserve's cutting rates in 2024.
Market sentiment was also bolstered in the last two months after several indicators confirmed the easing of inflation and the Federal Reserve held the fed funds rate for the third time in a row at the end of its final meeting on December 12–13.
For the year so far, the S&P 500 index is at 24%, and the Nasdaq Composite gained 43.4%.
U.S. Indexes and Yields
The S&P 500 index gained 0.4% to 4,758.54, and the Nasdaq Composite increased 0.4% to 14,961.41.
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 $0.90 to $74.85 a barrel, and natural gas prices decreased 2 cents to $2.51 a thermal unit.
Gold decreased $7.33 to $2,033.12 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.
- Inga Muller
- 20 Dec, 2023
- Frankfurt
European markets traded mixed, and investors debated the rate path and economic outlook after the UK's consumer price inflation dropped to a 26-month low and Germany's producer price index declined for the fifth month in a row.
The DAX index decreased 0.08% to 16,736.24, the CAC-40 index inched down 0.04% to 7,572.68, and the FTSE 100 index increased 0.8% to 7,696.15.
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%.
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.
- Bridgette Randall
- 20 Dec, 2023
- Frankfurt
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 0.08% to 16,736.24, the CAC-40 index inched down 0.04% to 7,572.68, and the FTSE 100 index increased 0.8% to 7,696.15.
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 $1.26 to $80.25 a barrel, and the Dutch TTF natural gas decreased by €1.24 to €33.94 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.
- Arjun Pandit
- 20 Dec, 2023
- Mumbai
Japan's trade deficit plunged 62% to 0.77 trillion yen in November from 2.06 trillion yen a year ago, the Ministry of Finance reported in its preliminary report on Wednesday.
Merchandise exports fell 0.2% to 8.8 trillion yen, driven by weak exports to China.
Merchandise imports plunged 11.9% to 9.6 trillion yen, extending the decline to the eighth month in a row on lower energy prices.
Exports to the U.S. rose 5.3% to 1.8 trillion yen, imports declined 3.5% to 1.0 trillion yen, resulting in a trade surplus increase of 19% to 804.3 billion yen.
Exports to mainland China declined 2.2% to 1.6 trillion yen, imports fell 3.2% to 2.2 billion yen, driving the trade deficit down by 5.5% to 654.0 billion yen.
Exports to the European Union were flat at 854 billion yen, imports from the region decreased 6.6% to 1.0 trillion yen, driving the trade deficit with the region by 32.8% to 145.1 billion.
Exports to India increased 3.8% from a year ago to 178 billion yen, and imports fell 4.5% to 62.5 billion yen, driving the trade surplus higher by 8.9% to 115.5 billion yen.
In November, Japan recorded its largest trade deficit with mainland China of 654 billion yen and its largest trade surplus with the U.S. of 804 billion yen.
- Arun Goswami
- 20 Dec, 2023
- Mumbai
Stocks in Mumbai extended their gains amid optimism about economic growth and weakening inflation.
The Sensex index decreased 168.07 points to 71,144.04, and the Nifty index fell 57.75 points to 21,360.25.
On the Mumbai stock exchange, 173 stocks traded at their 52-week highs and 8 stocks traded at their 52-week lows.
Varun Beverages soared 10.2% to ₹1,290.55 after the company said it plans to acquire South Africa-based The Beverage Company Limited for ₹1,320 crore.
The company also plans to invest up to ₹450 crore in building a manufacturing plant in Patratru, Jharkhand.
Bharat Petroleum Corporation, or BPCL, increased 0.9% to ₹453.75 after the company's board approved setting up a polypropylene plant at Kochi refinery for a cost of ₹5,044 crore.
Embassy Office Parks REIT decreased 0.1% to ₹335.21 after a report that Blackstone plans to sell its entire 23.6% stake in the company for $833 million.
Astral Ltd. increased 1.9% to ₹1,945.40 on a CNBC TV-18 report that the company's promoter is looking to sell between 2% and 3% of the 55.85% stake in the company.
Deepak Nitrite Ltd. increased 3.7% to ₹2,373.0 and Petronet LNG rose 0.2% to ₹216.50 after the two companies signed a 15-year contract for hydrogen and polypropylene delivery.
Deepak Nitrite agreed to deliver 250 kilotons a year of polypropylene and 11 kilotons a year of hydrogen to Petronet LNG.
Rail Vikas Nigam gained 0.8% to ₹185.35 after the company's joint venture, with a stake of 49%, won a project worth ₹124 crore for Varkala Sivagiri Railway Station in Kerala.
BSE Ltd. advanced 1.9% to ₹2,445.0, and the financial exchange operator imposed an additional 15% margin requirement for equity derivatives, with the top 10 clients holding a 20% stake.
DOMS Industries soared more than 75% on its first day of trading after the stationary and arts supplies maker priced its initial public offering at ₹790 per share.
