S&P500 closes higher as US retail sales increase in November

The Dow Jones Industrial Average edged higher on Thursday a day after closing above 37,000 for the first time ever as the 10-year Treasury tumbled below 4 per cent and a surprise gain in retail sales gave investors further confidence 2024 would bring a soft economic landing.

The 30-stock Dow closed at a record high, ending the day up 158 points, or 0.43 per cent at 37,248.35. On Wednesday, it marked its first-ever close above 37,000. The S&P 500 added 0.26 per cent to end the day at 4,719.55, while the Nasdaq Composite gained 0.19 per cent to 14,761.56.

Wall Street received fresh economic data on Thursday that helped fuel hopes for a soft landing. Retail sales increased 0.3 per cent in November, the Commerce Department said on Thursday, in the latest sign that consumer spending remains strong as the holiday shopping season continues. Economists polled by Dow Jones forecast a decrease of 0.1 per cent.

Solar stocks ticked higher as yields fell. The Invesco Solar ETF (TAN) climbed more than 8.1 per cent, with constituents SunRun and Enphase gaining 20 per cent and 12 per cent, respectively. Shares of Moderna climbed 9.3 per cent after trial data showed its experimental cancer vaccine reduced the risk of death or reoccurrence when used alongside Merck’s Keytruda.

The S&P could soon join the Dow in record territory, as the index is less than 2 per cent away from reaching its all-time close set in January of 2022. The Nasdaq is about 9 per cent away from its closing record and roughly 10 per cent further to go to reach its intraday record, respectively.

US sectors were mostly mixed overnight. Energy and Real Estate were the best performers. Consumer Staples was the worst performer.

Moving on, the Bank of England and the European Central Bank decided to keep their interest rates unchanged, leading to stable share prices in Britain and Europe.

Both central banks resisted market expectations of rate cuts, with BoE Governor Andrew Bailey emphasising the need for a prolonged period of restrictive interest rate policy, while European Central Bank officials did not discuss the possibility of rate cuts, leading to increased focus on US market dynamics and speculation about significant rate cuts there next year.

Futures

The SPI futures are pointing to a 0.7 per cent rise.

Currency

One Australian dollar at 8:30 AM was buying 66.96 US cents.

Commodities

Gold has gained 2.68 per cent. Silver has jumped 6.69 per cent. Copper has added 2.35 per cent. Oil has gained 3.20 per cent.

Figures around the globe

European markets closed mixed. London’s FTSE gained 1.33 per cent, Frankfurt lost 0.08 per cent, and Paris closed 0.59 per cent higher.

Turning to Asian markets, Tokyo’s Nikkei fell 0.73 per cent, Hong Kong’s Hang Seng gained 1.07 per cent while China’s Shanghai Composite closed 0.33 per cent lower.

The Australian share market closed 1.65 per cent higher at 7,377.86.

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

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