Latest News

Global stocks edge up, dollar holds near 5-month low


Global stocks edge up, dollar holds near 5-month low By Reuters

Breaking News



Published Dec 26, 2023 02:29
Updated Dec 26, 2023 18:30

© Reuters. Passersby walk past an electric monitor displaying the Japanese yen exchange rate against the U.S. dollar outside a brokerage in Tokyo, Japan October 4, 2023. REUTERS/Issei Kato/file photo

By Koh Gui Qing and Ankur Banerjee

NEW YORK/SINGAPORE (Reuters) -Global stocks crept higher on Tuesday and the dollar lingered near a five-month low as investors held fast to bets that cooling U.S. inflation will lead the Federal Reserve to cut interest rates next year.

Oil prices jumped over 3% to the highest in almost a month, supported by Middle East strife and investor hopes that possible rate cuts will boost global economic growth and fuel demand.

Trading was thin on the day after Christmas with several markets, including those in Australia, Hong Kong, Britain and Germany, closed for Boxing Day.

MSCI’s gauge of stocks across the globe gained 0.31%. On Wall Street, the Dow Jones Industrial Average rose 0.38%, the S&P 500 gained 0.38%, and the Nasdaq Composite added 0.44%.

In a sign the U.S. economy was holding up, a report by Mastercard (NYSE:MA) on Tuesday showed U.S. retail sales rose 3.1% between Nov. 1 and Dec. 24, lower than last year’s 7.6% gain.

“Consumers are still spending, but they’re still price conscious and want to stretch their budgets,” said Arun Sundaram, an analyst at CRFA Research.

The yield on 10-year Treasury notes was unchanged at 3.908%, while the two-year U.S. Treasury yield was up 3.7 basis points at 4.377%. [US/]

U.S. crude jumped 3.3% to $75.97 per barrel and Brent was at $81.49, up 3.06% on the day. [O/R]

{{2126|The dodollar index was flat at 101.55, within sight of a five-month low of 101.42 struck on Friday. A soft dollar helped to lift the euro 0.25% to $1.1034. [USD/]

Investors were still digesting data released on Friday that showed U.S. prices fell in November for the first time in more than 3-1/2 years, underscoring the economy’s durability.

Inflation, as measured by the personal consumption expenditures (PCE) price index, fell 0.1% last month.

“In a way, markets could not have asked for better news from the continued easing of the core PCE deflator in November,” said Nicholas Chia, Asia macro strategist at Standard Chartered (LON:STAN).

“Thin liquidity conditions are likely to exacerbate the so-called ‘Santa Claus rally’ in equities ahead of the turn of the year,” Chia added.

The end of the year tends to be a strong period for stocks, a phenomenon dubbed the “Santa Claus Rally.”

Stock investors have cheered recent signs from the Fed on the outlook for rates. At the conclusion of its policy meeting on Dec. 13 the Fed signalled it had reached the end of its tightening cycle and opened the door to interest rate cuts in the coming year.

Markets are now pricing in a 75% chance of a 25 basis points rate cut from the Fed in March, according to the CME FedWatch tool, compared with a 21% chance at the end of November. Markets are also pricing in more than 150 basis points of rate cuts next year.

“The Federal Reserve has aggressively changed its rhetoric to engineer a significant easing of financial conditions,” Citi analysts said in a note.

“A combination of slower core inflation and rising recession concerns led Fed officials to shift rhetoric away from a commitment to fight inflation with higher-for-longer rates and toward reassuring markets that they will not ‘hang on’ to higher rates for too long.”

In Asia, China stocks fell 0.47%, weighed down by semiconductor shares, while gaming stocks stabilised after a slew of companies announced share buyback plans. Hong Kong’s Hang Seng Index remained closed.

Japan’s Nikkei gained 0.16% and remains the best performing major Asian stock market with a 27% rise in 2023.

The yen was flat versus the greenback at 142.47 per dollar, retracing some recent gains made on the prospect of the Bank of Japan soon ending its ultra-easy policy. [FRX/]

The Asian currency is up 4% this month, on course for a second straight month of gains against the dollar. But for the year, the yen remains down 7.8% against the greenback.

Spot gold added 0.2% to $2,056.69 an ounce, [GOL/] while Bitcoin fell 3.9% to $41,914.00.

Global stocks edge up, dollar holds near 5-month low

Our Apps

Terms And Conditions
Privacy Policy
Risk Warning
Do not sell my personal information

© 2007-2023 Fusion Media Limited. All Rights Reserved.

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

Dow Jones Up 159 Points Amid Santa Claus Rally; Cathie Wood Piles Into This Stock Despite 21% Plunge

Previous article

Dow lands its second-highest close in history as stocks build on eight-week winning streak

Next article

You may also like


Leave a reply

Your email address will not be published. Required fields are marked *

More in Latest News