The company's initial public offering of ₹1,200 crore was subscribed to 99 times, indicating strong investor demand.
- Arjun Pandit
- 20 Dec, 2023
- Mumbai
Stocks in Mumbai advanced on economic growth optimism, and the rupee traded down.
Benchmark indexes tracking large-cap, small-cap, and mid-cap stocks gained between 0.4% and 0.6%.
Market sentiment was dominated by optimism about the interest rate, the economic growth outlook, and sustained government investment in infrastructure.
Moreover, in overnight trading in New York, market indexes extended a 7-week rally on rate optimism and resilient consumer spending.
Japan's trade deficit plunged 62% to 0.77 trillion yen in November from 2.06 trillion yen a year ago, the Ministry of Finance reported in its preliminary report on Wednesday.
Merchandise exports fell 0.2% to 8.8 trillion yen, driven by weak exports to China.
Merchandise imports plunged 11.9% to 9.6 trillion yen, extending the decline to the eighth month in a row on lower energy prices.
Exports to India increased 3.8% from a year ago to 178 billion yen, and imports fell 4.5% to 62.5 billion yen, driving the trade surplus higher by 8.9% to 115.5 billion yen.
In November, Japan recorded its largest trade deficit with mainland China of 654 billion yen and its largest trade surplus with the U.S. of 804 billion yen.
India Indexes and Yields
The Sensex index decreased 168.07 points to 71,144.04, and the Nifty index fell 57.75 points to 21,360.25.
On the Mumbai stock exchange, 173 stocks traded at their 52-week highs and 8 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds held firm at 7.17%, and the Indian rupee hovered near ₹83.15 against the U.S. dollar.
The gold price increased by 0.2% to ₹62,251 per ten grams, and silver edged up by 0.3% to ₹75,017 per kilo.
Crude oil increased by 0.05% to ₹6,170 per barrel, and natural gas fell by 2.1% to ₹203.10 per thermal unit.
India Stock Movers
Varun Beverages soared 10.2% to ₹1,290.55 after the company said it plans to acquire South Africa-based The Beverage Company Limited for ₹1,320 crore.
The company also plans to invest up to ₹450 crore in building a manufacturing plant in Patratru, Jharkhand.
Bharat Petroleum Corporation, or BPCL, increased 0.9% to ₹453.75 after the company's board approved setting up a polypropylene plant at Kochi refinery for a cost of ₹5,044 crore.
Embassy Office Parks REIT decreased 0.1% to ₹335.21 after a report that Blackstone plans to sell its entire 23.6% stake in the company for $833 million.
- Barry Adams
- 19 Dec, 2023
- New York City
Benchmark indexes advanced in Tuesday's trading, and investors debated the future rate path and economic outlook.
Market indexes gained in the final full week of trading as indexes registered strong advances in the month, quarter, and year.
The S&P 500 index has advanced 3.8% in December and 23.5% in 2023, and the Nasdaq Composite has gained 4.8% in the month and 42.4% in the year so far.
The S&P 500 index is about 1% away from its record high.
Investors have bid up stocks after inflation steadily edged lower in the year, largely reflecting lower energy prices, and resilient consumer spending kept the economic growth above 2%, contrary to the calls for recession by many economists at the beginning of the year.
Market expectations are running high that the Federal Reserve will begin to cut interest rates in 2024, but policymakers have stepped up rhetoric to temper market expectations.
Despite the cooling of inflation, core inflation is still significantly ahead of the Federal Reserve's target rate of 2%, and most of the progress on the inflation front is because of the weakening of crude oil prices compared to the high base in 2022 because of Russia's invasion of Ukraine.
Housing Starts In November Unexpectedly Soared
Seasonally adjusted housing starts in November rose 14.8% from the previous month to an annual rate of 1.56 million homes, the U.S. Census Bureau reported Tuesday.
October housing starts were revised to 1.359 million.
November housing starts rose 9.3% from the annual rate of 1,427,000 in the month a year ago.
Single-family housing starts in November were at a rate of 1,143,000, an increase of 18% above the revised October annual pace of 0.969 million.
The November rate for units in buildings with five units or more was 404,000.
Building permits decreased 2.5% from the previous month but rose 4.1% from a year ago in November to 1.46 million, and housing completions rose 5.0% from October but fell 6.2% from a year ago in the month to 1.447 million.
U.S. Indexes and Yields
The S&P 500 index gained 0.4% to 4,758.54, and the Nasdaq Composite increased 0.4% to 14,961.41.
The yield on 2-year Treasury notes increased to 4.43%, 10-year Treasury notes inched lower to 3.90%, and 30-year Treasury bonds eased to 4.02%.
Crude oil increased $1.01 to $73.83 a barrel, and natural gas prices decreased 1 cent to $2.50 a thermal unit.
Gold increased $10.67 to $2,038.44 an ounce and extended gains for the fourth day in a row after the dollar declined 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 102.18 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
Alphabet Inc. rose 0.4% to $136.30, and the company's Google agreed to settle charges brought by the U.S. states and consumers in a San Francisco federal court.
