S&P 500 closes near flat line as Moody's cuts US rating

S&P 500 closes near flat line as Moody’s cuts US rating

The S&P 500 ended Monday’s session near the flat line as traders prepared for the release of key inflation data.

Investors were looking ahead to October’s reading of the consumer price index, due Tuesday, as the next catalyst for markets. Headline inflation is expected to have grown 3.3 per cent on an annualised basis, according to economists polled by Dow Jones. The metric is also forecasted to have advanced 0.1 per cent from the prior month.

Moody’s on Friday underscored the U.S.′ “very large” fiscal deficits and partisan gridlock in Washington as contributing factors for the cut. The ratings agency reaffirmed America’s credit rating at AAA, the highest level. This comes three months after Fitch lowered the U.S. long-term foreign currency issuer default rating to AA+ from AAA, also citing expected fiscal deterioration, an increasing debt burden and political standoffs on fiscal and debt issues.

The broad-market index ended the day down 0.08 per cent to close at 4,411.55. The Nasdaq Composite closed 0.22 per cent lower to end at 13,767.74. The Dow Jones Industrial Average advanced 0.16 per cent, closing at 34,337.87.

Leading the S&P 500 gains were DaVita, Insulet and Henry Schein, each up more than 5 per cent. Shares of Boeing added more than 4 per cent after Emirates announced a $52 billion order for a 95 aircraft, giving the Dow a lift.

Turning to US sectors, Energy was the best performing sector, whilst Utilities recorded the most losses.

Turning to commodities, oil prices rose on Monday as OPEC's dismissal of demand slowdown concerns led to gains in Brent and West Texas Intermediate crude contracts for January and December, respectively.

OPEC refuted concerns about weakening oil demand, citing increased Chinese crude imports in October, robust U.S. economic growth, and a 5.4 per cent projected growth in the Chinese economy for this year, attributing the recent oil price selloff to speculative bets on declining crude prices.

ExxonMobil aims to become a prominent player in the lithium market by leveraging its drilling and processing expertise, with plans to commence lithium production in 2027 through the extraction of lithium from underground brines in Arkansas, where it holds rights to 120,000 acres of land in the Smackover formation.

The clean-energy sector is experiencing a severe downturn, resulting in significant value losses and posing a threat to America's environmental objectives, with major automakers such as General Motors and Ford postponing electric vehicle launches and offshore wind projects facing cancellations or delays.

The solar panel market is facing a decline in homeowner purchases, even in environmentally conscious states like California, and reliable dividend-yielding green-power producers are no longer perceived as secure investments due to challenges posed by rising interest rates, supply chain issues, insufficient electric transmission infrastructure, and Chinese competition.

Futures

The SPI futures are pointing to a 1 per cent gain.

Currency

One Australian dollar at 8:25 AM was buying 63.78 US cents.

Commodities

Gold lost 1.63 per cent. Silver fell 2.72 per cent. Copper lost 1.47 per cent. Oil gained 1.89 per cent.

Figures around the globe

European markets closed higher. London’s FTSE added 0.89 per cent, Frankfurt gained 0.73 per cent, and Paris closed 0.60 per cent higher.

Turning to Asian markets, Tokyo’s Nikkei added 0.05 per cent, Hong Kong’s Hang Seng gained 1.30 per cent while China’s Shanghai Composite closed 0.25 per cent higher.

The Australian share market closed 0.40 per cent lower at 6949.

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

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