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Wall Street Closes at Record Highs as Energy, Consumer Shine

By Yasin Ebrahim

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Wall Street Closes at Record Highs as Energy, Consumer Shine
© Reuters.

By Yasin Ebrahim

Investing.com – The major averages closed in record territory Monday, led by energy and consumer discretionary stocks ahead of data-laden week including a monetary policy update from the Federal Reserve. 

The rose 0.1% to closer at a record of 4,613.67, and the ended up 2.26%, or 94 points to close at an all-time high of 35,913. The Nasdaq climbed 0.63%, closing at a record of 15,595.92. The , was up 2.7% to close at record of 2,358.12, notching its best day since August.   

Energy was up about 1% as oil prices continued to rise amid expectations that the major oil producers are unlikely to turn increase production to alleviate the energy supply crunch.

Bank of America forecast to hit $120 a barrel by the end of June 2022 as the rebound in gasoline demand amid refining-capacity constraints could continue to support oil prices.

Devon Energy (NYSE:), Marathon Oil (NYSE:), APA Corporation (NASDAQ:) were among biggest gainers in the sector.

Consumer discretionary continued to add to gains from last week, led by Tesla (NASDAQ:) as the electric vehicle maker climbed to fresh record highs.

Casino stocks including Las Vegas Sands (NYSE:), Wynn Resorts (NASDAQ:), Melco Resorts & Entertainment (NASDAQ:) also lifted the sector, shrugging off data showing casino revenue in the Asian gambling mecca of Macau fell by 40% in the 12 months through October.

Tech, however, was a drag on the broader market as big tech, with expectation of Meta Platforms (NASDAQ:), started the week on the backfoot amid a rise in Treasury yields.

Apple (NASDAQ:), Google-parent Alphabet (NASDAQ:), Microsoft (NASDAQ:) and Amazon (NASDAQ:) closed in the red.

The topped 1.6%, but pared some gains as U.S. manufacturing data continued to point supply-chain woes that aren’t expected to ease anytime soon.

“The manufacturing sector is growing, but it faces severe headwinds, which are unlikely to fade materially before next spring,” Pantheon Macroeconomics said in a note.

In other news, Coca-Cola Co (NYSE:) acquired Bodyarmor for $5.6 billion as the beverage giant’s history seeks to provide ramp-up competition against Gatorade, the leader in the sports drink market.

Harley-Davidson (NYSE:), meanwhile, jumped 9% after the U.S. and the European Union ended their dispute on steel and aluminum tariffs, mitigating the risk of the motorcycle maker incurring a 56% levy on its imports into the EU.

On the political front, Sen. Joe Manchin, a moderate Democrat, said Congress needs more time evaluate the $1.75 trillion infrastructure package on the economy, dashing democrats’ hopes for quick resolution

The grind higher on Wall Street comes just a day ahead of the Fed’s two-day meeting starting Tuesday, expected to culminate in an unchanged decision on rates and an announcement that the pace of bond purchases would be reduced by about $15 billion a month. 

Stock Markets

U.S. stock market indices are down 1-2%

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U.S. stock market indices

U.S. stock market indices declined yesterday on growing fears of a recession in the U.S. economy, with the S&P 500 index falling for the fourth consecutive time.

U.S. stock indices list – what’s happening right now?

Inflation will drain Americans’ financial reserves and could lead to a recession sometime in the middle of next year, according to the head of JPMorgan Chase & Co (NYSE:JPM). Jamie Dimon. His Goldman Sachs Group (NYSE:GS) colleague David Solomon also expects a recession in the coming months, and he believes markets are in for a turbulent period. The situation also affected T-Bond Futures.

Meanwhile, the U.S. Commerce Department said Tuesday that the country’s trade deficit widened 5.5 percent to $78.2 billion in October, the highest in four months but below analysts’ expectations of $80 billion.

Previously published positive data on business activity in the service sector and the number of new jobs in the U.S. economy have led investors to doubt that the Federal Reserve is willing to slow the pace of key interest rate increases, writes Trading Economics.