The settlement was disclosed on Monday and still needs approval from the judge. Google did not admit charges of unnecessary fees for app transactions and unlawful restrictions on apps on Android devices.
Google will pay $70 million in a fund for all 50 states, the District of Columbia, Virgin Island, and Puerto Rico, and $630 million in a fund for consumers.
Eligible customers of the Google Pay store will receive $2 and may receive additional payments depending on their spending between August 16, 2016 and September 30, 2023.
Google is facing other legal challenges regarding its digital advertising practices, search process, and results.
Nikola Corp. increased 3% to $0.84 after a court sentenced the company's founder, Trevor Milton, to four years in prison for making false and misleading statements to drive up investor interest.
Milton was also fined $1 million and sentenced to three years of supervised release.
Stocks fell 10% after the news in Monday's trading but rebounded in Tuesday's trading.
In October 2022, Milton was found guilty of two counts of wire fraud and one count of securities fraud and faced 60 years of imprisonment.
In 2021, the company agreed to settle civil charges brought by the U.S. Securities and Exchange Commission for $125 million.
European Markets Advanced, France Growth to Accelerate
European market indexes erased morning gains, and investors debated the future rate path and economic growth outlook for the next year.
Investors also digested the release of the consumer price index for the eurozone and the European Central Bank's directive for 20 banks to increase capital to cover potential losses from bad loans.
The yields on bond issues in the Euro Area held stable near a 9-month low, and the euro held its ground against the U.S. dollar.
Eurozone Inflation Confirmed at 2.4%
Consumer price inflation was confirmed to decrease by 0.5% from the previous month to 2.4% in November, Eurostat reported on Tuesday.
The inflation dropped to the lowest since July 2021 after service inflation eased to 4.0% from 4.6%, food, alcohol, and tobacco inflation slowed to 6.9% from 7.4%, and non-energy industrial goods inflation dropped to 2.9% from 3.5%.
Energy prices dropped 11.5% in November after falling 11.2% in the previous month.
Moreover, the statistical agency confirmed core inflation, which excludes food and energy prices, held at 3.6%, the lowest since April 2022.
Bank of France Estimated Economic Growth to Accelerate Over 3 Years
The Bank of France lowered its estimate of GDP growth slightly to 0.8% from 0.9% in 2023 and estimated a gradual acceleration in growth over the next three years.
GDP growth is expected to pick up to 0.9% next year and accelerate further to 1.3% in 2025 and 1.6% in 2026.
The latest announcement from the central bank of France suggested that the second-largest economy in the eurozone is likely to avoid a recession.
"This acceleration in 2026 assumes that the effects of recent shocks to the French economy—external tax shocks, tightening of monetary and financial conditions—will have abated by that time," the bank noted in the statement released Tuesday.
Overall inflation is expected to be 5.7% in 2023 but fall sharply to 2.5% in 2024, and both estimates were lowered by 0.1 percentage points from the September estimate.
Core inflation is expected to hold at 4% this year before easing to 2.5% next year and dropping to 2.2% in 2025.
The bank also revised higher jobless rates by 0.1 percentage points in 2023 and 2024.
The jobless rate is now estimated to increase to 7.6% next year from 7.3% this year.
Europe Indexes and Yields
The DAX index increased 0.6% to 16,744.41, the CAC-40 index inched up 0.07% to 7,574.67, and the FTSE 100 index increased 0.3% to 7,638.03.
The yield on 10-year German bonds increased to 2.02%; French bonds held at 2.54%; the UK gilts inched higher to 3.66%; and Italian bonds inched lower to 3.70%.
The euro traded higher to $1.094, the British pound inched higher to $1.269, and the U.S. dollar eased to 86.62 Swiss cents.
Brent crude increased $0.97 to $78.93 a barrel, and the Dutch TTF natural gas decreased by €2.95 to €32.57 per MWh.
Europe Stock Movers
Sodexo SA decreased 0.4% to €98.38, and the catering and food service group confirmed its plan to seek shareholder approval for the spinoff of Pluxee at the meeting on January 30, 2024.
Covestro AG increased 1.9% to €54.0 on reports that the Abu Dhabi National Oil Company is looking to increase its takeover offer for the German chemical company.
Bayer AG added 0.4% to €32.24 after a U.S. jury ordered the company's unit, Monsanto, to pay $857 million for toxic leaks at a school.
The company said it plans to appeal the decision.
Banks were in focus after the European Central Bank raised the capital requirement for non-performing loans at 20 banks without naming any banks.
Deutsche Bank decreased 0.4% to €11.94, and Commerzbank fell 0.4% to €10.43.
Societe Generale declined 0.9% to €23.99, UniCredit SpA increased 0.5% to €24.24, BNP Paribas fell 0.2% to €62.27, and Banco Santander eased 0.4% to €3.77.