“The market got off to a nervous start this week as strong U.S. statistics hit investors’ hopes that the Fed would soften its stance in the coming months,” wrote SPI Asset Management managing partner Stephen Innes. “Ultimately, it’s more important exactly where the Fed stops, not how quickly they get to it. A stronger-than-expected labor market and positive business sentiment make it more likely that the rate will exceed 5%,” he added.

Market participants also watched for corporate news. The Dow Jones Industrial Average fell 350.76 points (1.03%) to 33596.34.

Earlier, we reported that European stock indicators on December 7 showed a contradictory mood.

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Stock Markets

Current European stock market shows a contradictory mood

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european stock indexes today

European stock indexes today do not show unified dynamics during trades. Composite index of the largest companies in the region, Stoxx Europe 600, decreased by 0.29% to 437.66 points.

Current European stock market – current situation

Germany’s DAX stock index was down 0.25%. France’s CAC 40 was down 0.09% and Spain’s IBEX 35 was down 0.06%. The British FTSE 100 rose 0.16%, the Italian FTSE MIB – 0.13%.

Investors are increasingly concerned about the negative impact of tightening financial conditions on economic growth in the region and the profits of companies, writes Trading Economics. The situation was also reflected in the Euro Fx Futures.

Market participants are waiting for meetings of several major central banks next week and are assessing statements by representatives of the European Central Bank (ECB).

Inflation in the eurozone is close to a peak, ECB Chief Economist Philip Lane said the day before.

“It is too early to conclude that inflation has peaked, but I can say with confidence that we are close to peaking,” Lane told Italian newspaper Milano Finanza.

The ECB raised all three key interest rates by 75 bps in October. The benchmark interest rate on loans was raised to 2%; the rate on deposits – to 1.5%; the rate on margin loans – to 2.25%. Since July this year, the ECB has raised key rates by 200 bp.

Experts expect the lending rate to rise to at least 2% from 1.5% in December.

Meanwhile, data from Germany’s Federal Statistical Office (Destatis) released Wednesday showed that industrial production in Germany fell by 0.1% in October compared to the previous month. Analysts polled by Trading Economics had on average expected a larger decline of 0.6%.

Earlier we reported that data on a decline in Chinese exports dropped Asia’s stock market.

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Asian stock market news: Data on decline in Chinese exports caused Asia’s stock market to plummet

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asian stock market news

Asian stock market news: Asian stock indices fell in today’s trading after data showed a decline in Chinese exports.

China’s exports fell 8.7 percent year on year in November to $296.1 billion, official data showed. The index fell for the second month in a row (in October it dropped by 0.3%), and the rate of its decline was the highest since February 2020. Experts attribute this reduction mainly to a drop in demand in the world amid a slowdown in the global economy. Even EURODOLLAR futures were affected by the situation.

Asian stock market today – what’s happening right now?

Imports fell 10.6% year-on-year last month to $226.2 billion, after declining by 0.7% a month earlier. China’s foreign trade surplus narrowed to its lowest since April, $69.84 billion in November, down from $85.15 billion a month earlier and $71.7 billion a year earlier.

Meanwhile, investors welcomed the news of further easing of coronavirus restrictions in China. Now, entire neighborhoods and blocks will not be closed for lockdowns, as they used to be, but only residential floors and buildings. Also, people who test positive for COVID-19 will be able to self-isolate at home rather than in overcrowded hospitals. Also, schools that have not had outbreaks will have to return to the face-to-face format.

Japan’s Nikkei 225 stock index was down 0.7%. Australia’s S&P/ASX 200 index was down 0.9%. Australia’s GDP rose 0.6% in Q3 from the previous quarter, according to the country’s Bureau of Statistics. Analysts on average had expected the Australian economy to grow by 0.7% in July-September, Trading Economics wrote.

The country’s GDP grew by 0.9% in the 2nd quarter. Thus, the Australian economy has shown an upturn for the fourth consecutive quarter. but the rate of increase was the weakest in that period amid weak growth in consumer spending due to high inflation and higher interest rates. On an annualized basis, GDP rose 5.9% in Q3 after climbing 3.4% in Q2 and compared to the 6.2% expected by analysts.

Earlier, we reported that European stock markets mostly closed lower on December 5.

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